The Disclosure Pilot Scheme (DPS) included duties on parties and their legal representatives to cooperate with each other in connection with the scope of the disclosure exercise (paragraphs 2.3 and 3.2(3) of PD51U).

In this article, Joseph Rossello, a senior associate in our Commercial Litigation team, looks at the recent decision of AAH Pharmaceuticals Limited & Anor v Jhoots Healthcare Limited & Anor [2020] EWHC 2524 (Comm), which considers these duties.

It was hoped that the introduction of the requirement to cooperate would help deliver the cultural change needed to make the DPS a success. Despite the duties being clearly stated, the court has reiterated these requirements to parties where there has been a failure to resolve disclosure issues between themselves. This is particularly the case where the parties have failed to utilise the disclosure guidance hearing mechanism (at paragraph 11 of PD51U) to resolve differences rather than having the matter dealt with as part of an application under Part 23 of the Civil Procedure Rules (CPR).

 

AAH Pharmaceuticals Limited & Anor v Jhoots Healthcare Limited & Anor

In the AAH case, the parties had endeavoured to resolve their dispute about the scope of disclosure through correspondence. However, despite exchanging a number of letters, the parties disagreed about the methodology to be adopted by the claimants for reducing the documents collected into a reasonable and proportionate pool of documents for review. In particular, there was disagreement about how the keywords initially agreed in the disclosure review document should be applied to the issues for disclosure. There was also disagreement about the defendants’ suggestion to undertake testing of amended keywords in order to reach agreement on the pool of documents to be reviewed.
With the impending disclosure deadline looming and the disagreement not resolved, the claimants wrote to the defendants stating that they would not exchange further correspondence on the disagreed issues and would complete the review exercise as they had proposed. They also suggested that if the defendants’ review of the claimants’ disclosed documents identified any missing material, then the defendants could apply specific disclosure.
The defendants applied to the court for orders to resolve the outstanding disclosure issues.

 

Decision of the court

In considering this matter, His Honour Judge Worster reminded the parties of their duties of cooperation as set out in paragraphs 2.3 and 3.2(3) of PD51U. He stated that the appropriate way to deal with this matter was by utilising the Disclosure Guidance Hearing procedure as set out in paragraph 11 of PD51U.

In relation to the issue of cooperation between the parties, the judge referred to the decision in McPartland and Partners v Whitehead [2020] EWHC 298 (Ch) where Sir Geoffrey Vos, Chancellor of the High Court, emphasised the need for cooperation between parties. Sir Geoffrey referred to the fact that the DPS is “built on cooperation” and that “this is not intended to be mere exhortation”.

His Honour Judge Worster also referred to the decision in UTB LLC v. Sheffield United Ltd, [2019] EWHC 914 (Ch), where the court held: “Legal representatives have continuing obligations under paragraph 3.2(3) of PD51U ‘to liaise and cooperate with the legal representatives of the other parties… so as to promote the reliable, efficient and cost-effective conduct of disclosure’ and indeed the trial of the action more generally.”

His Honour Judge Worster did not believe it was appropriate for one party to state that it was not going to correspond with the other or to engage in confrontational or point scoring correspondence. If discussions came to nothing, then the next step was to request the court’s guidance at a Disclosure Guidance Hearing. He took the view that proceeding unilaterally and refusing to engage in discussions about the scope of the disclosure caused both parties to spend time and money on an application which would have been better spent resolving the matters not agreed.

When considering proposals to look at alternative keywords to those suggested in the Disclosure Review Document, (ie prior to them being tested on the documents collect), the court looked at the language in Section 2 of the Disclosure Review Document under the heading ‘Keyword Searches’. The judge considered the use of words “initial keywords” and “testing process” indicated that applying keywords is part of a process of testing and refinement.

The court stated that there should be a willingness to share information and to try reasonable proposals made by the other side on the basis that disclosure is a process and that the results will not, and cannot, be perfect.

