Out-Law Guide 12 min. read
04 Oct 2022, 10:36 am
The process is intended to ensure that the parties "put their cards on the table" in respect of documentary evidence at an early stage.
This guide considers the process for disclosure under the Civil Procedure Rules, Practice Direction 57AD ('the Practice Direction'). This regime applies to most cases in the Business and Property Courts (BPCs) in England and Wales, which hear the majority of large commercial disputes. The Practice Direction makes permanent the disclosure pilot ('the pilot') which operated in the BPCs from January 2019 with effect from 1 October 2022.
The Practice Direction is subject to some simplification for cases which the court directs, or the parties agree, are “less complex" claims. This guide focuses on the main Practice Direction regime.
The disclosure regime in the Practice Direction aims to make disclosure more efficient and proportionate. These rules have introduced some important changes to disclosure in the cases to which they apply, some of which can lead to front-loading of work and cost. Even those who have previously been involved in litigation and the disclosure process should consider the detail.
Where the Practice Direction applies:
The focus of the Practice Direction is on disclosure between the parties to the dispute in the course of proceedings. The court also has certain powers to make orders that disclosure be provided by a likely party to the proceedings before proceedings have started; or that a third party, who is not party to the proceedings, must disclose certain documents. For an example of one of the court's powers to require third parties to disclose information, see our guide to seeking Norwich Pharmacal orders.
The disclosure exercise must be treated seriously because it can impact heavily on the outcome of proceedings. For example, credibility at trial can be adversely affected by a failure to give proper disclosure if documents have been overlooked or destroyed.
Once a person or organisation knows that it is or may become a party to proceedings or potential proceedings, it also owes a number of duties to the court. These include, among others, duties to:
The court can impose sanctions on a party that does not comply with its disclosure obligations.
Lawyers acting for a party or potential party to proceedings or prospective proceedings also owe independent duties to the court in relation to disclosure. These include, among others, duties to:
The meaning of 'documents' is not restricted to originals or paper copies. It also includes electronically-stored information (ESI).
There will invariably be ESI that is relevant to the dispute – for example emails (including "deleted" emails) and other electronic communications such as SMS and WhatsApp messages, social media content, voicemail and other audio and visual recordings. ESI extends to anything on which information of any description is recorded and will include information held in databases and on file servers, back-up systems, hard drives, memory sticks and mobile phones.
The disclosure exercise must be treated seriously because it can impact heavily on the outcome of proceedings.
Disclosure of ESI extends to the metadata attached to each document. Carrying out a simple act such as opening and printing a document can alter its metadata, so great care must be taken when dealing with ESI.
For more on electronic disclosure, see our separate Out-Law guide.
The obligation to disclose documents extends to those that are or have been within a party's control. 'Control' extends to documents of which a party has, or had, physical possession, or to which they have, or had, a right to possession or to inspect or to take copies. This will include documents in the possession of an employee or agent, over which a party has control. It may, but does not necessarily, include documents held by subsidiary companies, professional agents and ex-employees.
Relevant documents must be disclosed whether or not they are confidential, unless privilege applies. It may be possible for sensitive information which is irrelevant to the dispute and which is contained in a document that has to be disclosed to be redacted or blacked out, and in some cases there will be an obligation to do so.
As soon as a party knows that it is or may become a party to proceedings or potential proceedings, it must take steps to ensure that relevant documents are not destroyed or modified. Legal representatives also owe document preservation duties.
The Practice Direction specifies certain document preservation duties, including to:
It will be necessary to confirm to the court and to the other party that appropriate document preservation steps have been taken at various stages in the proceedings, including when serving the statement of case.
As a general rule, each party must provide initial disclosure when serving its statement of case. This is disclosure of the key documents on which the party relies, or to which it refers, in its statement of case, plus any other documents which are necessary for the other party to understand the case it has to meet. It is not necessary to carry out a search for these documents, although a search may have been carried out as part of the process of formulating the case, or taking advice on it.
The obligation to give initial disclosure is subject to certain exceptions, including that it is not required if it will involve disclosing more than about 200 documents or 1,000 pages, whichever is larger.
After statements of case have been served by the parties, the parties must indicate whether or not they will request any extended disclosure. In most cases, the parties will then cooperate to produce a 'list of issues for disclosure' – the key issues in dispute in the case which the court will need to decide by reference to documents. Each party will indicate against each of the issues which of a number of 'models' of disclosure should apply to that issue.
The models of disclosure are:
There is no presumption that any extended disclosure will be ordered, nor any default position that a particular model will apply.
The court will consider at the first case management conference (CMC) what is proportionate in the context of the case. In doing so, it will have regard to the overriding objective of ensuring that the burden and costs of disclosure are reasonable and proportionate in the context of the proceedings.
Disclosure extends to 'adverse' documents. These are documents which undermine the contention or version of events of the party giving disclosure, or which support the other party's contention or version of events.
