Author: Syedur Rahman
6 November 2020
5 min read
Syedur Rahman of Rahman Ravelli examines attempts to tackle disclosure problems in modern litigation.
Difficulties relating to disclosure in modern litigation have an effect on both the time taken and the costs involved.
In January 2019, the Civil Procedure Rule Committee (CPRC) approved a new Practice Direction 51(U), which set down rules for a mandatory disclosure pilot scheme (DPS) for the Business and Property Courts. Given that most documentation is now held electronically, disclosure is often one of the most expensive and time consuming stages in litigation. The pilot’s aim was to address the difficulties faced during disclosure in modern litigation – and ultimately reduce both time and costs.
The DPS was initially due to be incorporated into the Civil Procedure Rules after two years. But it has now been extended for a further year, until the end of 2021, in order to allow practitioners more time to give feedback and, hopefully, enable the pilot to meet its objectives.
Yet while the pilot was well intended, there has been some confusion over its operation. A number of proposed reforms and recent decisions aim to provide clarity regarding this.
The process under the DPS requires parties to complete very detailed documents, including the Disclosure Review Document (DRD) and the List of Issues for Disclosure. Both are intended to help narrow the scope of disclosure.
The List of Issues for Disclosure is identified as the starting point of the disclosure process. It acts as a point of reference for further discussions between the parties about the issues they aim to resolve by way of disclosure. The DRD, which follows, is aimed at identifying the types of documents to be disclosed and the manner in which they are to be disclosed.
In both McParland & Partners Ltd v Whitehead  EWHC 298 (Ch) and Lonestar Communications Corporation LLC v Kaye and others  EWHC 1890 (Comm) (Lonestar), the court agreed that issues raised in the List of Issues for Disclosure must be issues that are crystallised and pleaded in the Statements of Case - and should not go beyond in an attempt to further particularise a party’s case. The court also noted that the Issues for Disclosure should be driven by a consideration of what documents exists and what help they can be to resolving the dispute.
The DRD and List of Issues for Disclosure have not been well-received so far. Several reforms have been proposed, including:
Each party must select one out of the five models of disclosure they wish to apply to each disclosure issue. The models can be briefly summarised as follows:
Model A – Disclosure of known adverse documents only. With this model, a DRD will not be required.
Model B (limited disclosure) – This requires disclosure of documents that meet the test of Initial Disclosure, plus known adverse documents. Parties are under no obligation to undertake a search beyond any already conducted.
Model C (request-led, search-based disclosure) – This requires the disclosing party to undertake a search for particular documents or a narrow class of documents which relate to a specific disclosure issue.
Model D (narrow search-based disclosure) – This requires a party to undertake a reasonable and proportionate search for documents relevant to a disclosure issue. This may require the inclusion of narrative documents: documents that are relevant to the background or material facts of the matter but not directly a disclosure issue. The court will decide on whether narrative documents are to be included, while also limiting the scope of the search following consideration of the DRD.
Model E (wide search- based disclosure) – This model is reserved for exceptional cases and is the widest form of disclosure ordered. It stipulates that parties are obliged to disclose documents that may lead to a ‘train of enquiry’; potentially culminating in the disclosure of additional documents which are supportive of or harmful to the disclosing party’s case.
It is important to note that the parties do not have to use the same model for each disclosure issue. Using different models for different issues may be helpful, but only if it reduces the scope of work (such as by avoiding overlapping searches of the same document population.
The relationship between Model C and Model D disclosure was considered in Energy Works (Hull) Ltd v MW High Tech Projects UK Ltd and another  EWHC 1699 (TCC). The judge noted that the starting point for most disclosure issues should be Model D, subject to the parties identifying any particular issues that do not require full Model D disclosure (i.e. very limited disclosure would suffice). The claimants made Model C requests consisting of very broad categories. The court found these would amount to “fairly extensive searches” and ordered Model D, given that this would be more appropriate. This case demonstrates the importance of selecting the correct model from the outset. If Model C is agreed between the parties, the court may still refuse the request if it is “disproportionately wide”, “broadly formulated”, or would involve disclosure of a “very substantial” number of documents.
This view was reiterated in Lonestar where it was stated requests under Model C must be capable of precise description so that the disclosing party understands what must be disclosed and disclosable documents can be recognised without too much difficulty.
Several reforms have been proposed regarding disclosure models, including:
Parties must identify which of the five disclosure models they wish to apply to each disclosure issue. All the models include an on-going duty to disclose ‘known adverse documents’. An adverse document is one that could materially contradict or damage a party’s case or support the case of an opposing party. An adverse document will be ‘known’ if a party is actually aware of it without undertaking any further searches.
The judgment of Castle Water Ltd v Thames Water Utilities Ltd  EWHC 1374 (TCC) explains that a party must first undertake reasonable and proportionate checks to see if it has, or has had, known adverse documents. If this is the case, it must undertake reasonable and proportionate steps to locate them. This can become particularly complex in cases involving large volumes of documentation. It is also important to note that the relevance of the documents must be “obvious” in order for them to be categorised as a ‘known adverse document’ (Obaid v Al-Hezaimi  EWHC 1953 (Ch).
Reform proposals have included:
Some practitioners may call for the scrapping of the DPS. However, it should be emphasised that a return to disclosure under the previous rules seems unlikely, given that plenty of comments were made that what had been in place was no longer fit for purpose.
It does, however, remain to be seen whether it will be possible to address all of the difficulties that have been experienced in relation to the DPS.
Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, international arbitration, civil recovery, cryptocurrency and high-stakes commercial disputes.