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Disclosure Pilot hits turbulence

15/11/2019

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United Kingdom

This article discusses some of the key provisions in the Disclosure Pilot Scheme (the "Pilot") introduced at the start of 2019 in the Business and Property Courts (which includes the Commercial Court) and provides our honest views on how the scheme is working in practice nearly a year on.

What is disclosure?

For those unfamiliar, disclosure is the term given to the stage of the litigation procedure whereby each party is required to exchange certain documents which are relevant to the issues in their dispute. The purpose is to ensure that the parties lay all their cards on the table. In cases involving large numbers of documents disclosure is often a lengthy and extremely costly exercise which is particularly painful for clients. The aim behind the Pilot is to reduce the burdensome and costly nature of disclosure.

What is the Disclosure Pilot Scheme?

The Pilot was introduced as a two-year test-scheme aimed at initiating a "culture change" to the attitude of parties towards disclosure, and was intended to foster a greater degree of co-operation, proportionality, and reasonableness.

Some of the key changes that the Pilot introduces include:

  • The provision of "Initial Disclosure" which requires key documents to be disclosed with statements of case (i.e. at the outset of proceedings).
  • The 'co-operative' completion of the "Disclosure Review Document" (DRD), which is circulated between the parties ahead of the Case Management Conference (a hearing in which the court seeks to narrow the issues in dispute and provides directions on how the case will be conducted in the lead up to trial).
  • The introduction of five "Extended Disclosure" models (Models A to E), all of which entail different disclosure obligations. We do not detail the Models here, since this would almost certainly result in you not finishing this article. However, the aim of the newly introduced Models is to ensure that the old regime of 'Standard disclosure' (now encompassed in Model D) which required a party to disclose documents (i) on which it relies; (ii) that adversely affect its or another party's case; or (iii) support another party's case, will no longer be the default position. The Pilot encourages the parties to consider less onerous Models for disclosure, such as only disclosing adverse documents.

Comment

The Dispute Resolution team at Fieldfisher has substantial experience of the Pilot having acted on a number of cases in which it applies to since the beginning of the year. It is our considered view that the Pilot is failing to achieve the "culture change" it is seeking. In fact, it has increased complexity and cost for litigants. The new rules suck parties into a surreal world of hypothetical arguments over documents ahead of disclosure, but, in our experience, do not materially reduce the volume of documents actually disclosed. Clients are, therefore, being forced to incur unnecessary costs.

The prescriptive rules and steps laid out in the Pilot (particularly in connection with completion by the parties of the extremely lengthy DRD) are causing delay to the parties agreeing and the court approving the appropriate approach to disclosure. In our experience parties have needed to ask the court to delay the date of the Case Management Conference or have had to have separate hearings to deal solely with disclosure in order to allow time for the parties to fulfil the new obligations. Ultimately, this leads to a delay in cases coming to trial (or the possibility of settlement after the parties have disclosed their hand at the disclosure stage).

The Pilot is resulting in the parties engaging in (often) lengthy rounds of correspondence regarding the appropriate models for disclosure to be applied to each specific issue in the proceedings. Since at this stage the parties are unaware of what pool of documents will be returned by searches approved by the court, the parties are arguing over hypotheticals in an attempt to protect their position. The detailed consideration the Pilot requires at such an early stage in the proceedings means that costs are being incurred more quickly than would otherwise be the case. This is not necessarily reducing the cost of the disclosure exercise itself, however, since parties are inevitably having to modify their approach once the document pool is known and the review of documents has begun.

The models for disclosure introduced by the Pilot have added a layer of complexity to disclosure which was not previously there. Put simply, it is very different to explain to clients and for them to understand what is expected of them, yet the Pilot places obligations on solicitors to confirm that they have done so. We also consider that the likelihood of multiple models for disclosure being applicable in proceedings is likely to increase the cost of document review exercises since the added complexity will require increased input from more senior lawyers.

Whilst we agree that "Initial Disclosure" (parties disclosing key documents at the outset) could have its benefits, in reality this would usual happen in any event at the pre-action stage. The concept of "Initial Disclosure" therefore, is not in reality a new one.

Where to go from here?

The Pilot seeks to promote the use of technology and we think that is the key to solving the ever-increasing burden which disclosure places on clients. In our view, the costs incurred on hypothetical skirmishes could be better spent on AI and other technological assistance in reviewing disclosure in a world in which documents are almost exclusively electronic. The analytical tools of eDisclosure providers (such as de-duplication, email de-threading and technology-assisted review, which uses AI to ‘learn’ from human reviewers) are increasingly effective in narrowing down the number of documents so that human review is only required on a much smaller volume. The use of such technology serves to eliminate the premise for the Pilot, that document review is costly and that disclosure should therefore be curtailed. In our view, as technology assisted review moves into the mainstream the current prevailing wisdom, that more documents equates to higher review cost, will rapidly recede.

Demonstrating its commitment to shaping the future of litigation for the benefit of clients, Fieldfisher has recently provided feedback on the Pilot in response to a the Questionnaire prepared by Queen Mary University of London (found here) which will be collated by the University to assist with monitoring the implementation of the Pilot. We hope that our feedback will be taken on board.

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