PLA Response to Disclosure Pilot in the Business and Property Court

 

27 February 2018

 

RESPONSE TO DISCLOSURE PILOT FOR THE BUSINESS AND PROPERTY COURT

 

The Property Litigation Association is an industry association for solicitors with a substantial part of their  practice  in  property  litigation.   The  Association  has  around  1300  members  comprising solicitors from throughout England and Wales (and elsewhere in the United Kingdom) specialising in all aspects of property litigation including commercial, residential and agricultural property law.

 

This response has been prepared by members of the Association’s Law Reform Committee – Peter Bourke, Matthew Ditchburn (Chairman), Bryan Johnston and Stuart Wortley.

 

Please direct any questions concerning this response to Stuart Wortley (0771 288 1393).

 

 

  1. We recognise that a great deal of work has been invested in this project and wish to formally add our own thanks to Lady Justice Gloster, the members of the Disclosure Working Group (“DWG”) and the firms / in house teams which participated in the road-testing exercise for their respective contribution

 

  1. In property related litigation, standard disclosure rarely generates volumes of documents which are so large that (a) the documents are difficult to manage; or (b) the cost of disclosure is disproportionate to the value of the clai Accordingly, for our members the current rules (typically providing for standard disclosure supplemented as necessary by applications for specific disclosure) work reasonably well.   Our membership encounters relatively few complaints about the burden and / or cost of disclosure.

 

  1. At the same time, we recognise and agree with the criticisms which the DWG has made of the current rules in the context of those types of litigation which pursuant to the current rules generate very large volumes of documents.

 

  1. We also agree with the decision to draft an entirely new rule and the principles which have guided the core elements of the drafting:-

 

4.1    imposing express duties on the parties and their representatives concerning disclosure (PD 3) including a duty to disclose adverse documents (irrespective of any order for Extended Disclosure) (PD 3.1(2));

 

4.2    a  flexible  “issues-based”  approach  in  which  the  onus  is  on  each  party  seeking Extended Disclosure to justify the order which they seek having regard to overarching principles which reflect the Overriding Objective (PD 6 and 9);

 

4.3    prescribing alternative but flexible disclosure models (PD 8);

 

4.4    requiring parties to litigation (and their advisers):-

 

4.4.1   to consider disclosure from an early stage;

 

4.4.2   to exchange positions and information in the DRD prior to the CMC; and

 

4.4.3   to co-operate with each other …

 

… so that the Court is able to make well informed decisions about disclosure at the first

CMC) (PD 7 and 10); and

 

4.5    acknowledging that in many cases, the probative value of “Narrative Documents” is

insufficient to justify the cost of having to disclose them.

 

A.  BASIC DISCLOSURE

 

  1. We agree with the comment which Chief Master Marsh made at the panel discussion hosted

by the London Solicitors Litigation Association at Simmons & Simmons’ offices on 16 January

2018 to the effect that “Initial Disclosure” might be a more appropriate term for this stage of

the process.

 

B. LIST OF ISSUES FOR DISCLOSURE

 

  1. Whilst we recognise that some issues will require Extended Disclosure and others will not, we wonder whether in the interests of avoiding duplication of lists it might be simpler to require that ALL issues be identified at an early stage.

 

  1. Given that Model A would apply to any issues which do not require disclosure, the additional effort involved in  identifying  all  issues (as opposed  to only those in respect  of which Extended  Disclosure is or  may be  appropriate) does not  strike  us as unduly onerou Indeed, it seems to us that having a complete list of ALL issues at the CMC might be a positive advantage (albeit something which technically falls outside the remit of the DWG).

 

  1. Subject to that point, where there is a disagreement about the draft List of Issues for Disclosure there is no specific provision which requires the Court to reach a determination concerning the List of Issues for Disclosure (it may be that this is not considered necessary).

 

C. EXTENDED DISCLOSURE – PROCEDURE

 

  1. We have noticed that some of the Disclosure Review Document (“DRD”) guidance notes are inconsistent with the Practice Direction (see the table below). Whilst these inconsistencies could be addressed, we wonder whether a better approach may be to remove most of the guidance notes from the DRD altogether and instead for the DRD to cross-reference the Practice Direction.

