Three Months On From The Disclosure Pilot Scheme – An Update

Three months on from the introduction of the Disclosure Pilot Scheme, we examine judicial developments.

The Disclosure Pilot Scheme (the Pilot) was introduced on 1 January 2019. Launched in the Business and Property Courts located in Birmingham, Bristol, Cardiff, Leeds, Liverpool, London, Manchester, and Newcastle, the pilot scheme introduces key changes, including;

• Setting out disclosure principles in the Practice Directives
• All parties and their legal representatives must cooperate to promote a process of cost-effective, consistent, and efficient disclosure
• Parties are obliged to meet to discuss and fill in a joint Disclosure Review Document (DRD) after the closure of statements and before the case management meeting
• Estimated costs of disclosure will be required when filing the DRD

The Pilot aims to balance the internationally renowned transparency of disclosure in English Courts with the need to manage the vast amounts of ESI now generated in civil litigation trials.  As we mentioned in a previous article, the expanse of electronic disclosure has resulted in many parts of the Civil Procedure Rules (CPR) being “ineffective, inflexible, and outmoded”.

The use of technology is now non-negotiable in relation to compliance

Although many law firms already utilise technology to effectively manage eDisclosure, the Pilot specifically provides that technology should be used to improve efficiency and proportionality.  This includes Technology Assisted Review (TAR) for analysing large quantities of electronic material.  Firms will have to reach a minimum level of technical competence to comply with the Pilot provisions.

Two issues surrounding the Pilot have been decided in recent cases, providing clarity and demonstrating Judicial support for the scheme.

How the Pilot will apply to pre-1 January cases – UTB LLC v Sheffield United & Others [2019] EWHC 914 (Ch)

The recent case of UTB LLC v Sheffield United & Others demonstrates how the Pilot will apply to cases brought before it being introduced.

The case involved a shareholder dispute related to the ownership structure of Sheffield Football Club. Both parties took for granted that CPR Part 31 applied to the disclosure application made on 14th March 2019 because an order for standard disclosure was made before the Pilot commenced.

During the application, Counsel for Sheffield United alerted the Court to the White Book at CPR 51.2.10, which stated:

“…the Pilot does not apply to any proceedings where a disclosure order had been made before it came into force unless that order is set aside or varied.”

However, Sir Geoffrey Vos, Chancellor of the High Court, ruled:

“The pilot was deliberately put in place without transitional provisions so that it would apply to all existing proceedings (apart from those specifically excluded) even where an initial disclosure order had been made.
“It seems to me that the note is a misunderstanding of paragraph 1.3… Plainly, it is one thing to say that a pre-existing order will not be disturbed by the commencement of the pilot, and quite another to say that the pilot is not applicable to any proceedings where a disclosure order has already been made. Only the first is correct.
“To be clear, I am quite satisfied that the pilot was intended to apply and does apply, to all relevant proceedings subsisting in the Business and Property Courts, whether started before or after 1 January 2019, even in a case where a disclosure order was made before 1 January 2019 under CPR part 31.”

This decision makes clear that even if an application for disclosure was made prior to the Pilot launch, any subsequent applications for disclosure made in the Business and Property Courts will be subject to the principles laid down in PD51U, with which parties will be expected to have complied.

Another recent case highlights why the Pilot is seen by the Judiciary to be essential.

“Verbal brawl” – Master states case shows why Pilot was required – Canary Riverside Estate Management Ltd v Circus Apartments Ltd [2019] EWHC 154 (Ch)

A Chancery Master who listened to two full days of disclosure in Canary Riverside Estate Management Ltd v Circus Apartments Ltd stated that”

“It [the case] is becoming a verbal brawl and the parties should not lose sight of their duty under CPR 1.3, which requires them to help the court to further the overriding objective”.

Master Shuman went on to say:

“This case provides a good example of why the disclosure pilot was necessary…
“Cases must be dealt with justly and at proportionate cost. I question that the overriding objective is being adhered to by the parties given how much of the court’s resources have already been allocated to this case and the costs of this exercise to the parties.
“There is a need for the parties to focus on what is required in a case; it requires both cooperation between the professionals and for the parties to assist the court.”

In summary

These initial cases indicate the Judiciary is using the Pilot to bring some control over the escalating costs of disclosure. If English courts are to continue to be the preferred jurisdiction to resolve commercial disputes, it is vital that Civil Procedure Rules are brought into line with the explosion of ESI, which, with the development of AI and popularity of the Internet of Things, is only set to increase rapidly.

If you have any questions regarding eDiscovery, please contact our team on +44 (0)20 7940 4799 or email info@lineal.com.