The Disclosure Pilot Scheme (PD51U) – A History of Electronic Disclosure (Part Six)

By: Dr Tristan Jenkinson

The Disclosure Working Group

As discussed at the end of part five of this series, in May 2016 a new working group was set up by Sir Terence Etherton to investigate the perceived excessive costs, scale and complexity of disclosure in England and Wales. The creation of the working group was at least in part due to concerns raised in a 2015 complaint by the GC100 (the association that represents general counsel and company secretaries working in the FTSE 100 companies) relating to the cost efficiency of disclosure.

The working group was headed by the Rt. Hon. Dame Elizabeth Gloster (then vice-president of the Civil Division of the Court of Appeal) and included many industry experts as well as lawyers and judges. A subcommittee of just four members (Chief Master Matthew Marsh, Hon. Mr Justice Robin Knowles, Ed Crosse and Vannina Ettori) was set up to draft the proposals which would be recommended by the working group. Those proposals became Practice Direction 51U – “The Disclosure Pilot Scheme”.

The pilot scheme started in the Business and Property Courts on 1 January 2019 and was designed to run for two years. A copy of Practice Direction 51U can be found here.

Technology Focus

It is clear that the efficient use of technology is an area of focus for the pilot. One of the difficulties identified prior to the commencement of the pilot was the increasing volume of data. It therefore made perfect sense that effective and efficient approaches to filtering that data using technology would be an important consideration in moving disclosure forward.

This focus on technology is displayed in the words of the practice direction itself, for instance 3.2 (3) requires that legal representative have a duty “to promote the reliable, efficient and cost-effective conduct of disclosure, including through the use of technology” (my emphasis added). While 9.6 (3) states that parties must seek to agree the use of “software or analytical tools, including technology assisted review software and techniques”, “coding strategies, including to reduce duplication” and “prioritisation and workflows”.

Questions 13 and 14 of the Disclosure Review Document (which we shall discuss further below) highlight potential uses of technology. There is a clear expectation that technology should be used, at least in cases above 50,000 documents:

“Parties are to consider using the full range of tools in the analytics suite available to them (either in-house or via e-disclosure specialist firms), to assist in the review. This might include some of the more complex tools available such as technology (or computer) assisted review (TAR or CAR), and other similar software review tools (see question 14 below). Parties should identify which analytics tools / methods they will be using, and any configuration applied to those tools. Analytics can include but is not limited to the following: email threading, near duplicate identification, concept searching, concept clustering and foreign language analysis.”

and

“Parties are to consider the use of technology / computer assisted review tools. These are software tools used for prioritising or coding a collection of documents which take account of a senior lawyer’s review and judgments on a set of documents and then extrapolate those judgments to the remaining document collection. Where parties have considered the use of such tools but decided against it at this stage (particularly where the review universe is in excess of 50,000 documents) they should set out reasoning as to why such tools will not be used.”

The DRD also covers technology which may not yet be available, in a form of “technology futureproofing”:

“This guidance identifies various forms of analytics, and technology or computer assisted review software which are currently available and in use. The parties should not, however, feel constrained from proposing new forms of processing and review software, which may be developed in the future and which may be appropriate for use in any given case.”

The use of technology was also a major topic for those behind the scheme, with Ed Cross commenting prior to its implementation:

“The Pilot offers a unique opportunity to address the challenge presented by the proliferation of data and places, at its heart, the use of technology to process and review documents, recognising that whist technology has been a big cause of the problem, it also presents part of the solution”

This sentiment echoed the Rt. Hon. Sir Terence Etherton, Master of the Rolls, who stated:

“It is imperative that our disclosure system is, and is seen to be, highly efficient and flexible, reflecting developments in technology”

The GC100 and the Problem to Solve

As mentioned above, one of the factors in the launching of the disclosure working group was a complaint raised by the GC100.

The complaint led to a seminar in April 2016. A comment on some of the content of that seminar can be found in this note from The Hon. Mr Justice Blair from November 2016.

The note provides a good description of the importance of disclosure to the courts, and highlights one of the main issues at hand:

“[Disclosure] is part of the DNA of our system of civil justice, and for a good practical reason. The contemporaneous documents may provide the best way of testing whether assertions made by parties are in fact correct. They can also anchor the chronology where it is important to the court, and to all parties, to know the precise course of events in reliable detail.

Having said that, the scope of disclosure is ultimately an exercise which has to balance these considerations against the cost.”