 

Practice Direction Disclosure Review

Document

Stage 1 Each party must state whether it is likely  to  request  Extended Disclosure  (and  that  steps  have been taken to preserve relevant documents) “When serving a statement of case …” (PD 7.1 and PD 4.5) N/A
Stage 2 Claimant must complete section 1A (draft List of Issues for Disclosure) and propose disclosure model for each issue … within 21 days of the time limited for service of a Reply …” (PD 7.2) … within 21 days of the filing and service of the Defence …” (paras 1 + 2 of S1A)
Stage 3 The other parties must raise any issues with the draft List of Issues for Disclosure … within 14 days after service of the draft List of Issues for Disclosure.”

(PD 7.4)

… as soon as reasonably practicable after the Claimant has served a completed draft of Section 1A.”

(para 5 of S1A)

Stage 4 All parties must discuss and seek to agree the draft List of Issues for Disclosure and other parties must propose  disclosure  model  for each issue / requests which might be made for Model C In advance of the

first CMC …”

(PD 7.5)

No express timetable

(para 7 of S1A)

Stage 5 Claimant   must   update   and   re- circulate Section 1A Following such discussions …” (para 11 of S1A)

 

 

Stage 6 Any  party  seeking  Model  C disclosure must complete section 1B (details  of  proposed  search requests) … as soon as reasonably practicable after completion of Section 1A of the Disclosure Review Document and in any event not less than 28 days before

the date fixed for the

CMC.

(PD 10.3)

… as soon as reasonably practicable and, in any event, not less than 28 days before the date fixed for the CMC.”

(para 1 of S1B)

Stage 7 All parties must complete section 2 (providing information about their own documents and costs estimates for disclosure)

 

[ Presumably it is intended that the obligation to complete section 2 only applies to parties who are proposing to give Model C, D or E disclosure (or against whom such disclosure is sought) ? ]

… as soon as reasonably practicable and in any event not less than 14 days before the CMC.”

(PD 10.6)

… as soon as reasonably practicable and in any event not less than 28 days before

the date fixed for the

CMC.

(paras 1 + 8 of S2)

 

“ … even if the request for Extended Disclosure or the relevant Issue for Disclosure is disputed.”

(preamble to

Questionnaire)

[ Until Stages 6 and 7 there will be only one DRD in circulation. However, from Stages 6 and 7 onwards, there will generally be one DRD for each party. ]

 

[ We are unsure whether it is intended that the Defendant’s copies of the DRD will include identical information in Section

1A or whether this will be left blank. ]

Stage 8 Any party against whom Model C disclosure is sought must respond to the requests in Section 1B …    as    soon    as reasonably practicable   and,   in any  event,  at  least

14  days  before  the

CMC …”

(PD 10.4)

No express timetable

(para 4 of S1B)

Stage 9 Parties must discuss Section 2 … in advance of the CMC.   Those issues that  cannot  be agreed must be recorded in a summary form in those sections to be completed after discussions between the parties”

(para 5 of S2)

Stage 10 DRD  with  completed  Section  1B

must be served on all parties

… not less than 14 days  before  the CMC”

(para 5 of S1B)

 

 

 

Stage 11 Parties must attempt to resolve any disputes before the CMC Continuing obligation

(PD 10.2 + 10.7)

Continuing obligation

(para 7 of S1A; para

6 of S1B and para 5 of S2)

Stage 12 Parties must file at court and serve on all other parties updated versions of the DRD Not   less   than   7

days before the CMC

(para 13 of S2)

 

  1. To ensure that sufficient time is available to completer each of these stages, we suspect that the listing of the first CMC will need to be delayed (compared with current practice).

 

  1. It may be appropriate to reduce the number of separate stages (and we recognise that this is probably what would happen in practice) by combining the following stages:-

 

  •           6 and 7
  •           8, 9 and 11
  •           10 and 12
  1.  It may also be helpful to produce a flow chart to show the progression of these stages diagrammatically.

