The Disclosure Pilot Scheme (DPS), (Practice Direction 51U (PD 51U)), applies to cases being brought before the Business and Property Courts of England and Wales.
Since its commencement in January 2019, there have been a few court decisions that will assist parties and practitioners get to grips with some of the new concepts that the DPS introduced. Senior Associate Joseph Rossello and Trainee Solicitor Kieran Mercer in our Commercial Litigation team, examine some recent decisions that consider the limits of Initial Disclosure and whether, as part of Extended Disclosure, what a Model C or Model D disclosure request looks like and which one is appropriate when, as well as the narrow application of Model E disclosure.
For more information about the key provisions of the DPS, please refer to our article here.
By way of background, we set out a summary of some of the concepts from the DPS considered in these recent decisions.
- Initial Disclosure
The requirement to provide Initial Disclosure arises when a party comes to serve its statements of case. At that time, assuming the number of documents is reasonable (around 500 documents or 1,000 pages), a party will serve an Initial Disclosure List of Documents detailing the key documents on which it has relied in formulating its case and the key documents which other parties require to understand the nature of the case against them.
- Extended Disclosure
In circumstances where Initial Disclosure is not appropriate, or where additional documents are required to assist dispose of the case, the parties can apply to the court for an Extended Disclosure order. As part of this process, the parties should attempt to agree a List of Issues for Disclosure. This List of Issues for Disclosure is to highlight the issues in dispute that require documentary evidence in order to resolve the proceedings fairly.
In order to determine the Disclosure Issues, the parties can seek an order to apply one of five models to each issue to cater for the varying levels of search the parties need to complete to identify disclosable documents. The various Extended Disclosure Models are set out in Practice Direction 51U, paragraph 8.
- What are Disclosure Models C, D and E?
Each of Models C, D and E can be briefly summarised as follows:
- Model C disclosure requires the disclosing party to undertake a search for particular documents or a narrow class of documents which relate to a specific Disclosure Issue.
- Model D requires a party to undertake a proportionate and reasonable search for documents relevant to a Disclosure Issue. The court will set the limits to the scope of the search following consideration of the Disclosure Review Document (DRD).
In addition, ‘Narrative Documents’, being those which do not relate directly to a Disclosure Issue but which do pertain to the background or material facts or events of the matter, may also be subject to disclosure under Model D, but only where provided for specifically in the court order.
- Model E is reserved for exceptional cases and shall typically be the widest form of disclosure ordered. Model E stipulates that parties are also obliged to disclose documents that may lead to a ‘train of enquiry’ potentially culminating in the disclosure of additional documents which are supportive of or harmful to the disclosing party’s case.
Each of these models requires the disclosure of known adverse documents, documents that a party is aware of that contain information that contradicts or materially damages the disclosing party’s contention or version of events on an issue in dispute or supports the contention or version of events of an opposing party on an issue in dispute.
For more information on known adverse documents or narrative documents, please read our article here.
Which disclosure model should you choose: Model C or Model D?
The relationship between Model C and Model D disclosure was scrutinised in the recent decision of Mrs Justice O’Farrell in Energy Works (Hull) Ltd v MH High Tech Projects UK Ltd and another  EWHC 1699 (TCC).
The claimant requested the court order a Model C extended disclosure, arguing that the central issues were relatively narrow and that a focused search would be cost-effective, proportionate and reasonable.
In response, the defendants noted that the claimant’s purported Model C requests included specific documents such as internal project monthly status reports, minutes from internal meetings, design change notifications and risk registers. However, it also included broad classes of documents, including internal emails, memoranda, progress reports, as well as documents that had passed between the first defendant and other members of its corporate structure.
In determining the matter, the court held that the extent of the claimant’s requests demonstrated that the defendant would be required to undertake “fairly extensive searches”, which amounted to Model D requests.