A document containing notes from a GC100 roundtable in early 2018 identified key areas of concern raised by the GC100:

“The key areas of concern are:

The scope of disclosure has ballooned, largely due to the increasing ability to produce data. This is likely to increase and clearly necessitates a change of approach regarding the disclosure process.

Only a very small number of the disclosed documents are of real interest or significance in court.

Solicitors representing opposing parties are not engaging with each other in a helpful way in relation to disclosure.

The courts have not been as robust as they might have been in controlling disclosure.

The current rule is inadequate and could benefit from modernisation; for example, the main rule places an emphasis on paper-based disclosure, which is no longer appropriate.

The concept of “standard disclosure” has failed to reduce the scope of the exercise. The menu of options under Part 31 is not widely used and there is a perception that, despite the reforms of 2013, there has not been a significant change of approach or resulting cost savings.

There is a real risk that the process and attractiveness of the English courts is being undermined due to the time and cost generated by the current disclosure regime.”

These concerns were clearly echoed by others, with the working group having stated a very similar listing of “Key Defects” in the approach to disclosure in a guidance note in November 2017:

Since the CPR came into force 18 years ago the volume of data that may fall to be disclosed has vastly increased, often to unmanageable proportions. The hope that the standard disclosure test introduced in the CPR would reduce the volume of disclosure, and its cost, has not been fulfilled.

Although the 2013 Jackson reforms set out a broad menu of disclosure options, which range from no disclosure at all, to disclosure by issue, through to very wide disclosure, the reality is that neither the profession, nor the judiciary, has adequately utilised the wide range of alternative orders added as CPR 31.5(7). Standard disclosure has remained the default for most cases.

The existing rule is conceptually based on paper disclosure and is not fit for purpose in dealing with electronic data.

Disclosure orders are not sufficiently focused on the issues.

There is often inadequate engagement between the parties before the first CMC in relation to disclosure; and

Searches are often far wider than is necessary.

It was this list of defects in the disclosure regime that the working group set out to design a methodology to resolve in their disclosure pilot scheme.

The Major Changes

No More Standard Disclosure by Default

While technically standard disclosure had not been a “default” since April 2013 and the insertion of the Menu Option (see part 5 of this series) it had remained the de-facto default option (as noted in the second point of the working group’s list above).

The working group wanted to move away from the idea of a default approach to disclosure, emphasising that the approach should very much be dependent on the case. So a new approach to disclosure, incorporating its own variation on Jackson’s “menu option” was formed.

Initial and Extended Disclosure – An Issues Based Approach

The new approach split the disclosure burden into two – an “initial disclosure” of key documents, followed by an “extended disclosure” which would take an issue based approach. This means that a list of issues for disclosure would be created (if not already in existence) and an appropriate model chosen to resolve disclosure for each issue listed.

It should be noted that the list of issues for disclosure is not designed to be detailed and specific. They should cover only the key issues in the case for which disclosure is sought – not a list of every issue from the statement of case which is disputed. As will be discussed later, some additional guidance on this point was provided by Chancellor of the High Court, Sir Geoffrey Vos in the case of McParland & Partners v Whitehead.

Initial Disclosure

Unless explicitly excluded, each party would be expected to provide an initial disclosure. The initial disclosure should not be extensive, or burdensome, but should include the key documents to be relied upon – for example those documents to be relied upon for the statement of case (or defence) and those documents which would be required for those not involved in the case to understand the claim or defence.

An initial disclosure should be limited to 200 documents (or 1,000 pages).

It is worth noting that there was an exception for the expectation of initial disclosure – if a party concludes and confirms in writing (in good faith) that their initial disclosure would exceed the above volumes, then all parties would be excluded from having to provide initial disclosure.

It was hoped by many that the use of initial disclosure may lead to an increase in the early settlement of cases.

Extended Disclosure

Extended disclosure is not subsequently required by default – the parties involved have to make a request for extended disclosure – though this can be done through use of the Disclosure Review Document (discussed shortly).

Extended Disclosure requires a list of issues to be drafted, and a decision on how disclosure should be completed for each issue. The basis for how disclosure will be approached for each issue could be one of five (potentially six) stated models, which will be discussed below.

The Disclosure Review Document

The Disclosure Review Document “DRD” is available as an appendix to PD51U. The document takes on a similar role to the Electronic Documents Questionnaire (EDQ) discussed in part five of this series. The main role of the DRD is to lay out the listing of issues and select the models of disclosure that will apply to each of those issues.

