Pilot no more – Disclosure regime becomes permanent

Three and a half years after it was unveiled as the response to widespread discontent with the extent and cost of disclosure in the era of big data, the Disclosure Pilot Scheme is to become a permanent Practice Direction: PD 57AD. At its meeting on 1 July 2022, the CPRC approved further refinements to the Disclosure Pilot and decided that the pilot should become a permanent regime for disclosure in the Business and Property Courts, subject to the same exceptions as during the pilot.

Further amendments

A further round of changes will be included in the final text, reflecting feedback received since the last changes earlier this year.  In particular, the indicative value for the Less Complex Claims regime has been increased from £500,000 to £1,000,000. While value is only one of four criteria which indicate whether a claim can be regarded as less complex, the aim is clearly to push more cases towards the simplified procedure.  See here for details.

One important clarification is that a party can propose that it conducts its own disclosure under Model C, the disclosure of particular documents or narrow classes of documents, rather than just suggesting it for the other side's disclosure. This will involve a party framing the category of documents that it would disclose on an issue, but the requirement to disclose Known Adverse Documents should remove the risk of suggestions aimed at excluding unhelpful material.

Another change is that the guidance on the primary function of Issues for Disclosure, which was previously included in the Less Complex Claims section, has been included in the Practice Direction. This makes clear that Issues for Disclosure should be framed so as to assist the parties in identifying documents that are likely to exist and require to be disclosed and to assist those carrying out the disclosure process to do so in a practical and proportionate way.  The Issues should also help avoid the production of documents that are not relevant to the issues in the proceeding.

The fact that the PD does not apply to Part 8 claims is made express, but the process for disclosure in those cases is also clarified. A party seeking disclosure in a Part 8 claim will need to file a list of Issues for Disclosure and proposed Models, after which the court can adopt the provisions of the PD as it deems appropriate.

Cultural change

The radically different approach to disclosure that was introduced by the pilot scheme has inevitably had its critics. The cultural change it was intended to bring has not always been evident and for parties who are intent on making every stage of the litigation process its own battle, new procedures inevitably mean new points to argue. Judicial criticism of uncooperative behaviour in some early cases may have reduced this, but some solicitors still take the view that acting in the best interests of their client means taking every possible procedural point.

The requirement to identify which issues in the case really require disclosure, and to consider the most efficient way of going about it, also bring forward some costs of the process. But the Working Group and judges have noted that applications for specific disclosure have become a rarity as a result of the increased transparency of the process from the outset.

Sir Julian Flaux, Chancellor of the High Court, noted that "this early thought and engagement by users has seen a dramatic decline in the number of post CMC applications for specific disclosure and a far more focused and efficient approach to the disclosure process".

The emphasis on transparency up front, and throughout the process, as to how parties are going to conduct their search for documents should prevent complaints as to the process adopted at the end. The colossal waste of costs seen when disclosure effectively had to be done again, in cases such as West African Gas Pipeline Company Limited v Willbros Global Holdings Incshould be a thing of the past.

Next steps

Subject to Ministerial approval, the new Practice Direction, with the final round of changes, will come into force on 1 October 2022. As with previous rounds of changes in the "living pilot", while the proposed changes remain in draft and have no formal status, litigants should consider whether they might be proposed to apply if the parties agree.