Whichever order for disclosure is made, known adverse documents must always be disclosed. These are documents which the party is aware are or were previously in its control, without undertaking any further searches beyond those already undertaken, other than privileged documents, which are adverse.
Companies and organisations must take reasonable steps to check with individuals who have now left the company, who had responsibility for the events which are the subject of the dispute or for the conduct of the proceedings, whether they are aware of adverse documents.
The Practice Direction sets out the timescales for disclosing known adverse documents.
A number of steps must be taken in advance of the CMC, and the parties are required to cooperate closely. The Practice Direction sets out detailed, and fairly demanding, timescales for this process. It is therefore likely to be necessary to engage in early discussions with the other party in relation to disclosure.
If the parties intend to seek extended disclosure on certain models (only search-based models C, D and E), they must confirm this to each other soon after all statements of case have been served. They must then collaborate to produce a disclosure review document (DRD) containing the list of issues for disclosure and an indication of which model they consider should apply to each issue. The parties should try to reach agreement between themselves as to the appropriate models, but this will be subject to the court's approval.
A party who proposes model C disclosure of particular documents or narrow classes of documents must set out in the DRD how these documents or classes of documents should be defined. The other party has the opportunity to respond.
The parties must also hold mandatory discussions to complete a detailed section of the DRD which sets out what data each has and where documents are likely to be located; how the parties propose to process and search the data, including the technology that will be used; and the estimated costs of providing the disclosure proposed by each party.
The Practice Direction strongly encourages the use of e-disclosure technologies, and parties will be required to justify any decision not to rely on technology-assisted review (TAR) in cases which will involve the review of more than 50,000 documents. In most large cases it is likely to be necessary to engage the services of a specialist e-data provider from an early stage.
Where the model of disclosure ordered requires a search to be undertaken for documents, the party must generally make a reasonable and proportionate search. Determining what is "reasonable and proportionate" will be different in every case, but will involve considering factors such as the nature and complexity of the case, the number of documents potentially involved and associated costs. The court is likely to set some parameters around the way in which the search is to be carried out at the CMC and this should also be the subject of ongoing discussion with the other parties.
The need to search and review ESI will invariably be part of the process, and the role of technology and e-data providers will be important. E-data providers will be able to help with issues such as extracting ESI from hard drives and back-up servers, and with formulating an appropriate search and review methodology.
Extended disclosure is given by providing the other side with a list of the documents and producing them in electronic format. The Practice Direction sets out requirements for the format of the documents, including that metadata should be preserved.
The party or, in the case of an organisation, an appropriate person at the party will also need to sign a disclosure certificate in a prescribed form, including a statement of truth. This certificate confirms that the party has taken reasonable document preservation steps, disclosed all known adverse documents and carried out searches, which must be described, in a responsible and conscientious way, amongst other things.
The disclosure certificate will also identify separately those documents which are no longer in the party's control and which therefore cannot be produced, giving detail; and those documents in respect of which a right to withhold production is claimed, and the nature of that right (for example privilege – see below).
Proceedings for contempt of court may be brought against a person if they sign, or cause to be signed, a false disclosure certificate without an honest belief in its truth.
If either party is dissatisfied with the disclosure given by the other, whether in terms of the documents disclosed or the extent of the search undertaken, an application can be made to the court for an appropriate order in the right circumstances.
A disclosed document may be used only for the purposes of the proceedings unless the court orders otherwise, the disclosing party and the person to whom the document belongs agree, or the document is read or referred to in open court. If a document which has been read or referred to in open court is particularly sensitive, the court may be asked to make an order restricting or prohibiting its use.
A privileged document need not be shown to the other side.
The relevant types of privilege are likely to be 'legal advice privilege' and 'litigation privilege'. For more on the different types of privilege and the circumstances in which they apply, see our separate Out-Law guide.
It is important to understand the distinction between confidential and privileged documents. Not all communications between a client and its lawyers are privileged, notwithstanding that they may be of a confidential nature. However, privilege will no longer apply if a document loses its confidentiality – this makes it important to maintain confidentiality in all privileged documents.
The disclosure obligation continues until the conclusion of the proceedings. If relevant documents are identified or created after service of a party's extended disclosure, they must be disclosed to the other side immediately.
Where a party wishes to actually rely on a document which is found later in this way and which is helpful to that party, it must obtain the court's permission or the other party's agreement in order to do so. It is therefore important to carry out the disclosure exercise properly at the appropriate time.
Because the disclosure obligation extends to new documents that may be created during the course of proceedings, any internal documents discussing the merits of the litigation should be created with care. There is the risk that these documents may be disclosed to the other side, unless they are covered by privilege. Care must be taken over what is said in internal reports, board minutes and emails about the subject matter of the dispute. Reports about the litigation and its merits should be prepared by internal or external lawyers, in such a way as to maximise the chances that they are privileged from disclosure.
Any documents recording discussions between the parties aimed at settling or otherwise compromising the dispute will generally be 'off the record', in the sense that they may not be used in evidence by either party. These documents are usually referred to, and labelled, as 'without prejudice' communications.