The disclosure pilot in the Business and Property Courts is due to expire at the end of 2021. So there is just over a year to turn what is a deeply unpopular scheme into something that the profession regards as workable. The chances of it simply being abandoned once the pilot expires, with everything reverting to the old Part 31 rules, are negligible.
The good news is that the lawyers and judges in charge of the pilot, the Disclosure Working Group (DWG), have their ears set to listening mode; though at this stage they want to hear about solutions, not problems. A feedback report by Professor Rachael Mulheron of Queen Mary University, published in September, has already prompted a raft of modest improvements by the DWG, which were approved by the Civil Procedure Rule Committee (CPRC) in October. The onerous duty to send out document preservation notices to past and present employees, for example, has now been narrowed to where there are ‘reasonable grounds’ to think the person has relevant documents that the party does not already have. Where parties are not seeking extended, search-based disclosure (models C, D or E), they can now agree to dispense with the disclosure review document (DRD), and the list of issues for disclosure. Other changes include some simplification of the DRD and clearer guidance about the timings of when adverse documents must be produced.
Somewhat frustratingly, though, while the CPRC has given the changes a green light, they have yet to receive the stamp of approval from the Ministry of Justice. It is highly unlikely that the MoJ’s civil servants will seek to meddle in this specialised area of civil procedure, but it is not clear when the disclosure changes will make it to the top of the ministerial agenda. In the meantime, the DWG is encouraging solicitors to start making use of most of the amendments, which are largely just changes to guidance rather than to prescriptive provisions. One exception is a change relating to listing documents for initial disclosure; this will need the agreement of both parties to opt out (as allowed under the current rules) until the amendment has been officially approved by the MoJ.
The idea of going back to the old rules isn’t likely. The problem of big data won’t be resolved by going back to the old world
While the improvements above are a step in the right direction, the DWG accepts that more must be done. It is beginning to formulate a new set of changes, which it plans to put before the CPRC in April. So what problems is it looking to tackle?
Ed Crosse, disputes partner at Simmons & Simmons and a key member of the DWG, highlights the issue of ‘lower-to-middle-value cases’. He tells the Gazette that the DWG did carefully consider such claims from the outset, particularly in courts outside London; and it met with court users in all of the Business and Property Courts before drawing up the pilot rules. But he adds that it has now become apparent that, in some of these claims, the disclosure pilot has proved ‘something of a sledgehammer to crack a nut’.
Crosse suggests that in (for example) a claim worth £250,000 to £500,000, in which disclosure costs might only be £10,000 to £25,000 under the old regime, it could be ‘disproportionate’ to require the ‘whole mechanics’ of drafting a list of issues for disclosure, producing a disclosure review document (DRD) and matching disclosure models to issues.
He acknowledges that in those lower-value claims where disclosure costs are not causing a problem, imposing the ‘whole overlay’ of the pilot is not helping. ‘That’s what we want to explore further and get further feedback on,’ he says, adding that one idea might be to have an opt-in or opt-out system for cases of a certain value, or where the cost of disclosure was at a certain level; or perhaps to exclude certain pilot requirements.
The issue is not straightforward. When the pilot was being drawn up, some clients – probably on the defendant side – highlighted these lower-and-middle-value claims as an area where disclosure costs were becoming increasingly disproportionate due to the rise of big data, and argued that they should be included within the rules.
‘We need to find a balance that does not restrict access to justice, preventing an owner-managed business, for example, from bringing its case; and we must make sure it doesn’t come at the cost of requiring large corporates to incur disproportionate costs… I would encourage people to contact us with ideas and solutions about what we should do in these types of case,’ remarks Crosse.
It is not just the lower-value end of litigation where changes are afoot. The pilot is causing a huge headache in multi-party claims, and the DWG recognises that something must be done.
In Mulheron’s feedback report, lawyers described the nightmarish complexity of having to agree a disclosure model for each issue, for each party. In one case involving 35 groups of represented defendants, there were 103 disclosure issues, and the claimant had to set up a giant spreadsheet to record all the information. Maintaining it was a full-time job for two junior associates.
Natalie Osafo, DWG member and senior associate at Stewarts, explains: ‘In multi-party cases there can be huge amounts of data. It’s proving challenging to comply with certain aspects of the pilot… the lists of issues for disclosure are proving very difficult and time-consuming to agree, with lengthy lists and parties taking different positions.’
Part of the problem lies not necessarily with the pilot itself, but the way that parties have interpreted it – listing far too many issues for disclosure, and treating the list as an early battleground rather than adopting a more cooperative approach. So an authoritative ruling in February by Sir Geoffrey Vos, chancellor of the High Court, in which he used a disclosure guidance hearing (DGH) to explain how aspects of the pilot should be approached, was very welcome.
