Disclosure in large English litigation: 1 of 2 - Groundhog Day?

“If you always do what you’ve always done...”[1]

Writing recently on complexity and complication in legal projects, I commented that

“The common law discovery culture is a particular sources of complexity and expense when inconvenient facts come to light and have to be considered. Lawyers in non-common law systems do, of course, sometimes regard this culture as part of an out-of-control legal process – ‘fiat justitia, ruat coelum.’”

The day before, the English judiciary announced a two year pilot (starting April 2018) of a reformed approach to "disclosure", the post-1999 local re-branding of "discovery", i.e. enforced disclosure of records (digital as well as paper) to an opponent in litigation.

This post and its sequel offer some thoughts about those proposals.

  1. The uncontroversial starting point is that disclosure in English litigation often takes a huge amount of time, and therefore money, to deal with. As well as the direct spend, it can be a huge distraction for litigants.
  2. This cost is regarded by many people as often out of proportion to its value - which in this context means the effect on case outcomes.
  3. Over the last couple of decades, some improvements have occurred  at the coalface, i.e. in the processes and technology used to review records.
  4. However, judicial attempts, made with the best of intentions to change English litigation culture by limiting disclosure in large cases have, by their own lights, failed.
  5. Reading the latest proposals, I can't see a clear plan for changing that. The risk of Groundhog Day therefore seems serious.
  6. I have some suggestions for how to avoid that fate, drawing on the notion of a Lean Start-up.

Background

To summarise my own perspective on this topic –

I qualified as a lawyer in 1997, working in a litigation practice in London, focusing on large commercial cases. I did a few discovery exercises and applications under the old rules and saw something of the pain, even though I was being paid rather than paying. Down in the junior lawyer trenches, Lord Woolf’s promise of change (his reforms came into effect in early 1999 and were much discussed in the preceding years) sounded beguiling.

In 1999 and 2000, I didn’t notice much practical difference – more senior lawyers always seemed able to satisfy themselves, their clients, each other and judges that the case in hand required a fairly thorough approach to disclosure.

After attending a few case management conferences, it also seemed to be the case that the judicial workload was too heavy to allow anything more than a basic engagement with the issues, with the tendency being to err on the side of more disclosure.

In 2001, I went to work in litigation for my firm’s Hong Kong office. The discovery rule in force there was the old, pre-1999 English one, so in theory the approach might have been expected to be more expansive than the post-1999 approach in England. In practice, however, everyone seemed to take it all a bit less seriously. Judicial grumpiness seemed more likely to involve complaints of over- rather than under-production, though the reaction varied quite a bit from judge to judge.

Over the years, as I became involved in handling disputes in a variety of court and arbitration systems, the conclusion was reinforced that, to adapt Drucker, culture eats rules for breakfast. So far, so banal.

In 2010/11, I was involved in initiating and planning one of the coalface operations mentioned in point 3 at the start of this post. This took the prevailing culture as its starting point but sought to improve the implementation of the decisions emanating from that culture.

For the last few years, I've not been engaged in legal practice but have retained an interest in the topic of out-of-control legal processes, while gaining a different perspective. This piece is intended to contribute something from this perspective to the ongoing debate of what to do about disclosure.

If unfamiliar with what’s happened in the field in England since the 1990s, the historical summary contained in this post may be useful.

If you know that history already, skip to the next post.

Pre-history (up to 1999)

Prior to 1999, the long-established rule in English litigation was that parties to litigation were supposed to disclose documents which “related” to an issue in the case. Judicial interpretation of that phrase was broad,[2] making it onerous to comply with: increasingly so as the generation and reproduction of documents became cheaper throughout the twentieth century. In large organisations, the practical problem arose of how to find out what you had and whether it “related” to relevant issues, leading in practice to extensive, expensive activity.

In the mid 1990s, Lord Woolf, a senior judge, and before that a barrister, ran a consultation process into access for justice. He identified expense and delay as the “twin scourges”.

He identified the old discovery rule as a significant part of the problem.

In tackling it, he divided the world of potentially relevant documents into four parts (quoting from his 1996 final report):

(1) the parties' own documents, which they rely upon…
(2) adverse documents of which a party is aware and which to a material extent adversely affect his own case or support another party's case;
(3) documents which... are part of the 'story' or background, including documents which, though relevant, may not be necessary for the fair disposal of the case;
(4) ... documents which may lead to a train of inquiry enabling a party to advance his own case or damage that of his opponent.

Lord Woolf recommended in 1996 that initial disclosure be limited to categories (1) and (2) – “standard disclosure” - with any extra disclosure requiring a court order. His proposal was that “When ordering extra disclosure, the court would have to be satisfied not only that it was necessary to do justice but that the cost of such disclosure would not be disproportionate to the benefit and that a party's ability to continue the litigation would not be impaired by an order for specific disclosure against him.”