In addition the DRD “provides a framework for discussions around the initial scoping of disclosure” and is used to provide the court with the proposals for disclosure. The method of disclosure for each issue will be ordered by the court, typically at the case management conference.

In contrast to the EDQ, which is (typically) a voluntary document, the DRD is designed to be mandatory. It is also a “joint” document to be filled out by both parties involved in the litigation. It is envisaged that this will serve to increase cooperation and communication between the parties – something highlighted in the working group’s list of key issues to be addressed.

Adverse Documents

Obligations regarding the disclosure of adverse documents have been reworked. Under the previous Part 31 direction, 31.6 laid out that standard disclosure required parties to disclose documents which adversely affect their own case. Under 51U, parties must disclose “known adverse documents”.

Under the new approach, a document is known if the party is actually aware “without undertaking any further search for documents than it has already undertaken” of the document.

It is notable that under PD51U, a company or organisation is aware “if any person with accountability or responsibility within the company or organisation for the events or the circumstances which are the subject of the case, or for the conduct of the proceedings, is aware”. This means that “reasonable steps” must be taken to check with anyone in such a position who is no longer employed by the company/organisation. An amendment to the disclosure pilot on this point has been put forward which will be discussed later.

A document is adverse if “it or any information it contains contradicts or materially damages the disclosing party’s contention or version of events on an issue in dispute, or supports the contention or version of events of an opposing party on an issue in dispute”.

A known adverse document is then one which:

  • Is not privileged
  • The party is aware of (bearing in mind the explanation above)
  • Is adverse
  • Is or was in the control of the party

There is a focus on known adverse documents in the new practice direction, with their disclosure being required (excepting those which are privileged), regardless of any other order being made.  For example, even if there is an order for no disclosure, known adverse documents must still be disclosed.

Principles and Duties

The principles of disclosure, as well as the duties of legal representatives are clearly laid out in the practice direction, as are certain expectations – such as “[t]he court expects the parties (and their representatives) to cooperate with each other and to assist the court so that the scope of disclosure, if any, that is required in proceedings can be agreed or determined by the court in the most efficient way possible”.

Legal representatives must not only notify their clients to preserve relevant documents, but must confirm in writing (at the time that the particulars of claim/defence are filed) that steps have been taken to preserve relevant documents.

Further duties of legal representatives are laid out in paragraph 3.2:

  • to take reasonable steps to preserve documents within their control that may be relevant to any issue in the proceedings;
  • to take reasonable steps to advise and assist the party to comply with its Disclosure Duties;
  • to liaise and cooperate with the legal representatives of the other parties to the proceedings (or the other parties where they do not have legal representatives) so as to promote the reliable, efficient and cost-effective conduct of disclosure, including through the use of technology;
  • to act honestly in relation to the process of giving disclosure and reviewing documents disclosed by the other party; and
  • to undertake a review to satisfy themselves that any claim by the party to privilege from disclosing a document is properly made and the reason for the claim to privilege is sufficiently explained.

The Models

As noted above, there are five disclosure models that can be applied to any particular issue for disclosure in the case. Known adverse documents will be required to be disclosed in all cases.

Model A: Disclosure Confined to Known Adverse Documents

Effectively this is a rule for no disclosure, aside from known adverse documents.

Model B: Limited Disclosure

This is similar to the information typically provided in initial disclosure (It may be used for example if the initial disclosure was expected to exceed the size expectations). This model includes key documents which the party will rely upon, as well as other documents which are required to understand the claim or defence.

No additional searches are required, but if they are, any adverse documents uncovered would also have to be disclosed.

Model C: Request-led Search-based Disclosure

Disclosure is made based on a list of specific documents, or narrow classes of documents. Such requests can be laid out in the DRD, or ordered by the court.

Model D: Narrow Search-based Disclosure (With or Without Narrative Documents)

This model is the new equivalent of what was “Standard Disclosure”. Parties disclose documents which are likely to support or adversely affect their, or another parties, claim or defence. As with standard disclosure previously, the parties must undertake a “reasonable and proportionate search” for the above.

Narrative documents are documents which are not relevant to the specific issues for disclosure, but are relevant to the background or context of material information. If not specifically ordered to be included, the practice direction states that narrative documents should not be included in disclosure.

Model E: Wide Search-based Disclosure

The practice direction specifically states that Model E is “only to be ordered in an exceptional case”. The reason for this is that Model E extends the Model D disclosure to also include “train of enquiry” documents. This effectively is the disclosure that was in effect in Order 24 of the Rules of the Supreme Court, commonly referred to as the “Peruvian Guano” model – see the first article in this series for more details.