In this matter, the judge held that the starting point should be to use Model D and seek to identify issues where other models were more appropriate or required very limited disclosure. The court also noted the relationship between the clarity of the pleadings and the applicability of the available Disclosure Models. Where the parties’ pleadings were sufficiently defined, Model C would often be suitable. However, where this was not the case, the majority of Disclosure Issues would require parties to use Model D.
One of the aims of the DPS was to move away from requiring extensive searches for documents as the norm and the first starting point in a disclosure exercise. Instead, the intention is to move towards more focused and narrow disclosure that is specific to the issues requiring documents in order to resolve the matter. This decision would appear to be at odds with this aim and potentially opens up the use of broader search models as a starting point in some matters.
Limits on Initial Disclosure and Model E Disclosure
In the matter of The State of Qatar–v-Banque Havilland SA and others  EWHC 1248 (Comm), Mrs Justice Cockerill gave helpful guidance to litigants on the limited reach of Initial Disclosure under the DPS. She affirmed that Model E should be ordered in very limited circumstances.
Initial Disclosure under the Pilot Scheme seeks to streamline the disclosure process and is, therefore, intended to be “very tightly focused”, encompassing only those documents on which reliance by one of the parties has been placed.
The court noted the similarities between Practice Direction 18 Paragraph 1.2, which states that preliminary requests for further information should be restricted to matters that are reasonably necessary and proportionate to enable the requesting party to make their case, and PD 51U Paragraph 5.1 (2), which refers to the provision of “the key documents that are necessary to enable the other parties to understand the claim or defence they have to meet”.
Model E or “train of enquiry” disclosure under the DPS is likely to be mandated only in more demanding circumstances, as seen in the pre-DPS case of Berezovsky-v-Abramovich  HWHC 210 (Comm). In Berezovsky, the contours of the train were described as an identifiable category or class of document accompanied by an explanation of the nature of the enquiry envisaged. It was not intended that the train of enquiry be open-ended or with no clear result envisaged from the outset.
In the present case, there was insufficient detail regarding the nature of the train of enquiry for Model E to be ordered. However, it was held that the results of undertaking a Model D search could lead to a specific train of enquiry disclosure at a later date.
In the case of Kings Security Systems Limited –v- Anthony Douglas King and Evans  EWHC 3620 (Ch), Master Kaye provided further insight into the considerations of the court when faced with a request for Model E disclosure.
The defendant requested Model E disclosure be granted in relation to six Disclosure Issues. The justification provided by the defendant was that the allegations against it, which included bribery, were sufficiently serious to require the widest form of disclosure available. The claimant rejected the defendant’s assertion and argued that a Model E order would lead to “unnecessary and disproportionate disclosure”.
In siding with the claimant, Master Kaye reiterated that Practice Direction 51U is a “cultural shift in approach to disclosure” and that disclosure under the DPS was an “iterative process and that the court may make disclosure orders in stages”.
Part of the rationale for the decision was the court’s concern over the extensive issues for disclosure sought by the parties. Specifically, the scope of the issues for which Model E had been requested and the failure of the parties to provide any indication of the cost consequences for a Model E order. This meant that it failed to pass the reasonableness and proportionality test.
It was held in this case that Model D should be applied to a more focused list of Disclosure Issues. It could be that the parties may agree that either Model B or Model C would be more appropriate upon completion of this exercise.
With the confirmation that the DPS is to be extended from December 2020 to at least the end of 2021, we can expect to see further refinement of the Disclosure Models by the courts.
The trend appearing from the above cases is that the courts will be more inclined to order Model D disclosure in complex, document-heavy commercial litigation. However, they will be reluctant to order Model E disclosure unless the results of the Model D search warranted a further, more extensive search for documents.
However, if Model D disclosure is to be ordered more frequently than originally contemplated under the DPS, one would expect the court to expect parties to utilise the available technology. This should include the full suite of analytical tools and technology-assisted review, in an effort to reduce the time taken and the costs of disclosure exercises.
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