Disclosure Pilot Scheme: The Inside View (Part 1)

We recently published our Disclosure Pilot Scheme (DPS) paper. As part of this work, we surveyed 250 senior lawyers to gauge their sentiment on the progress of the Disclosure Pilot Scheme and also looked at how the scheme may still need to evolve before it becomes ‘business as usual’ for law firms.

Frankly we were struck by the forthright and nuanced responses we received. The pilot scheme has unquestionably created more options for lawyers and other court users when it comes to disclosure processes. It is also heartening to see that technology and expert advice is part and parcel of completing disclosure requests quickly and efficiently.

All the same, the lawyers we surveyed highlighted some significant flaws in the pilot scheme as things stand. There is a danger that rather than making it easier for parties to agree on the right way to deal with relevant documentation, the scheme may instead be placing further barriers between parties in the crucial early stages of disputes.

There appears to be a long way to go for the scheme to win the fulsome support of the legal profession. Even so, we hope that with further simplification of the scheme’s structure and more robust guidance on best practices, the Disclosure Pilot Scheme can still benefit lawyers and their clients.

“How parties and their legal advisers approach the Pilot could elevate disclosure in the U.K.’s commercial courts to the next level. A new attitude to disclosure is needed which reconciles the inevitably adversarial nature of litigation with disclosing documentary evidence only when it is necessary for the courts to decide an important issue in the case.” Natalie Osafo, Senior Associate (Commercial Litigation), Stewarts Law

The Disclosure Pilot Scheme: A recap

The Disclosure Pilot Scheme (DPS) was introduced in 2018 by the Disclosure Working Group, in response to concerns that the existing framework for document disclosures in legal cases needed a significant overview.

The DPS has been active in the Business and Property Courts in England and Wales since January 2019. The pilot was designed to mitigate some of the “excessive costs, scale and complexity”1 experienced by parties under the previous set of standards for disclosure.

The pilot has introduced new processes and choices for legal practitioners, and other relevant stakeholders, in an effort to make the disclosure process more “proportionate and efficient,” in the words of the Disclosure Working Group (DWG).

The DPS was originally designed to run for two years, up to January 2021. In 2020, Professor Rachael Mulheron of Queen Mary University of London published a Third Interim Report,2 which recommended a 12-month extension to the duration of the pilot. As such, the pilot is presently set to run to the end of 2021.

Standard disclosure often produces large amounts of wholly irrelevant documents, leading to a considerable waste of time and costs. 

Frustration with the disclosure pilot scheme is common among practitioners, especially when litigants take tactical positions. The increased choice of models is good in principle, but this can encourage positional negotiations, with parties deliberately opening two or more models apart. However, with increased access to technology, it may be possible in time for parties to reach sensible common ground sooner, before needing to rely on judicial intervention. Dan Smith, Counsel, Latham & Watkins

The Models being piloted

The DWG suggests that the DPS gives parties a “menu of options” to choose from when scoping a disclosure process. Parties may agree on one or more models to use in a given case, with different parameters potentially appropriate for different issues. As a reminder, here are the models:

A - Limited disclosure to known adverse documents

This is the narrowest disclosure model.

B - Limited disclosure

This model includes key documents that have supported a party’s case and those which will aid other parties to understand the case against them. This does not require parties to conduct a search for relevant documents.

C - Request-led search-based disclosure

Model C is designed to give one party the ability to request the disclosure of specific documents or groups of documents (as long as requests are ‘narrow’). The nature of these searches should be defined by the Disclosure Review Document and agreed by both parties.

D - Narrow search-based disclosure

This model was previously the ‘default’ disclosure process prior to the start of the pilot scheme.

E - Wide search-based disclosure

Here, parties must disclose not only all documents directly relevant to the case but also any documents that might contribute to further inquiries and the surfacing of new evidence.

Insights from the legal profession

With several months still to run on the DPS, it is vital to gauge the impact the scheme is having on legal practitioners. Failing to understand the way it impacts the work of lawyers risks implementing procedures that only serve to compound the problems that led to the DPS in the first place. In order to better understand lawyers’ views on the DPS, we surveyed 250 senior lawyers at U.K. law firms between February and March 2021. The survey’s conclusions shed light on several key themes that will come into sharper focus as the pilot draws to a close:

·      the potential problems in incorporating more models into an already complex process;

·      the importance of incorporating technology and third-party expertise into disclosure procedures; and

·      the pilot scheme’s essential fitness for purpose as things stand

New models: pouring fuel on the fire?

The DPS offers parties a choice of models for managing disclosure requests, in contrast to the previous ‘default option’ which is now just one of five potential avenues for parties.

This choice has allowed lawyers to explore a wider range of approaches to disclosure requests. 32% of respondents reported that they used Model D (the closest equivalent to the ‘old’ process) most often. 68% of respondents, therefore, have changed their approach to engage with a disclosure model that was not previously available over the course of the scheme. Model C – request-led search-based disclosure – was the most-used option for 46% of respondents, making Models C and D by far the most frequently used forms of disclosure. 

It [the DPS] frontloads quite a lot of cost, in terms of lawyer time spent breaking down the issues and seeking to agree the disclosure approach to be taken in respect of each of them. In taking that approach, it prioritises the reduction of the number of sources and documents within the scope of the review, rather than focusing upon the use of innovative technologies designed to extract the relevant information from voluminous materials in an efficient and (where appropriate) automated fashion. Partner, Magic Circle law firm

Despite broadening lawyers’ horizons when it comes to using different models, the increased choice enabled by the DPS may create new difficulties in the cold light of day.

Litigation is by definition a contested process. In this context, finding agreement on the right disclosure model presents another decision to be made and another dispute to resolve.

When asked for their view on how often opposing parties agreed on which model to use, more than half of respondents 58% said that they agreed less than half the time. Only 7% of respondents said that they found agreement more than 75% of the time. Meanwhile, 14% of respondents said that lawyers being two models or more apart in the initial conversation was a main frustration.

As the models progress in their breadth from A to E, being two models apart represents a significant gap in expectation and understanding of the case, creating a potentially prolonged dialogue that only serves to increase complexity and cost for clients.

Additional disputes like these risk heightening, rather than mitigating, the adversarial nature of the litigation process. When asked whether the DPS has exacerbated the adversarial environment in the litigation process, 74% of respondents to our survey agreed. Whether the benefits of more flexibility in disclosure requests outweigh the negative impact of a more abrasive and confrontational litigation climate is not a question for us to answer. But our survey raises questions about the long-term impact of the pilot’s changes that may be of interest to the DWG and other relevant bodies.

Unfortunately, in my experience, the DPS has significantly driven up the costs of disclosure, thereby exacerbating the main problem which it purported to address. What is most regrettable is that, in my view, none of the changes which it introduced were even necessary, as: (1) CPR 31 already provided scope for the Court to actively manage the scope of disclosure (rather than simply to order standard disclosure); and (2) technology assisted review already provided an effective solution to delivering disclosure at proportionate cost in cases involving substantial volumes of potentially disclosable data. Ben Sigler, Partner, Stephenson Harwood

In part 2 of this DPS series, we will talk about the importance of technology in disclosure so stay tuned for more.. If you can’t wait though, read our full paper: https://www.alvarezandmarsal.com/insights/disclosure-pilot-scheme-inside-view