Lord Woolf acknowledged that his attempt to limit category (2) by a concept of “awareness” would raise some scope for argument (e.g. which individuals' awareness was to be attributed to a company?). However, he considered that it was a workable compromise and that an absence of perfection should not be allowed to prevent progress. 

Lord Woolf also emphasised the need for culture change.[3] His suggestions for achieving this were to ask lawyers to cooperate and, more importantly, to ask judges to manage cases more actively, with proportionality in mind.

At the time, the most prominent published critiques of the Woolf reforms, at least as I recall, were those of Michael Zander, who rejected the idea of judicial case management as unrealistic.[4] Another critical voice was that of Adrian Zuckerman, arguing that too little attention was being given to the incentives for lawyers, resulting in excessive cost.[5] He also noted that discovery had been identified as a cause of excessive costs many decades before – this was not a new problem.[6]

Post-1999

Importantly, the definition of “standard disclosure” implemented in 1999 was very different from Lord Woolf’s 1996 idea.

Rather than limiting standard disclosure to adverse documents of which a party was aware, standard disclosure was defined in a way that required parties to make reasonable searches for documents which adversely affected their own case or which supported or adversely affected another party's case.

That’s a huge difference in practice.

After a few years, it was clear that the 1999 reforms had failed to reduce costs  of disclosure, particularly in large cases, that the old culture was really hard to shift, and that the explosion of electronic material was creating ever more pressure in the disclosure context.

Since then, there has been a lot of private sector initiative to reduce disclosure costs in large complex cases, with improved technology and specialist document review services, both outside and within law firms.

However, the courts’ and lawyers' approach to seeking and ordering disclosure hasn't changed much. Standard disclosure became, well, very much the standard order. A 2013 law firm publication spells out the realities:[7]

"The universe of documents still needed to be searched and reviewed, and it is at least arguable that a review to determine which documents fall within the narrower "standard disclosure" test is more time consuming and requires more thought (and possibly a more senior level of reviewer) than a review to determine which documents are broadly relevant. There was also the natural fear that if a party took a narrow approach to disclosure, it might be faced with specific disclosure applications and/or judicial criticism, as well as the risk of having to repeat the exercise if the issues changed to some degree. So in practice, parties often continued to disclose a broader category of documents than might strictly be required under the definition of standard disclosure…. Lord Justice Jackson... considered a wide range of options, including (most dramatically) doing away with broad disclosure in favour of an approach similar to that often adopted in international arbitration, where the parties disclose the documents on which they rely, with the possibility of seeking specific disclosure of further documents. There was however a lot of resistance to that idea. It is well ingrained amongst English lawyers that the best way to achieve justice between the parties is for the court to have the full facts, which (it is thought) can only come from a broad disclosure regime. It is also said that the 'thorough and probing' disclosure process, to use Lord Justice Jackson's words, is one of [the] factors that attracts international commercial disputes to London. In the end Lord Justice Jackson's recommendation, for larger cases, was to replace the presumption in favour of standard disclosure with a “menu” of disclosure options."

As a further illustration of the tactical possibilities which exist within the disclosure culture, see this 2005 publication by a lawyer on "tactics for disclosure and requests for information". It doesn't need much imagination to see what an effective litigator can achieve within such a regime.

Enter Lord Justice Jackson

Skipping over some low-impact refinements of the disclosure process in the decade after 1999, the next major event was Lord Justice Jackson's appointment at the end of 2008 to look at ways of reducing costs in litigation.

His was a very wide-ranging review, not just focused on disclosure or large cases. However, his report, a year later, included the recommendation [8] that, in substantial cases,[9] a menu of options should apply, without any presumption as to which one would be suitable in a particular case.

His hope was that more rigorous case management would lead to better choices being made, applying the concept of proportionality in a fact-sensitive way.

The menu offered five approaches -

“(a) ...dispensing with disclosure;
(b) ... a party disclose[s] the documents on which it relies, and at the same time requests any specific disclosure it requires from any other party;
(c) ...[disclosure specified] on an issue by issue basis...
(d) ... standard disclosure;
(e) [old school “train of enquiry” disclosure]"   

"None of the above" (an off-menu order) was also provided for.

New rules to this effect were introduced in 2013. Lord Justice Jackson's hope was that parties would choose thoughtfully rather than just going for "standard disclosure as the default option.”[10]

In October 2016, he stated that getting to grips was disclosure was one of the keys to controlling costs but that his hope had been disappointed:

"In large commercial actions and other substantial cases too often people are treating standard disclosure as the default option. Parties frequently agree standard disclosure, seemingly without considering whether other options may be preferable, and the courts accept their agreements. It would be to the public benefit if all involved in the disclosure process gave more attention to the full range of options before simply proposing or agreeing to ‘standard disclosure'".