In McParland and Partners Ltd v Whitehead  EWHC 298 (Ch), Vos reduced the number of issues for disclosure from 16 to three, stressing that these should be limited to ‘only those key issues in dispute, which the parties consider will need to be determined by the court with some reference to contemporaneous documents’. He asserted that issues for disclosure do not ‘extend to every issue which is disputed in the statements of case by denial or non-admission’; and will almost never be legal, rather than factual, issues. He also emphasised – while making no criticism of the parties before him – that there should be ‘a high level of cooperation between the parties and their representatives in agreeing the issues for disclosure’.
But even if parties do heed Vos’s advice and slash the number of issues for disclosure, this alone is unlikely to solve the problems in multi-party actions. Further reform is being looked at for those cases. What form might it take? The DWG is open to ideas. Cases with a large number of parties need heavy case management by a docketed judge. One option is for the parties to get in front of that judge early on, to be given a steer on disclosure, perhaps with some bespoke orders being made to disapply aspects of the pilot. Another option might be to allow an ‘opt-out’ for multi-party claims. That would go down well with litigators.
More broadly, another change on the cards is the introduction of a new ‘DRD lite’ – a slimmed down version of the disclosure review document, which goes further than the changes approved by the CPRC in October. This could be ‘less burdensome’ and ‘more proportionate’ to the disclosure exercise being conducted, suggests Crosse. It could be used for cases below a certain threshold, or it may be appropriate for higher-value cases where the actual disclosure exercise is limited, perhaps because there is a small dataset involved, or because the issues in dispute are mainly legal rather than factual.
Finally, the group is also looking at giving parties more help in terms of matching disclosure issues with specific disclosure models, a process that is currently tending to be ‘overengineered’ and causing parties to cause ‘unnecessary difficulties’ for themselves, observes Crosse. While the McParland ruling already gives a steer, this is likely to be further spelled out in specific guidance.
Hard of hearing
Getting to grips with a whole new set of disclosure rules was always going to be difficult, which is why the DWG provided a shiny big ‘help’ button for litigators in the form of a DGH. But lawyers have been surprisingly reluctant to push that button, which has puzzled the creators of the pilot. The number of DGHs is very low.
How are DGHs supposed to work? At a webinar for the Law Society’s commercial litigation conference last month, DWG member Chief Master Marsh explained that where parties cannot agree a way forward on disclosure, the DGH enables them to speak to the judge at no costs risk, explaining the issues, and being given a steer on how to proceed. Marsh added that judges would much rather see the solicitors actively involved, rather than having them appoint counsel at DGHs.
‘Why not come to see us?’ he urged. ‘We would love to see you and have a conversation. We will slot in a guidance hearing quickly if we can – to give you the help you need and send you on your way again.’
Crosse adds that the pilot requires solicitors to ‘be bold’ in a number of ways; not just in appearing before a judge at DGHs, but more broadly, in dealing with disclosure in a more cooperative way, particularly by picking up the phone to opponents, rather than dealing with everything by letter. ‘It takes a bit of confidence to say to the other side, “let’s talk”. You’re always worried you’ll make a concession [that you later regret]. But my experience is that when you do have that discussion, people’s positions often soften,’ he says.
Counting the cost
The big unanswered question in relation to the disclosure reforms is whether they will do anything to reduce the costs of disclosure – which did seem to be the key gripe of the FTSE 100 clients who sparked the reforms in the first place.
There is little doubt that the pilot frontloads costs on to the beginning of a case. But does it make enough savings later on – because less disclosure is ultimately sought – to tip the balance the other way? And even if it does save considerable sums on search-based disclosure, how do you factor in the unknown variables – such as the cases that settle at various points, and the extent to which that was influenced by the pilot? In reality, a true cost comparison with the way things were is never going to be possible; and according to Marsh, it is asking the wrong question.
‘Things had to change,’ he asserts, ‘and we have to be looking to the future. We are producing a scheme that’s operating against an ever-moving target. The volume of data increases hugely year on year. So rather than whether the scheme is “driving down” costs, a better measure may be whether it is “controlling costs for the future”.’
Marsh adds that any comparison with the old Part 31 rules is not a fair measure, because the old rules were not working. ‘What we have done is to provide a modern, workable, comprehensible scheme,’ he says.
Crosse urges: ‘This is an opportunity to make changes… so that we’ve had every opportunity to make the pilot as effective as we can. The idea of going back to the old rules isn’t likely. The problem of big data won’t be resolved by going back to the old world.’
Rachel Rothwell is a freelance journalist and Gazette columnist