 

D. DISCLOSURE REVIEW DOCUMENT

 

  1. As noted in the table above after Stages 6 and 7, whereas there will only be one draft List of Issues for Disclosure (Section 1A) in each case, each party will need to produce their own DRD where:-

 

EITHER

 

13.1  that party seeks Model C disclosure from another party in relation to one or more Issues for Disclosure – since they will then need to complete Section 1B providing details of their disclosure requests;

 

OR

 

13.2  that party offers Model C, D or E disclosure in relation to one or more Issues for Disclosure (or another party seeks such disclosure from that party) – since they will then need to complete Section 2 providing details of the documents which they hold. Where the order for Extended Disclosure is limited to Model B, it seems to us that there would be no need to complete Section 2.

 

  1. Whereas the Claimant must complete section 1A for each Issue for Disclosure (and each party which is required to complete Section 1B must do so for each Issue for Disclosure for which Model C disclosure is sought), the DRD only provides for a single composite Section 2 for ALL Issues for Disclosure. We suspect that in more complex cases, Section 2 may have to be completed for each Issue for Disclosure too.

 

E. MODEL C DISCLOSURE

 

  1.  Whilst we understand that Model C will frequently be the most appropriate model for Extended Disclosure, there are several categories of landlord and tenant / property litigation to which Model C is not well suited. These are cases in which the party seeking Extended Disclosure is unable to identify specific documents (or narrow classes of documents) which may be in the control of the other party simply because they lack sufficient information to frame the request

 

  1. Examples of such cases include the following:-

 

16.1  opposed lease renewal proceedings pursuant to the Landlord and Tenant Act 1954 in

which the tenant challenges the landlord’s claimed intention:-

 

16.1.1 to redevelop the relevant premises – ground s 30(1)(f); or

 

16.1.2 to occupy the relevant premises – ground s 30(1)(g);

 

16.2  proceedings  involving  allegations  that  a  party  has  /  has  not  complied  with  an obligation to use reasonable / best endeavours; and

 

16.3  proceedings involving allegations of rectification, mistake or estoppel.

 

  1. In cases of this sort, it may well be necessary for the party seeking Extended Disclosure to request Model D or E with Narrative Document

 

F. ADVERSE DOCUMENTS

 

  1. We note the duty in PD 3.1(2) to disclose “… documents it knows to be or to have been in its

control and adverse to its case on the claim …”.

 

  1. We question the value of the words “… on the claim …”. Given that the principle logically extends beyond documents which are adverse to an issue on the claim to those which are adverse to an issue on the defence, counterclaim, reply, part 20 claim etc we suggest that consideration be given to deleting those wo

 

  1. We note that based on the DWG’s proposals a duty to search for adverse documents would only arise if Extended Disclosure were ordered pursuant to Model C, D or E. Some of those who have considered the proposals on behalf of the Association have questioned whether such a duty should also arise where Extended Disclosure is ordered pursuant to Model B.

 

  1. We note that the duty to disclose adverse documents arises at the same time as the obligation to give Extended Disclosure (or within 30 days of the CMC where there is no order for Extended Disclosure PD 8.3).

 

  1. The duty to disclose adverse documents is owed by each party to litigation.  Where that party is a company, adverse documents will inevitably be known to some (but not all) directors / employee   Pursuant to the current rules, this does not represent a problem because such adverse documents should be identified by conducting an appropriate search and would therefore form part of that party’s disclosure.   The same applies if Extended Disclosure is ordered pursuant to Models C, D or E (whether or not those documents were already known to the relevant party).

 

  1. However, where there is no order for Extended Disclosure or Model B applies, the only adverse documents which would need to be disclosed are those which are already known to that party (or discovered during a voluntary search). In those circumstances, we are concerned that parties might seek to avoid the duty to disclose adverse documents by ensuring  that  the particular individual  who instructs the  legal  adviser  has no  personal knowledge of those documents (ie ensuring that anyone who knows of adverse documents is not involved in giving instructions).

 

  1. We accept that the proportion of cases to which this concern applies will be relatively small, and we also recognise that such an approach – if it could be proved – might put that party in breach of the duty to act honestly in relation to disclosure (PD 3.1(5)).

 

  1.  Whilst we also have a more general concern that parties may deliberately avoid looking for documents where they have a suspicion that adverse documents exist (but no knowledge), this appears to be an inevitable consequence of the DWG’s recommendation that parties only have to search for documents where the Court considers this appropriate following the application of a party. In most cases, the order for Extended Disclosure will require that a search be made.