He also commented upon the establishment of the disclosure working group which had been established earlier in 2016 and has now published its November 2017 proposals:

“The disclosure working group may care to consider whether what is needed is culture change rather than rule change. In particular, (dare I say it?) perhaps the working group might encourage:
  • practitioners to think twice before agreeing standard disclosure (however profitable that may be for the lawyers), and
  • judges to be more proactive, by pressing counsel as to what documents are needed and why, rather than approving any agreed directions for standard disclosure.
If by any chance the working group report is along these lines, it would certainly chime with the sentiments expressed at the GC100 April 2016 disclosure seminar, but this is entirely a matter for them.”[12]

The November 2017 proposals

The November 2017 proposals have been published as four PDFs: a short press announcement, a fuller guidance note, a 20 page draft practice direction and a draft form. 

The working group comprised five judges, seven law firm representatives, five barristers, two civil servants, representatives of the legal departments of two leading UK corporates and Prof Susskind. The proposed pilot applies to the Business and Property Courts, i.e. “the new name for England and Wales’ international dispute resolution jurisdictions.” [13]

The working group recognise the cultural problem:[14]

“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.”

Unlike Lord Justice Jackson, however, they consider that rule change is also necessary:

“a wholesale cultural change... 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 idea is to do a two year pilot, from April 2018. The stated aim is to address concerns expressed by court users, noting in particular the views expressed by large London-listed companies (represented by the GC100 group) about “the excessive costs, scale and complexity of disclosure.”

In addition to the aim of affording such "litigants the certainty of a cost proportionate means of dispute resolution" the objective is also expressed of “bring[ing] out the strengths of English law and English dispute resolution in international markets.”[15] This is part of broader efforts to ensure that London remains, in the recent words of a senior judge, “a good forum to shop in” post-Brexit.[16]

The intended "best of both worlds" USP is captured by the working group's wish to provide for two things which obviously pull in different directions:

  1. “The ability to obtain an order for a party to disclose documents that are adverse to its claim helps to make litigation in this jurisdiction attractive.”
  2. “Having effective and proportionate rules for disclosure is a key attraction of English law and English dispute resolution in international markets.”

However, there are credible competitors seeking to occupy a similar sweet spot, albeit with a more restrained approach to disclosure: arbitration is the most important in terms of market share[17] but the SICC is a judicial experiment which has been marketed as offering an arbitration-like experience.[18]

The heart[19] of the working group's proposed new approach is as follows.

  1. A new duty is imposed to disclose "regardless of any order for disclosure made, documents [a party] knows to be or to have been in its control and adverse to its case on the claim, unless they are privileged."[20] This is reminiscent of Lord Woolf's original 1996, unimplemented, concept of standard disclosure.
  2. Another duty is imposed "to refrain from providing documents to another party that have no relevance to the Issues for Disclosure in the claim."[21]
  3. A party is ordinarily expected to give "Basic Disclosure" - defined as the "key documents" it relies on (expressly or otherwise) in support of its case.[22]
  4. Parties wishing to depart from this basic approach are required to apply to Court for an order for "Extended Disclosure."
  5. A menu of five types of Extended Disclosure orders is available, similar to Lord Justice Jackson's menu (though B is new, and C combines two of the Jackson options) . In gist these are as follows - only C, D and E are really "extensions":[23]

A. No disclosure on some / all issues in the case (except that the duty to disclose known adverse documents (above) will remain).

B. An order (in essence) to enforce Basic Disclosure.

C. An order to disclose "particular documents or narrow classes of documents" relating to particular issues, i.e. an arbitration-style approach or to use the old litigation terminology, specific discovery.

D. An order for (in essence) standard disclosure - though that name is no longer to be used - subject to any restrictions which the court may impose.

E. Old-school "train of enquiry" disclosure - though the practice direction states that this is only to be ordered in an exceptional case.

In effect, therefore, the default position has been rolled back to something similar to Lord Woolf's 1996 idea with the onus being placed on the parties to ask for more.

That seems a reasonable starting point but it's also easy to foresee that most cases in which factual nuances are of any conceivable importance are likely to involve an application for Extended Disclosure, with the big question then being whether the courts will expect the party seeking disclosure to articulate and justify each item (model C) or whether it will be left to each party to conduct reasonable searches for documents relevant to all issues, assessing and filtering out documents of "no relevance" as it does so (model D). 