Nothing New?

Those who have read other articles in this series may find the above models familiar.

Jackson’s Menu Option

The disclosure models provided are not dissimilar to those injected into CPR 31.5 in April 2013 as part of Lord Justice Jacksons “Menu Option” (covered in the previous article of this series) which allowed disclosure requests for:

  • an order dispensing with disclosure
  • an order that a party disclose the documents on which it relies, and at the same time request any specific disclosure it requires from any other party
  • an order that directs, where practicable, the disclosure to be given by each party on an issue by issue basis
  • an order that each party disclose any documents which it is reasonable to suppose may contain information which enables that party to advance its own case or to damage that of any other party, or which leads to an enquiry which has either of those consequences
  • an order that a party give standard disclosure
  • any other order in relation to disclosure that the court considers appropriate

Jackson’s Disclosure Reform Options

In his final report of December 2009, Lord Justice Jackson had also identified a number of options for disclosure reform (again you can find these in the previous article in this series). These reform options included introducing issue-based disclosure and abolishing standard disclosure.

Woolf’s Categories of Potentially Relevant Documents

The models also bear similarity to the categories of potentially relevant documents identified by Lord Justice Woolf in his Access to Justice Report (Chapter 12 Paragraph 38). These were covered in part two of this series.

Why Change?

Many saw the new rules included in the disclosure pilot scheme as revolutionary, though the ideas behind them are far from new. In addition, much of what is now required under PD51U, was already possible under CPR31.

This does ask the question – if so much of this was already possible, why the change?

New Guidelines to Promote Cultural Shift

The working group were aware that much of what was proposed was already possible under CPR31. Indeed, in his note from November 2016, discussing the origin of the working group, Hon Mr Justice Blair highlighted the options were available:

“As you will know, since April 2013, standard disclosure has ceased to be the default position. Under the CPR, the court may dispense with disclosure altogether. I made just such an order by consent in a case in the Financial List a few weeks ago. Another option is an order in the form of the IBA Rules on the Taking of Evidence in International Arbitration. There are, in fact, five options listed in the Rules. The criticism has been made that too often the parties simply assume that standard disclosure should take place, and I think that there is force in that criticism. The judges will expect parties to be more proactive in this respect.”

The above also serves to highlight the main reason for the new guidelines. Though many disclosure options were possible, standard disclosure was still viewed as the de facto default approach and judges and parties alike seemed reluctant to move away from this.

In their guidance note from 2017, the working group stated:

“The unanimous view of the Working Group was that a wholesale cultural change is required and that this can only be achieved by the widespread promulgation of a completely new rule and guidelines. There will need to be a change in professional attitudes and a shift towards more pro-active case management by judges. The proposal (in very broad summary) is that there would be no automatic entitlement to search based disclosure and the court would only make an order for what is to be termed ‘extended disclosure’ if there has been full engagement between the parties before the CMC. An order for extended disclosure would be tailored to the issues in the claim. The new approach is designed to be more flexible than the current Part 31 and to reflect developments in technology. To achieve this cultural change the Disclosure Working Group has recommended that CPR Part 31 and the associated Practice Directions should be rewritten, reordered, and simplified, into a single rule.”

The approach of the disclosure pilot scheme was underlined by Sir Geoffrey Vos, Chancellor of the High Court in a judgment on UTB LLC v Sheffield United Ltd (one of the early cases in which the disclosure pilot scheme was applied) in which he stated:

“I should note that the introduction of the Pilot was intended to effect a culture change. The Pilot is not simply a rewrite of CPR Part 31. It operates along different lines driven by reasonableness and proportionality (see paragraph 2 of PD51U), with disclosure being directed specifically to defined issues arising in the proceedings.”

Still Work To Be Done

The disclosure pilot scheme was designed as a “living pilot” which could be monitored and developed accordingly as it progressed. To date, there have been three interim reports made by the scheme’s Official Monitor (Professor Rachael Mulheron of Queen Mary University of London) on the progress of the scheme. The latest of these includes consideration of the responses to a questionnaire supplied to legal practitioners involved with the implementation of the scheme.

A copy of the third interim report can be found here.