In Agents’ Mutual Limited v Gascoigne Halman Limited [2019] EWHC 3104 (Ch), the court considered the case of a party having conducted keyword searches unilaterally. In AAH, His Honour Judge Worster considered the approach adopted in Agents’ Mutual to be correct in that parties should adopt a collaborative process of undertaking iterative searches to endeavour to agree the appropriate pool of document to review before any review of the documents is undertaken. This is because it is the manual review that costs time and money, not the multiple re-runs of electronic keyword searches to determine the appropriate pool of documents to review.

In the AAH case, the defendants had suggested having telephone or video calls in an effort to endeavour to resolve any issues more quickly. The claimants had not responded to these suggestions. However, the judge stated that exchanging written correspondence was not always the best way of promoting a collaborative process. He said that speaking to each other is more likely to promote cooperation and result in issues being more quickly resolved than exchanging long letters.

While the judge recognised that the court may not be anxious to engage in micro-managing the disclosure process unless that was necessary, in the absence of any agreement being reached between the parties they may need to seek the court’s assistance in order to advance the disclosure.

In this context, the judge considered the decision in Vannin Capital PCC v Rhos Shareholders Action Group Ltd and anor [2019] EWHC 1617 (Ch). In the Vannin case, the court considered that the parties had failed to make use of the opportunity to obtain guidance from the court at a Disclosure Guidance Hearing, which may have resolved many of the outstanding issues and saved time and costs.

Paragraph 11 of PD51U sets out the parameters for a Disclosure Guidance Hearing. A party may seek to have a “discussion” with the court to seek guidance on the scope of Extended Disclosure or the implementation of an order for Extended Disclosure. However, prior to seeking a Disclosure Guidance Hearing, the parties must have made efforts to resolve disputes between themselves.

Normally, evidence will not be required for a Disclosure Guidance Hearing and an application will have a maximum hearing length of 30 minutes with a maximum of 30 minutes pre-reading.

While the guidance given by the court at a Disclosure Guidance Hearing will be recorded in a short note, the court may also make orders at a Disclosure Guidance Hearing.

His Honour Judge Worster determined that this matter was appropriate for a Disclosure Guidance Hearing and went so far as to set out in his judgment the guidance he would have provided had the matter proceeded in this way. In addition to making certain case-specific points relating to the use of keywords, he suggested that the parties conduct future discussions about the scope of the disclosure face-to-face rather that in correspondence (albeit that the parties should record the steps they are taking in writing).

 

Conclusion

The intention of creating a culture of cooperation where parties already distrust each other in what is an adversarial process was always going to be difficult and take some time. However, the court seems willing to engage with parties to provide guidance at a Disclosure Guidance Hearing where agreement on the disclosure process is difficult or seemingly impossible.

The uptake on utilising Disclosure Guidance Hearings appears to be much lower than was expected by the Disclosure Working Group (DWG). The DWG was set up in 2016 to consider proposed amendments to the disclosure regime in Part 31 of the Civil Procedure Rules following concerns about the “perceived excessive cost, scale and complexity of disclosure”.

Why Disclosure Guidance Hearings are not more frequently sought is possibly due to a few reasons. It may be because the parties see disputes taking much longer than the one-hour time limit provided. Another reason may be the fact that Disclosure Guidance Hearings are limited to matters only relating to Extended Disclosure. Or, it may be because with an upcoming disclosure deadline, parties have otherwise made an application under Part 23 of the CPR to extend the time to deal with disclosure issues and to also seek other consequential orders to progress the matter to trial.

On 29 September 2020, the the DWG announced some proposed changes to PD51U, which include changes to paragraph 11 on Disclosure Guidance Hearings. The changes include expanding the scope of Disclosure Guidance Hearings to deal with any matter arising under the pilot rather than only Extended Disclosure. The changes also clarify that such hearings are to deal with matters where guidance and not a ruling is required. It is not proposed to change the hearing time length. Whether these proposed changes will result in a greater uptake in Disclosure Guidance Hearings remains to be seen.

 


 

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