 

  1. Whilst the  obligation  to  disclose  known  adverse  documents  is  reinforced  by  separate obligations for Models B, C, D and E, we do not understand why there is no such reinforcement for Model A.  Whilst the point is picked up in PD 8.3, as noted above the duty to disclose adverse documents is elevated where no search is being required so we would suggest that the duty is recorded in Model A too.

 

LIST OF DOCUMENTS

 

  1. The definition of “List of Documents” suggests that there will be no standard form document to replace N265 and that documents will not have to be listed by reference to each Issue for Disclosure in Section 1A of the DRD (which might be helpful in some cases).

 

  1. Where there is no order for Extended Disclosure, adverse documents must be disclosed but there is no need to serve a Disclosure Certificate nor a List of Documents (PD 12.1 and 12.6).

 

H. DISCLOSURE CERTIFICATES

 

  1. There are 2 forms of Disclosure Certificate:-

 

29.1  one for completion by a Legal Adviser confirming that (s)he has advised the relevant party concerning its PD 3 duties; and

 

29.2  one for completion by (or on behalf of) an unrepresented party confirming that (s)he has understood their PD 3 duties.

 

  1. There may be a good reason for it, but we note that the draft certificates do not specifically confirm that the relevant party / Legal Adviser has complied with their PD 3 dutie

 

  1. If it were appropriate for the relevant party / Legal Adviser to certify that they have complied with their PD 3 duties … in relation to the Disclosure Certificate to be signed by a Legal Adviser, we wonder whether this should be a further certificate to be signed by the relevant party confirming that (s)he has understood and complied with their PD 3 duties as well.

 

  1. PD 12.5 provides that  where  the  Disclosure  Certificate  is signed  by a company, firm, association or other organisation it must explain why the signatory (who must be identified) is considered an appropriate person to sign it.  The draft form of certificate for completion by an unrepresented party does not currently include space in which the explanation as to why the signatory was appropriate can be added.

 

COST ESTIMATES

 

  1. We note that whenever Extended Disclosure is offered or sought, PD 10.6 requires the parties to complete Section 2 of the DRD (which includes in paras 13 / 14) a costs estimate.

 

  1. We further note that in relation to costs budgeting, PD 20.2 provides that the parties do not have to complete the disclosure section of Form H before the CMC but that they must complete that section within such period as the court orde

 

  1. Given that disclosure will frequently be the next step following the CMC, in many cases the costs of disclosure will fall outside costs budgeting regime by default (since it is unlikely that the Court will have another opportunity to consider the costs of disclosure before the disclosure exercise is completed).

 

  1. This may not be a bad thing as our members are generally opposed to costs budgeting.  However, we would generally want to avoid the need for an additional hearing simply to revisit costs budgeting of disclosure and we wonder whether in most cases the Court might be able to take a broad view having regard to the order for Extended Disclosure which it has made.   We accept that for this to be viable the parties may have to provide information about the costs of disclosure depending on the different orders for disclosure which the Court might make.

 

J. OBLIGATION NOT TO DISCLOSE IRRELEVANT DOCUMENTS

 

  1.  We note the obligation on the parties in PD 3.1(6) to refrain from disclosing documents that have no relevance to the Issues for Disclosure.

 

  1. We note that there is no equivalent obligation on legal representatives which may be an inadvertent omission.

 

  1. With regard to disclosure generally, amongst members of our Association there is often a tendency to “err on the side of caution” and to give more disclosure rather than risk being criticised for not disclosing documents which might be considered relevant. For that reason we question whether the duty as currently drafted might be softened by providing that parties (and legal advisers) should use “reasonable endeavours” obligations not to disclose irrelevant documents that have no relevan

 

TYPOGRAPHICAL ERRORS

 

  1. Finally, we have noted the following typos:-

 

40.1  in PD 5.3(1), the cross-reference should be to PD 5.8;

 

40.2  in PD 5.4(2) “have” immediately before “(a)” should be moved to immediately after “(a)”;

 

40.3  in para 6 of Section 1A of the DRD, the reference to the “… Reply and Counterclaim …” is presumably intended to be “… Reply and Defence to Counterclaim …”

 

40.4  the terms “CMC” and “case management conference” are used interchangeably in the Practice Direction and the DRD.

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