Business Law & Compliance

The disclosure pilot scheme has begun. But what is it?

5 min read

30 January 2019

Christian Smith and Charles Goldblatt explain the purpose and key measures in the new disclosure pilot scheme – and what impact this will have on businesses affected.

Disclosure in commercial litigation is one of the most expensive aspects of dispute resolution. Clients, legal representatives and the Judiciary have routinely ignored the menu of disclosure options presently available under the existing regime, preferring instead to adopt the tried and tested route of Standard Disclosure.

Standard Disclosure requires a party to produce a list all of the documents on which it relies, that adversely affect its or another party’s case, or that support another party’s case.

In an attempt to achieve a more efficient and, therefore, cost-effective approach to disclosure, the Courts have introduced the Disclosure Pilot Scheme (DPS), which applies to cases in the Business and Property Courts (formerly the Chancery Division) from 1 January 2019.

The scheme is intended to drive a radical change of culture in parties’ approach to disclosure.

Key changes

The key changes introduced by the DPS are:

  • Detailed duties on clients and their lawyers, specifically in relation to document preservation and co-operation between solicitors, with sanctions for failure to comply;
  • The introduction of distinct concepts of “Initial Disclosure” and “Extended Disclosure”; and
  • A new Disclosure Review Document to replace the Disclosure Report and Electronic Disclosure Questionnaire.

Initial disclosure

Initial Disclosure, unlike Standard Disclosure, requires each party to provide to all others, at the same time as its statement of case (being Particulars of Claim or a Defence), a list of documents together with copies of the same (in electronic form, if possible).

That list is to include:

  • Key documents which are relied upon in support of the claim or defence advanced and any documents referred to therein; and
  • Key documents which are necessary to enable the other parties to understand the claim or defence they have to meet.

Extended disclosure

In addition or as an alternative to Initial Disclosure, Extended Disclosure involves the use of five Disclosure Models, namely:

  • Model A: Disclosure confined to known adverse documents
  • Model B: Limited disclosure
  • Model C: Request-led search-based disclosure
  • Model D: Narrow search-based disclosure, with or without Narrative Documents
  • Model E: Wide search-based disclosure

However, there is no automatic right to Extended Disclosure. The Court will only make an order where it is satisfied that it is appropriate to do so.

Disclosure review document

A new Disclosure Review Document (DRD) requires parties to identify, discuss and seek to agree the scope of any Extended Disclosure sought with reference to a “List of Issues for Disclosure” and parties are required to use “reasonable efforts” to avoid disclosing documents which have no relevance to those issues.

Comment

Meaningful pre-action dialogue between solicitors has always provided parties with an opportunity to know and understand, from the outset, the case being advanced by their opponents and the documents relied upon.

However, the DPS provides a clear emphasis on encouraging parties to adopt a focussed and collaborative approach to disclosure and to identify the documents which really matter to the issues in dispute at the earliest possible opportunity in line with the overriding objective to deal with cases justly and at proportionate cost.

It will be interesting to see whether the DPS is met with an increase in early applications for summary judgment/strike out as parties may no longer have to wait until disclosure is complete (which can be many months after a claim has been issued) to know the documentary strength of their opponent’s case.

The success of the scheme will ultimately depend on the willingness of clients, lawyers and judges for to apply the rules in the spirit in which they are intended, namely “thoughtfulness, discussion, cooperation and professionalism”, qualities which can be hard to find in a traditionally, and by its very nature, adversarial environment.

The specific sanctions imposed on parties who fail to comply with their disclosure obligations suggests that the DPS is more of a shove than a gentle push into this new approach to disclosure.

But if the reforms are intended to deliver a more efficient and, therefore, cost-effective civil litigation then clients and lawyers should welcome them with open arms.

Christian Smith is a partner, and Charles Goldblatt is a solicitor, at Seddons.