Hopes and fears

The GC100 group's representatives' public statement on this is as follows, emphasis added:

"The GC100 members are delighted that the Working Group has taken the task of revising the disclosure rules so seriously and with a much more radical attitude than many were expecting. If, collectively, we can get behaviours to change too (the difficult bit) then this initiative will be enormously valuable for the future."

Some scepticism has already been expressed. One very experienced litigator observes:

"The problem with more refined disclosure – such as disclosure by issue –  is that it requires a lot more senior lawyer input, which can add to costs rather than reduce them.  It is a good thing that there is to be a pilot so that the risk of unintended consequences can be evaluated."[24]

Another highly experienced person's initial observation echoes Lord Justice Jackson's point:

"My own recurring themes are encapsulated in the blunt expression “RTFR” (“Read the F…. Rules”), in the need to be informed enough to articulate a proportionate plan to opponents and the court, and in the often overlooked CPR 3.1(2)(m) which permits the court to “take any other step or make any other order for the purpose of managing the case and furthering the overriding objective”. If the court can make any order, then you can seek any order not expressly prohibited elsewhere in the rules.
Those principles will remain true. Whatever else comes out of the changes, perhaps some judges, as well as lawyers, will now RTFR. If that had been done hitherto, we would have no need now for rule changes."

Part 2 discusses what might be done to avoid déjà vu.

Endnotes

[1] https://quoteinvestigator.com/2017/03/23/same/

[2] For example, “relating” was interpreted as including not only items of direct relevance to issues but also things which might lead to a “train of enquiry” resulting in the uncovering of relevant information. The obligation also applied (and applies) to documents held by a third party but to which the litigant has rights.

[3] For some examples from the mid-to-late 1990s, search for the word “culture” in this 2001 “early evaluation” of the impact of the Woolf reforms:   http://webarchive.nationalarchives.gov.uk/+/http://www.dca.gov.uk/civil/emerge/emerge.htm 

[4] See e.g. this 1997 summary of a Zander speech: https://www.thelawyer.com/issues/28-april-1997/zander-slams-woolf/  See also this piece from 2009: https://www.newlawjournal.co.uk/content/zander-woolf

[5] http://adrianzuckerman.co.uk/files/File/woolfmlr-jen.dr2.pdf

[6] See footnote 43 of the above article by Prof Zuckerman.

[7] https://hsfnotes.com/litigation/jackson-reforms/disclosure/  This summary was prepared by my old firm, but I had nothing to do with it.

[8] See chapter 37 of https://www.judiciary.gov.uk/wp-content/uploads/JCO/Documents/Reports/jackson-final-report-140110.pdf

[9] Defined by reference to quite a low threshold - £1 million or more at issue, with possibility for other cases to be classified as substantial as well.

[10] Lord Justice Jackson’s summary at page 21, paragraph 2.4 of his July 2017 report on litigation costs: https://www.judiciary.gov.uk/wp-content/uploads/2017/07/fixed-recoverable-costs-supplemental-report-online-3.pdf

[11] July 2017 report, page 25, paragraph 3.3.

[12] https://www.judiciary.gov.uk/wp-content/uploads/2016/10/lj-jackson-speech-disclosure-10102016.pdf

[13] Announcement of the B&PC: https://www.judiciary.gov.uk/announcements/business-and-property-courts-media-release/

[14] https://www.judiciary.gov.uk/wp-content/uploads/2017/11/dwg-guidance-note-2-nov-2017.pdf

[15] Briefing note, para 4.

[16] See the speech (not about disclosure) by Lord Justice Gross on 1 November 2017 entitled “A good forum to shop in: London and English law post-Brexit”: https://www.judiciary.gov.uk/wp-content/uploads/2017/11/gross-lj-omay-maritime-law-lecture-20171102.pdf

[17] Practice on document production varies in international arbitration but googling the 2010 IBA rules on the taking of evidence in arbitration will give an idea of the balance sought to be struck.

[18] http://www.singaporelaw.sg/sglaw/singapore-legal-system/2013-01-28-11-14-34/supreme-court-2

[19] The documentation also contain much development of themes reminiscent of the Woolf reforms of 20 years ago: duties to cooperate and estimate cost, some more detailed requirements on various aspects of this, a new form and an emphasis on the court’s responsibility to take a proactive role. The use of TAR in larger cases is also encouraged. However, this seems essentially to be tinkering with the current system.

[20] Draft Practice Direction, paragraph 3.1(2).

[21] Ibid, paragraph 3.1(6).

[22] Ibid, paragraph 5.

[23] Ibid, paragraph 6.

[24] Ted Greeno of Quinn Emanuel, quoted in https://www.legalbusiness.co.uk/blogs/reforms-attempt-to-curb-rolls-royce-disclosure-as-litigation-costs-spiral-upwards/ 

Graeme Johnston