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Insights

16 January 2020

The disclosure pilot scheme - a year on

This article looks at the Disclosure Pilot Scheme (the DPS) and how it could affect you and your business.

We are now a year into the DPS which is set to operate for another year in the Business and Property Courts across England & Wales, including the Commercial Court.

Whilst it does not currently apply in the County Court, the DPS is very likely here to stay and will inevitably have a wider application in the future.

What is it?

The DPS is a pilot scheme dealing with disclosure of ‘documents’ in civil proceedings. Disclosure is when both parties make evidence available to the other side which either supports or undermines their case.

Disclosure is a crucial stage in litigation which enables both parties to assess the strengths and weaknesses of the other party’s case and consequently the potential commercial risks going forward.

The DPS commenced on 1 January 2019 for a 2 year period and applies to new and existing proceedings in place of the current disclosure rules. It is contained within Practice Direction 51U of the Civil Procedure Rules.

The DPS implemented a complex set of rules and requires disclosure to start much earlier. It represented a significant shift in the approach to disclosure.

Over the last year, the DPS has been put to the test through the courts and practitioners have been given the opportunity to provide feedback so that it may be fine-tuned before it becomes permanent. The pilot has, for the most part, received a positive reception in its first year.

The objectives of the DPS
  1. To limit the costs, scale and complexity of the disclosure process. The DPS was reported as “requiring radical cultural change” by parties, their legal representatives and the judiciary.
  2. To achieve a more efficient and flexible disclosure process tailored to each case.
  3. To encourage a greater use of technology.
  4. To ensure key documents are disclosed at an earlier stage. Early disclosure should result in a greater proportion of cases settling once disclosure is completed, avoiding the significant cost of litigation.
How does it affect me and my business?

The DPS obliges parties to be more upfront in the disclosure of key documents at an earlier stage. The DPS is very prescriptive in relation to the practicalities of ensuring that documents are preserved and outlines the specific steps to be undertaken.

The DPS requires “document hold notices” to be sent to ensure that nothing is destroyed. Such notices must be sent to “relevant” employees, former employees, agents and third parties. The net is therefore cast wider than before.

Confirmation that the necessary steps have been taken to preserve documents must be provided to the court and the other side at an early stage. We have seen vigorous enforcement of this obligation by the court over the last year, to ensure compliance with the DPS and to ensure that the risk of destruction is removed and disclosure is uncompromised.

What Constitutes A Document?

The scope of what is considered to be a “document” under the DPS is very broad and is defined as “any record of any description containing information”.

A document takes any form including, but not limited to paper or electronic. It may be held on a computer or on portable devices such as memory sticks or mobile phones or within data bases. It includes all email and other electronic communications such as text messages, web mail, social media, voice-mail, audio or visual recordings.

Note that “document” is not limited to information readily accessible but also extends to information stored on servers and backup systems. It also includes electronic information that has been deleted. It extends to metadata and other embedded data.

Conclusion

Given the prescriptive nature of the duty and the broad scope of the definition of documents, the parties to litigation should carefully record all steps taken in relation to the preservation of documents in case they are required to be produced at a later stage. The obligation is widened by the requirement to contact former employees who had accountability/responsibility for the events that are the subject of the case or for the conduct of proceedings.

In short, there is an extensive obligation to demonstrate that any risk of destruction has been eradicated and that contact has been made with a far wider group of individuals than may have taken place under the old rules. Compliance with the DPS should of course result in earlier settlement and costs being reduced. Conversely, non-compliance leads to criticism by the court and potential cost sanctions.

We shall see what the second year of the DPS brings and whether the conclusions are that it has indeed delivered on its objectives to provide the increased flexibility, efficiency and tailored approach to disclosure that it sought to achieve.

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