UK: Show And Tell - The New Disclosure Rules

Last Updated: 20 May 2013
Article by Michael Axe

In this article, Michael Axe focuses on the new obligations regarding the disclosure of physical and electronic documents, which came in to effect on  1 April 2013, when the so-called "Jackson Reforms" overhauled the way in which court proceedings are conducted in England and Wales.

Since the Civil Procedure Rules were first introduced in 1998, parties involved in Court proceedings have had to "disclose" the relevant documents that they have to the other side.  As the technology progressed, the rules were updated to reflect the fact that a "document" was now as likely (or even more likely) to be in the form of electronically stored information ("ESI") as a piece of paper.  Nevertheless, the basic procedure for disclosure remained the same, as did the timetable which the parties had to follow, and also the test for determining whether or not a document needed to be disclosed to the other side.

However, when the "Jackson Reforms" were implemented on 1 April 2013, a whole new regime governing disclosure took effect.

Different procedures for "Multi-Track" cases

Under the previous regime, the rules governing disclosure were effectively the same, regardless of the size, complexity or value of the dispute.  Under the new regime, court cases allocated to the "Multi-Track" will now follow very different rules from the "standard disclosure" rules which still apply in non-Multi-Track cases.

Cases will normally be allocated to the Multi-Track when the value of the dispute exceeds £25,000, the trial is estimated to last more than one day, or extensive expert evidence is likely to be required.

The new Disclosure Report

Under the old regime, parties would wait for the Court to order disclosure, then they would carry out the disclosure exercise in accordance with "standard disclosure", the default position adopted in most cases.  After it had been completed, they would produce a Disclosure Statement confirming that they had complied with their disclosure obligations.

Under the new regime in Multi-Track cases, parties now need to file and serve a Disclosure Report before the Court makes an order for disclosure.

After the parties have exchanged their statements of case (eg the Particulars of Claim and the Defence),  but no later than 14 days before the first Case Management Conference (CMC), each party must now file and serve a Disclosure Report which:

  1. briefly describes the documents which exist or may exist that are or may be relevant to the issues in dispute;
  2. describes where those documents are or may be located;
  3. in the case of electronic documents/ESI, describes how those documents are stored;
  4. includes an estimate of the range of costs that could be involved in providing "standard disclosure" in the case (including the cost of searching for and disclosing electronic documents/ESI);
  5. states which of the directions for disclosure the party considers is appropriate (see below).

Early discussions with the other side

Once the parties have both filed and served their Disclosure Reports, the new rules state that they must discuss the potential arrangements for disclosure and attempt to agree a proposal for directions for disclosure (see below).  The discussions must take place not less than 7 days before the CMC, so that the agreed proposal for directions for disclosure (if an agreement can be reached) can be filed at Court in good time before the CMC.

Additional issues relating to Electronically Stored Information

The parties (and their legal representative) are also expected by the Court to discuss with each other prior to the CMC the potential arrangements relating to the disclosure of electronic documents/ESI.  In many cases, these discussions will be relatively straightforward, but in larger cases where there are likely to be a large amount of ESI that needs to be searched and potentially disclosed, the parties will need to discuss issues like the use of technology to assist in the electronic searches, and the format in which ESI is to be disclosed to the other side.

To assist with these discussions, the Courts encourage parties to complete the Electronic Documents Questionnaire ("EDQ").  If EDQs are being exchanged between the parties, they should be attached to the (compulsory) Disclosure Report.

Directions for disclosure

Under the old regime (and in non-Multi-Track cases now), as stated above the normal direction for disclosure made by the Court was for "standard disclosure".  In simple terms, this meant that the parties needed to carry out a reasonable search for and disclose documents which:

a)      the party intends to rely on;
b)      adversely affect that party's case;
c)      adversely affect the other party's case; or,
d)      support the other party's case.

In Multi-Track cases under the new regime, the parties can select the most appropriate direction for disclosure from the "menu" of options available, namely:

  1. an order dispensing with disclosure;
  2. an order that the parties disclose the documents on which they rely, and at the same time request any specific disclosure they require from the other party;
  3. an order that the parties provide disclosure on an issue-by-issue basis;
  4. an order that each party discloses any documents which it is reasonable to suppose may contain information which enables that party to advance its own case or to damage that of any other party, or which leads to an enquiry which has either of those consequences (which takes us back to the so-called "Peruvian Guano" test that disappeared under the last set of rule changes on disclosure);
  5. an order for standard disclosure;
  6. any other order in relation to disclosure that the Court considers is appropriate. 

If the parties have been able to agree a proposal for a direction for disclosure, the Court will consider whether that proposal is reasonable and appropriate, and if it is the Court will make the order for disclosure without the need for a hearing.

However, if the Court does not consider that the proposal is reasonable and appropriate in light of the "overriding objective" (which now suggests that disclosure should be guided by principles of proportionality rather than of relevance) and the need to limit disclosure to "that which is necessary to deal with the case justly", the CMC will most likely need to take place and the Court will make whatever direction for disclosure it considers is most appropriate.

When doing so, the Court may also give directions regarding the steps to be taken as part of the disclosure process, including:

  1. what searches are to be carried out, where they are to be carried out, for what, in respect of which time periods and by whom;
  2. the extent of any search for electronic documents/ESI;
  3. whether lists of documents are required to be exchanged;
  4. how and when the Disclosure Statement is to be given;
  5. in what format documents are to be disclosed;
  6. what is required in relation to documents that once existed but no longer exist; and,
  7. whether disclosure shall take place in stages. 

Where there is a large volume of electronic documents/ESI, the Court may also need to give specific directions in relation to any additional "e-disclosure" issues.  The driver behind the Court's thinking is the reduction in costs of any disclosure exercise that it considers to be unnecessarily wide or disproportionate in relation to the circumstances of that specific case.

We are already seeing the Courts becoming more interventionist in their approach to directions for disclosure, even where the parties have been largely in agreement.

Preserving documents from the outset

Parties should also bear in mind that the court rules state that as soon as litigation is contemplated, the parties are required to preserve all documents in their possession which may need to be disclosed during the course of any eventual Court proceedings.

This duty to preserve documents extends to all relevant electronic documents/ESI (including, for example, emails, spreadsheets, databases, images and even webpages), not just physical paper documents.  The duty to preserve documents also applies to documents which would otherwise be deleted/destroyed in accordance with a party's normal document retention policy or in the ordinary course of business.

This means that a party may have to suspend, or at least amend, its standard document retention policy as soon as litigation is contemplated, a practice which is often referred to as a "litigation hold".

The Early Bird...

Since the Civil Procedure Rules were first introduced in 1998, there has been a noticeable shift in the need to consider disclosure issues earlier and earlier, which also means that legal costs are being increasingly "front loaded".  Parties are now obligated to preserve documents as soon as litigation is contemplated, and they must complete detailed Disclosure Reports (and potentially Electronic Document Questionnaires as well) and have in depth discussions with the other side to attempt to agree arrangement for disclosure/e-disclosure, all before the Court's very first Case Management Conference.

Under the old regime, the Courts were quick to penalise in costs any party which failed to comply with its disclosure obligations, and there is no reason to suspect that the Court will be any more lenient under the new regime.  The big question will be, will the new disclosure regime save parties costs overall, as intended?  We will have to wait and see.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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