The future of disclosure

If you ask anyone familiar with litigating in England and Wales what is the most expensive element of civil litigation, it is likely that the answer will be “disclosure”. As the amount of data held by companies has grown exponentially with the increase of electronic communications, the cost of disclosure has risen accordingly and the rules for the process have failed to keep up. Indeed, the rules governing disclosure, found in Part 31 of the Civil Procedure Rules, were obviously drafted with hard copy documents in mind, with rules on copying and inspecting documents that assume they are on paper. Despite the fact that electronic documents now make up almost the totality of most disclosure exercises, the rules on “e-disclosure” are contained in a Practice Direction bolted on at the end of the section.

The English courts compete as a forum in which commercial parties can choose to resolve their disputes, with arbitration and the courts of other major jurisdictions keen to win market share. The rules of disclosure, and the “cards on the table” manner of litigation they characterise, are attractive to many companies. But the cost has grown over the last decade, to the point where the expense is detracting from the English courts’ reputation. We expect significant changes in the near future, but some notable developments are already taking place.

A la carte

The Jackson reforms of civil procedure in 2013 promised major changes to the regime for disclosure. A menu of options was introduced, the intention being that “standard disclosure” should not always be the default position. The menu included an order dispensing with disclosure altogether, specific disclosure by request from the other party, issue-based disclosure, or any other order the court considers appropriate. But take-up of these options has been minimal. In almost all cases in the High Court, the parties’ lawyers and the judiciary have simply continued to default to standard disclosure.

There are signs that, more recently, some members of the judiciary have started to be a little more pro-active about this. In Positec Power Tools (Europe) Ltd v Husqvarna AB, a patents case, Birss J looked at the menu of options when faced with an opposed application for standard disclosure. He noted that standard disclosure is only one of six options now, and that “any court deciding which of the options to adopt has to have some basis for that selection”. The judge looked at the value of the claim and the prospects of relevant information emerging from documents that would be disclosed. His conclusion was that if he made the order for standard disclosure, the “likely probative value of what [would be] produced is not worth the cost”.

The role of artificial intelligence

In most cases in the High Court now, the real debate about disclosure tends not to be about the menu of options, but instead about the scope of the search for electronic documents. It is the search for documents that costs money, along with their review to prevent the disclosure of privileged material or confidential data that does not fall to be disclosed. In many cases both sides argue for the other party to conduct as wide an exercise as possible, in the hope that this might catch something of use. This often leads to an expensive exercise and excessive material being disclosed that does not really advance or undermine either side’s case. In other cases the burden of disclosure falls mainly on one party. Here the party not facing the task (but hoping for useful documents) tends to argue for wide ranging search terms, while the party facing the task wants it to be limited.

If technology has created the problem of excessive documents needing to be reviewed, does it also hold the solution? In 2016 the English courts have recognised the value of “Technology Assisted Review” (TAR) in two decisions. These pave the way for the wider use of a technology that allows a computer to be “trained” to identify relevant documents and then carry out a first stage review to drastically reduce the scope of the human review. In Pyrrho Investments Ltd v MWB Property Ltd the court approved the use of TAR where both parties agreed to it (for more on this and how TAR works, see our article). Perhaps even more significantly, a Chancery Registrar has now approved the use of TAR in a case where one party objected to it, in the case of David Brown v BCA Trading. This will often be the case where a defendant company or institution faces the main burden of disclosure and seeks to manage this with technology, arousing the suspicion of the claimant.

This case also offers some clues as to the future direction of disclosure, beyond the approval of TAR on the grounds of cost. The judge ordered the parties to create a list of issues in the case and then state what disclosure they thought was necessary on each issue, along with what documents they expected to exist and their location. It is true that in many cases certain issues are unlikely to require any disclosure, which can then be focused upon issues where it may reveal probative documents. The judge also suggested the parties use the e-disclosure protocol proposed for use in the Technology and Construction Court, even though the case was not in that court. This protocol encourages a great deal of dialogue between parties over how to approach disclosure, with outstanding issues resolved by the court.

More change coming

A working party is currently examining the whole approach of the Civil Procedure Rules to disclosure and it is likely that the result will be a complete re-writing of the relevant section. This will bring the challenge of adapting to new rules, but in reality is long overdue. A new balance needs to be struck between the desire for a justice system that bases its decisions on all the evidence, not just what the parties wish to disclose, and the need for any process of searching for and reviewing documents to be far more focused and limited than is currently the case. Parties seeking to control the costs of litigation will need to gain a thorough understanding of the new rules when they emerge and look at how they can be used to bring proportionality to the disclosure exercise.