Do the recent changes to the Disclosure Pilot go far enough?

On 6 April 2021, the 127th Practice Direction came into force which included amendments to the on-going Disclosure Pilot Scheme. In this article, I consider the key changes and whether they address the concerns raised so far by Court users.

What is the Disclosure Pilot Scheme?

The Pilot has been applicable to all cases in the Business and Property Courts since 1 January 2019. Its stated purpose is to combat the cost and time burden increasingly associated with the disclosure process, in particular in cases involving large volumes of electronic material, as well as changing the culture surrounding disclosure by promoting a more collaborative approach.  It was initially due to last for two years but has since been extended until at least 31 December 2021.  Since its inception, practitioners have been invited to suggest proposals to improve the scheme, in what has been referred to as a “living pilot”.

How has the pilot been received?

Substantial feedback has been gathered from users of the Pilot and in 2020 Professor Rachael Mulheron of the School of Law at Queen Mary University of London published a lengthy report based on questionnaire responses up to November 2019.

Much of that feedback was negative with, for example, 85% of respondents reporting increased costs, 71% increased burden on Court time, and only 6% any improvement in culture.

Despite its mixed reception, the Disclosure Pilot is here to stay. Certain elements have, however, been tweaked recently in an effort to address some of the concerns raised by users.

What has changed from 6 April 2021?

Practice Direction 51U (“PD 51U”) took effect on 6 April 2021 in an effort to streamline user experience. The more significant updates include the following:

  •  Timing of disclosure of known adverse documents (para. 3.1(2)) – this section has been amended to confirm for the avoidance of any doubt that “known adverse documents” need not be disclosed as part of Initial Disclosure.

  • Preservation of Documents (para 4.2(2)): previously, PD 51U required parties to contact “all relevant employees and former employees” at the commencement of a claim, requesting that they preserve documents. In many instances, this was not only time consuming and costly, but of questionable benefit.

The update has removed the word “all” from the section reproduced above and added the caveat that it is necessary to contact employees and former employees only “where there are reasonable grounds for believing that [he/she] may be in possession of disclosable documents which are not also in the party’s possession”.

This reduction in scope will be welcomed by practitioners and larger organisations which in general will have copies of employees’ electronic communications. That said, parties and solicitors must still consider carefully at the outset of a case whether it is necessary to approach employees and former employees. For example, the increasing prevalence of professional communication via WhatsApp and similar platforms means that key exchanges may be recorded in locations that only the employees themselves have access to.

  • Completion of the Disclosure Review Document (“DRD”) (para 10.2) – a new provision has provided additional flexibility with respect to completing the DRD. In cases where disclosure will likely be limited, or the identification and retrieval of documents will likely be straightforward, practitioners will not have to complete every section of the DRD. Where there is disagreement between the parties, guidance can be sought via a Disclosure Guidance Hearing (see below). This may to some extent reduce the front loading of disclosure costs in smaller cases – another concern raised in the Mulheron report.

  • Disclosure Guidance Hearings (paras 11.1-11.3) – PD 51U as amended extends the scope for seeking guidance from the Court to “any point concerning the operation of the pilot in a particular case”. Express provision is also made for resolving requests without a hearing. Conversely, for more complex issues, express provision is also made for extending the time available, previously limited to a 30-minute hearing, with 30 minutes of pre-reading. These changes appear sensible, permitting the Court the flexibility both to avoid hearings where possible and to devote a realistic amount of time where necessary and likely to promote effective case management.

  • Complying with an Order for Extended Disclosure (para 12.6) – A new provision has been added allowing parties to apply to the Court for an order giving directions about any aspect of search-based Extended Disclosure including “the scope of searches, the manner in which searches are to be carried out and the use of technology”. This is expressly stated to be without prejudice to paragraph 11 under which the parties can seek “guidance” rather than “directions”. The Court always had the power to grant directions and it is a little unclear what issue the amendment seeks to address.  It does, however, highlight the potential for substantial costs and Court time to be expended resolving the fine detail of parties’ disclosure obligations.

  • Definition of “List of Documents” (Appendix 1) – The List of Documents definition has been amended to remove the requirement to state “how” information is held. Whereas previously it was necessary to set out whether information was held via, e.g., email or, memory stick, parties are now only required to “identify each document with a clear description including the date and, where applicable, any author, sender or recipient. Where appropriate the list must distinguish between documents which exist and those that no longer exist”. This minor amendment may save practitioners some time when collating a List of Documents. Although, the lists are by their nature intended to be concise and so the savings may be modest.

What next?

Although the Pilot is set to end on 31 December 2021, commentators consider it is likely to continue in one form or another for an extended period beyond that. Importantly, it is already stated that it will continue to apply to proceedings after 31 December 2021 “to which it applied at that point”.

The Pilot may well be amended further at the end of the year but, perhaps disappointingly, it seems unlikely there will be fundamental alterations. No one would argue with the objectives of the Pilot: i.e. an attempt to reduce the scope and cost of disclosure in a world of constantly new and evolving methods of recorded communication.

However, as can be seen from the Mulheron report, few in the profession believe the Pilot (which largely rehashed mechanisms already available under CPR 31 and its practice directions) is the answer, and the latest evolution is unlikely to win over its critics.

It is possible the Pilot is a “slow burner” which will over time create the cultural change it strives for, but it is more likely the Courts will need to be much more radical if they wish to significantly reduce the time and cost associated with disclosure. One possible answer it to do away with the “cards on the table” approach to litigation, long seen as a strength of the UK system. Instead, parties could be required to (as a starting point at least) disclose only those documents on which they rely. This approach is adopted in many other jurisdictions and it may be an unpleasant consequence of the digital age that the UK will have to follow suit if it wishes to maintain its position as a cost-effective centre for the resolution of international disputes.

Astraea Group is a forward-thinking London-based law firm with a global reputation for excellence. Our multidisciplinary practice covers commercial dispute resolution, arbitration, investigations, civil fraud, fintech & digital currency regulation, regulatory & compliance, public law, appellate advocacy, and reputation protection & crisis management. We act for major multinational, private and public sector companies, financial institutions, governments and regulators in the UK and overseas jurisdictions including Singapore, Malaysia, Thailand, US, Russia, Ukraine, Iceland, France, Germany, Spain, Italy, Uruguay, Australia, New Zealand, BVI, Cayman, Jersey and Isle of Man.

If you would like advice in relation to any of the issues discussed in this article, please give us a call or send an email.

The information provided in this article is of a general nature and does not constitute, nor should be relied on, as legal or professional advice.

News & Insights