Disclosure Pilot Scheme: a further step in the right direction?
In January 2019, a pilot scheme trialling an entirely new set of disclosure rules commenced for an initial period of two years in the Business & Property Courts of England and Wales. As a “living pilot”, the scheme has been kept under continuous review and, on 22 September 2020, the Disclosure Working Group announced proposed updates to the scheme.
In January 2019, a pilot scheme trialling an entirely new set of disclosure rules commenced for an initial period of two years in the Business & Property Courts of England and Wales. As a “living pilot”, the scheme has been kept under continuous review and on 22 September 2020, the Disclosure Working Group announced proposed updates to the scheme.
The proposed updates include a one year extension (such that the scheme will expire at the end of 2021 unless renewed or made permanent, which is the eventual expectation) and important amendments to the scheme rules as well as the supporting documents.
The introduction of the Disclosure Pilot Scheme (the Pilot) was met with broad enthusiasm as its objective was to make the disclosure process more efficient and less costly whilst enabling parties to reach a level-playing field at an earlier stage in proceedings thereby facilitating early resolution. Shortly before the Pilot came into force, we set out in a Perspectives the potential benefits of, and anticipated problems with, the scheme. Some of those problems have transpired (such as the question of when known adverse documents must be disclosed, which the proposed amendments seek to tackle) and the benefits have arguably been limited.
This is reflected in the recently published Third Interim Report prepared by Professor Rachael Mulheron, Professor of Tort Law and Civil Justice at Queen Mary University of London who has been tasked with reviewing and monitoring the operation of the Pilot. The report analyses responses to a questionnaire circulated in October 2019 from practitioners with experience of the Pilot. It makes for interesting reading and highlights the key issues which practitioners have experience with the Pilot. For example:
- 44% of respondents encountered issues dealing with the requirement to provide known adverse documents, including: (i) the deadline by which to disclose known adverse documents; (ii) which documents are captured by the definition of an “adverse document”; and (iii) the circumstances in which a document should be considered to be “known” to a party.
- 85% of respondents considered that the Pilot has increased rather than decreased costs, the latter being a key intention behind the introduction of the scheme.
- 78% of respondents did not identify any cultural change in the disclosure process following the introduction of the Pilot. For example, it would appear parties have continued to seek wide search-based models of Extended Disclosure (akin to ‘standard disclosure’ under the old rules).
Professor Mulheron attributes the overall negative tenor of the responses to some extent to the fact that it is still “early in the life of the Pilot”. Whilst that is correct, whether or not it is relevant is a different question; the comment may have been designed to soften the blow to the Disclosure Working Group in circumstances where the responses to the questionnaire overwhelmingly suggest the scheme has failed to achieve its key aims.
What now? Recommended amendments to the Pilot
In response to the report, a sub-group of the Disclosure Working Group has proposed amendments to the scheme rules (contained in Practice Direction 51U) and produced a simplified version of the Disclosure Review Document, a key document that supports the operation of the Pilot.
The key proposed changes are as follows:
Known Adverse Documents
A clarification that the latest time for disclosing known adverse documents is as specified in paragraphs 9.1 to 9.3 PD51U; depending on the circumstances, this can be up to 60 days after the first Case Management Conference or at the time ordered for Extended Disclosure. In addition, the rules make clear that there is no requirement to disclose known adverse documents with Initial Disclosure. As currently drafted, the rules are unclear as to whether disclosure of known adverse documents is required before the longstop in paragraphs 9.1 to 9.3. The proposed amendments to PD 51U are therefore a welcome clarification.
Preservation of documents
The duty to take reasonable steps to preserve relevant documents is contained in the Pilot rules and applies as soon as a party knows that it is, or may become, a party to proceedings that have been or may be commenced. As noted in the Third Interim Report, one of the key concerns raised by practitioners using the Pilot is the wide ambit of the new obligation contained in the Pilot rules to notify former employees of the requirement to preserve documents, which has the potential to be very burdensome in practice.
The proposed amendments to the rules clarify that document preservation notices only need to be sent to former employees in circumstances where there are reasonable grounds to consider that they have potentially disclosable documents in their possession that are not already in the possession of the party. This should serve to alleviate the concern that the obligation is too onerous.
Disclosure Guidance Hearings
As noted in our previous Perspectives, Disclosure Guidance Hearings are a form of ad hoc hearing introduced in the Pilot. They are intended to enable parties to seek guidance from the court where there are issues between them concerning the scope of Extended Disclosure. They can be requested before or after a Case Management Conference and should last no longer than 30 minutes.
Despite the judiciary encouraging the use of Disclosure Guidance Hearings (see, for example, Vannin Capital PCC v RBOS shareholders Action Group and Others  EWHC 1617), the Third Interim Report notes that they have not been used very often and, where they have been used, they have often been listed for more than 30 minutes. Feedback from practitioners has suggested that the scope and timeframe for the hearings is too limited such that Case Management Conferences are often the preferred mechanism to resolve disclosure issues. The proposed revisions to the Pilot rules significantly expand the scope of the hearings to cover "any point concerning the operation of the Pilot". In addition, where required, the Court is permitted to direct a longer maximum hearing length.
Disclosure Review Document
The Disclosure Review Document is a document introduced by the Pilot in which parties identify and seek to agree the scope of any Extended Disclosure order. It replaces the Disclosure Report and Electronic Documents Questionnaire under the previous regime.
There has been limited judicial guidance on the use of the Disclosure Review Document and feedback outlined in the Third Interim Report indicates that it has not been well-received by practitioners. Several changes have therefore been proposed to the document, including:
- Further guidance on when and how the document should be completed;
- Confirmation that the document may be modified and/or shortened by the parties for more or less complex cases;
- Clarification that parties are not required to answer all questions in the document, but only those that are relevant/applicable to the particular case;
- Guidance on when and how best to use Model C Extended Disclosure requests;
- Refinement and consolidation of the questions contained in the document to eliminate duplication and to make the document shorter and more user-friendly;
- Clarification that information on data sources only needs to be provided in relation to those data sources that the parties propose to search; and
- Updated questions regarding the use of technology including technology assisted review tools.
The changes proposed by the Disclosure Working Group go some way to resolving the practical difficulties and inevitable teething issues experienced with the Pilot to date. However, beyond the proposed amendments, the more important requirement is to achieve a shift in mindset amongst practitioners. In particular, one of the key aims behind the introduction of the Pilot was to move away from extensive disclosure in all cases to disclosure that is bespoke to the case in question. Such a shift in mindset is extremely difficult to legislate for, and the proposed changes have not sought to tackle the instinctive reaction of many practitioners to seek one of the search-based models of Extended Disclosure under the Pilot rules. It is clear that to bring about real change, the judiciary will need to grasp the issue and challenge parties’ adoption of wide search-based models of Extended Disclosure where appropriate to do so. Whether that will happen remains to be seen.