Johnny Shearman, Head of Knowledge and Legal Services, examines his top 3 decisions from 2020 that dealt with the Disclosure Pilot Scheme and looks to 2021 as a pivotal year for the the Pilot.
The disclosure pilot scheme, which began in 2019, was designed to trial a new approach to disclosure in the business and property courts. At the time, it was thought that a fundamentally new approach was necessary in order to significantly reduce the cost associated with the disclosure process as set out in Part 31 of the Civil Procedure Rules. What was originally a two-year pilot scheme has now been extended to the end of 2021.
The experience gained in practice as the trial progresses is being used to refine the pilot disclosure scheme, which is set out in Practice Direction 51U (PD51U). These ongoing revisions will ultimately help to finalise the shape of a new and more effective disclosure process. Judicial decisions relating to disclosure pilot scheme are influential in helping to inform the ongoing development of the scheme, while also providing practitioners with greater clarity.
During 2020, a number of important judgments analysed the workings of the pilot disclosure scheme in practice. The case of AAH Pharmaceuticals Ltd v Jhoots Healthcare Ltd involved an application to vary an order for extended disclosure. The court refused to decide whether the order should be varied. Instead, the judge informed the parties of the guidance that would have been offered had a Disclosure Guidance Hearing been sought. This decision makes clear the importance of using Disclosure Guidance Hearings to help clarify any issues that arise.
In the case of Castle Water Ltd v Thames Water Utilities, the court helpfully clarified that parties are required to undertake reasonable and proportionate checks for known adverse documents. The judgment noted that “the requirement to disclose known adverse documents would be emasculated if there was no obligation at all to look for adverse documents of which the party is aware”. Paragraph 3.4 PD51U states that “where there is a known adverse document but it has not been located, the duty to disclose the document is met by that fact being disclosed, subject to any further order that the court may make.” To take an example cited by counsel during argument, it would be absurd if a party were able to say ‘I know I have an adverse document, but I don’t know whether it is in the left-hand drawer or the right. I have therefore not located it.’ This is an analogy worth bearing in mind during any disclosure process.
The High Court case of McParland & Partners Ltd v Whitehead was perhaps the most significant decision of 2020 in terms of providing overall guidance as to the best approach to disclosure under the disclosure pilot scheme. The judgment of Sir Geoffrey Vos once again helped to set all parties on the right course in terms of interpreting the scheme. The judgment gives important guidance on Issues for Disclosure, Models and cooperation required between parties. This judgment is a must-read for any practitioners carrying out disclosure under the pilot scheme.
On the very last day of 2020, the High Court also ordered the disclosure of documents in a £650m tax dispute. In the case of HMRC v IGE USA Investments, Deputy High Court Judge James Pickering QC held that the court could order disclosure under paragraph 18.1 PD51U (amounting to what is commonly referred to as specific disclosure), even in the absence of a List of Issues for Disclosure. It is sufficient that there has been an order for Extended Disclosure and as to the issues the court held that “It is not necessary for the issue to be identifiable on the face of the statements of case – instead, it is enough for that issue to be something which will need to be determined by the court in order for there to be a fair resolution of the proceedings as a whole.”
This coming year marks the third and supposed final year of the disclosure pilot scheme. It is therefore a pivotal year for the scheme, as the judiciary continues to clarify important issues whilst the scheme continues to evolve through impending revisions to PD51U.