Professor Mulheron prefaces the report with a comment that “The tenor of the responses to the Questionnaire which prompted this report were frequently quite negative, and sometimes, emphatically, even vociferously, so” and explains that the issues could have been amplified by two factors – that the scheme is still early in its life, so some aspects are difficult to ascertain, and that many have answered the questionnaire specifically because they “had concerns, ‘beefs’, difficult experiences, and/or suggestions for change” so they may not be  statistically representative.

That preface makes sense when looking at some of the responses:

  • 85% of respondents said that the scheme incurred additional costs, whereas 10% said it was too early to say, and just 4% said that that scheme saved costs
  • 44% of respondents said that they “had encountered difficulties” dealing with adverse documents
  • 78% of respondents said that there had been no change of culture, compared to 16% who said that it was too early to say and 6% who said that culture change was evident
  • 66% of respondents said that they encountered difficulties in the preservation of data
  • 78% of respondents said that parties disagreed on models, with just 13% saying that parties agreed on the models to be used
  • 88% said that the DRD increased costs and time, compared to just 6% who said that the DRD saved costs and time
  • 42% of respondents said that the approach had resulted in disclosure being less accurate, compared to 42% who said it was too early and just 16% who said that the new scheme was more accurate

There are clearly areas that need to be improved, not least because the above relate to key points or aims of the scheme. However, it is important to bear in mind the points that Professor Mulheron made with regard to the statistical skew based on who participated in the questionnaire.

The third interim report, as it is designed, has resulted in some changes to the scheme itself to address some of the above points.

Amendments

As noted above, following the third interim report from Professor Mulheron, a number of proposed amendments to the practice direction were suggested by the disclosure working group.

Some of the main changes include:

  • Clarifications regarding adverse documents – including confirming that there is no obligation to provide adverse documents in the initial disclosure. This followed guidance which was provided by Justice Stuart-Smith in the Castle Water v Thames Water case – which can be read here.
  • Clarifications on approaching former employees with regard to the preservation of documents. Additional wording is to be added (to paragraph 4.2(2)) in order to state that that this is only required “where there are reasonable grounds for believing that the employee or former employee may be in possession of disclosable documents which are not also in the party’s possession”.
  • A series of simplifications to the DRD, including the possibility of shortening or modifying the DRD for simple or complex cases where this is warranted, or indeed not requiring the DRD to be completed if Models A or B are agreed.

Further information on the suggested amendments to the disclosure pilot scheme can be found here.

A copy of the proposed updated practice direction can be found here.

Cooperation not Weaponisation

One of the main topics within the disclosure pilot scheme is the cooperation of the parties. This is a fundamental requirement – failure to do so could lead to sanctions as per paragraph 20.2.

However, some parties that have failed to take note of the requirement, instead seeking to weaponise the new disclosure processes and use the new rules to attack their opponents.

In the case of McParland & Partners v Whitehead (which can be read here) Chancellor of the High Court, Sir Geoffrey Vos, provided some helpful guidance on how the disclosure pilot should be utilised (with a focus on the appropriate granularity when deciding upon a list of issues for disclosure). The Chancellor goes on to clearly state that such weaponisation of the disclosure pilot scheme would not be tolerated:

“It is clear that some parties to litigation in all areas of the Business and Property Courts have sought to use the Disclosure Pilot as a stick with which to beat their opponents. Such conduct is entirely unacceptable, and parties can expect to be met with immediately payable adverse costs orders if that is what has happened. No advantage can be gained by being difficult about the agreement of Issues for Disclosure or of a DRD, and I would expect judges at all levels to be astute to call out any parties that fail properly to cooperate as the Disclosure Pilot requires.

… Cooperation between legal advisers is imperative. The Disclosure Pilot must not be used as an opportunity for litigation advantage. If that is attempted, the parties responsible will face serious adverse costs consequences.”

The Disclosure Pilot Scheme and the Future

Electronic disclosure has come a long way from “discovery” in the Rules of the Supreme Court, having adapted to electronic data along the way. As the data volumes and costs of disclosure have continued to increase, many approaches have been tried to find a suitable balance – ensuring that the integrity of the legal approach is upheld by the right information being available to be considered, without the cost of doing so becoming disproportionate to the case in question.

The disclosure pilot scheme is the latest approach in this endeavour. While it may be seen as a major change in approach, the changes made are rooted in the history of previous approaches.

The pilot has been extended (as of the 122nd update to practice direction amendments) to now run for three years, rather than the initial two years. There is clearly still work to do, but the fact that we have a “living pilot” means that it can continuously be improved. Perhaps a further year of growth and development will help the pilot to become the solution that many are hoping for.

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