The Disclosure Pilot Scheme (the “DPS”) has been in force since 1 January 2019. Angela Milner (Senior Associate, Knowledge Development Lawyer) examines the key case law and guidance emerging from the courts and (in some instances) from the Disclosure Working Group (the “DWG”) itself.

Scope of the DPS

The first issue that has been ironed out is whether the scheme applies to cases in which proceedings were commenced in the Business and Property Courts prior to 1 January 2019. In the case of UTB v Sheffield United Ltd & Ors [2019] EWHC 914, the court made it clear that where a case is currently “subsisting” in the Business and Property Courts, the DPS will apply to any new orders for disclosure that need to be made. Parties who were hoping to avoid grappling with the contents of Practice Direction 51U (“PD 51U”) because proceedings were instigated prior to 1 January 2019 have, therefore, had to get up to speed with its contents quickly.

Failure to comply with an order for extended disclosure and applications to vary an existing order/make an additional order for disclosure of specific documents

Another issue on which the court has attempted to shed light is the extent to which there are differences between the tests in PD 51U paragraph 17.1 (failure to comply with an order for extended disclosure) and PD 51U paragraph 18.1 (application to vary an existing order/make an additional order for disclosure of specific documents).

In Ventra Investments Limited v Bank of Scotland [2019] EWHC 2058 (Comm), the court confirmed that the difference in approach under the two provisions in PD 51U was, at most, “a difference in emphasis”. On the facts of the case, whatever provision the application was made under made no difference in practice. Both provisions required the court to satisfy itself that making the order was “reasonable and proportionate”.

However, this is somewhat at odds with the comments in the more recent case of Agents Mutual Limited v Gascoigne Halman Limited T/A Gascoigne Halman, Connells Limited [2019] EWHC 3104 (Ch), where the court noted it is “unsurprisingly… harder to obtain” an order under PD 51U paragraph 18, which was a “higher test”. The differences between these tests is, therefore, an area on which further guidance is needed.

PD 51U paragraph 18 has received further consideration in the case of Vannin Capital PCC v RBOS Shareholders Action Group and Others [2019] EWHC 1617 (Ch), where the court made it clear that this provision contains its own standalone test for whether an order should be varied. Case law concerning the court’s jurisdiction to vary or revoke an order under CPR 3.1(7) is, therefore, irrelevant.

The spirit of the DPS

The court has also sought to remind parties, on numerous occasions, that the “spirit of the disclosure pilot scheme… requires the parties to cooperate so as to promote the reliable, efficient and cost-effective conduct of disclosure” (para 4, Vannin Capital PCC v RBOS Shareholders Action Group and Others [2019] EWHC 1617 (Ch)). This emphasis on cooperation has been stressed not only by members of the judiciary but by the DWG, which has relayed concerns that parties are not being cooperative enough.

This feedback has led to speculation in the industry that the courts may, in the near future, take a tougher approach to sanctions when it considers parties have not cooperated as much as they could (or should) have.

Approach taken by the courts

The courts have adopted a robust stance when applying PD 51U (no doubt spurred on by the emphasis in the rules on necessity and proportionality). Thus, in the case of Astellas Pharma Inc and Others v Glaxosmithkline UK Ltd and Others [2019] EWHC 1943 (Pat), the court declined to order disclosure in a patent dispute where the disclosure (i) was for results of experiments relating to “off target effects”, irrespective of “how trivial” such effects were and (ii) the disclosure did not go to a pleaded issue. The court stressed that “disclosure should be limited to what is necessary in order for the court to resolve clearly defined issues”. It will not be ordered unless it is “properly and substantively relevant to an issue in the action”.

Further, as was made clear in Marck Sharp and Dohme Limited v Wyeth LLC [2019] EWHC 1692, the court will only order disclosure where it is “likely to result in documents being disclosed which are probative of one party’s case or the other” and where it leads to a “proportionate search” being carried out.

Disclosure Guidance Hearings

An area where a considerable steer has been given is Disclosure Guidance Hearings (“DGHs”). The judiciary expressly encouraged the use of these in Vannin Capital PCC v RBOS shareholders Action Group and Others [2019] EWHC 1617 (referred to above).

One of the issues in this case was whether the documents sought by one of the parties fell within the scope of a particular disclosure order. The court made it clear that (i) where the parties had explored their different positions “amply” in interpartes correspondence and (ii) where the issues were not capable of resolution without input from the court, this was “just the sort of situation where guidance could have been sought from the court”. Had the parties done this, they may well have been able to avoid having to make lengthy skeleton arguments and detailed submissions.

The DWG, like the courts, has also sought to encourage parties to ask for DGHs if the parties consider this would be helpful. Interestingly, it has been suggested by some that the 30-minute time limit specified in PD 51U paragraph 11 is not necessarily set in stone. It may, therefore, be open to parties who wish to have a DGH and who need (for example) 45 minutes to an hour to write to the court setting out the background to the request for a longer hearing and to await a response. Although there are no guarantees, parties may find that their request is granted.

Known adverse documents

An issue that has caused considerable concern is when “known adverse documents” (“KADs”) need to be disclosed. The DWG had previously clarified that they do not have to be disclosed with initial disclosure. However, although it was then apparent when they did not have to be disclosed, there remained a lack of clarity as to when KADs did need to be disclosed. The reference points stipulated in PD 51U paragraphs 9.1 and 9.2 are clear. What is less clear is whether KADs need to be disclosed before those dates (as suggested by the wording “known adverse documents not already disclosed”).

However, it has since been explained that there is no obligation to disclose KADs before the times specified in PD 51U paragraphs 9.1 and 9.2. For practical purposes, this means that for a party giving initial disclosure or model A extended disclosure only, KADs should be disclosed within 60 days from the first Case Management Conference. For parties giving extended disclosure where models B, C, D or E are being used, KADs need to be disclosed at the same time as the rest of the extended disclosure (and not before this date).

Feedback on the DPS

The DWG has recently sought feedback from practitioners as to how the DPS is working in practice. It had made it clear that it is keen to understand what areas have proved to be tricky/lack clarity. It is hoped that the DWG will provide a summary of the feedback (ideally with responses to points raised) early this year.

Early indications from the DWG are that the DPS is likely to be extended beyond the two-year period initially envisaged and so, to the extent that additional clarity can be provided, this will no doubt be received positively.