New regime set to radically reform disclosure in civil proceedings
Litigating parties can expect the judicial spotlight to be focused firmly on prescriptive management of disclosure following the arrival of the new Mandatory Disclosure Pilot Scheme on 1 January 2019.
In a response to concerns from the legal profession about disproportionate costs and the complexity of the current disclosure process, the new disclosure regime is designed to completely overhaul how parties deal with the exchange of documents which support or adversely affect their case.
The scheme is set to run initially for two years in the Business & Property Courts and if successful, is likely to be rolled out more widely to include County Courts.
Key Changes introduced by the DPS
There are a number of significant changes introduced by the new scheme, the most significant being:
- With very limited exceptions, 'Initial Disclosure' - that is the key documents on which parties rely to support their claim or defence - and which are necessary for the other party to understand the case against them - must now be served at the same time as the parties' statements of case (the Particulars of Claim and Defence). The number of documents will be capped at 200 documents or 1,000 pages of material.
- Search based 'Standard Disclosure' will no longer be the default option and instead the parties may seek 'Extended Disclosure' using a new menu of 5 options, called 'Models'. The Models range from just adverse documents which are known to exist (Model A), through to an extended version of standard disclosure (Model E). The parties are required to agree which Model should apply for each issue in dispute and have an express duty to cooperate and engage before the first Case Management Conference (CMC). At the CMC the Court will review the parties' proposals and can refuse or change the approach.
- There will be an enhanced emphasis on the duties of the parties for the preservation of documents. A party must preserve any relevant documents in its control and, once proceedings have commenced, must disclose all known adverse documents to the other party (unless privileged), regardless of whether an order to do so has been made. Importantly, these duties also apply to parties who know that they may become a party to proceedings, not just those that already are a party to proceedings.
- For a company or organisation, the relevant awareness for known adverse documents is that of "any person with accountability or responsibility ... for the events or the circumstances which are the subject of the case, or for the conduct of the proceedings". In addition, reasonable steps must be taken to check the position with anyone who had such accountability or responsibility, but has since left the organisation.
- The parties' legal representatives are also now expressly subject to these duties and further additional duties under paragraph 3.2 of the Disclosure Practice Direction (DPD). The duties of legal representatives also apply where they have been instructed by a client who knows it may become a party to proceedings that have been or may be commenced. It will be critical for practitioners to thoroughly read the DPD in order to discharge their disclosure obligations and to assist their clients to discharge theirs.
- The parties must also now use reasonable efforts to avoid drowning their opponent in voluminous irrelevant disclosure.
The new rules are clearly designed to create a more flexible process and to try and combat the excessive costs of complying with the current regime. It is hoped therefore that parties and their legal representatives will be encouraged to act more proportionately when dealing with disclosure and move away from a 'leave no stone unturned' and 'document dumping' mentality.
However some of the changes, such as the duty to check the position regarding known adverse documents with former employees who had "accountability or responsibility" within an organisation appear particularly onerous and we expect to see satellite litigation in this area.
On the whole, while the new rules are likely to bring a number of challenges, it can only be positive that disclosure is now required to start much sooner in proceedings, that parties will be expected to cooperate to a far greater degree than previously, and the costs of disclosure must be more proportionate.
We shall watch how the pilot scheme develops with interest.
If you would like more information on this topic, please contact Fiona Pearson, Senior Associate in Michelmores' Commercial & Regulatory Disputes team.