What is the Disclosure Pilot? 

Practice Direction 51U of the Civil Procedure Rules sets out a pilot scheme for disclosure (Pilot) in the Business and Property Courts. It commenced on 1 January 2019 and applies to existing and new proceedings in place of the existing disclosure rules for a period of two years. 

The Pilot includes the Business and Property Courts in Birmingham, Bristol, Cardiff, Leeds, Liverpool, Manchester and Newcastle. It does not, however, apply in the County Court, to competition or public procurement claims, within the Intellectual Property and Enterprise Court, Admiralty Court, the Shorter and Flexible Trials Scheme or a fixed costs regime or capped costs regime. A modified regime applies in the Patents Court.

Why does it matter?

The Pilot represents a significant shift in approach to disclosure, as explained by Sir Geoffrey Vos, the Chancellor of the High Court in UTB v Sheffield:

"…the introduction of the Pilot was intended to effect a culture change.  The Pilot is not simply a rewrite of CPR Pt 31.  It operates along different lines driven by reasonableness and proportionality…with disclosure being directed specifically to defined issues arising in the proceedings."

Although the Pilot applies initially for a two year period and is currently limited to the Business and Property Courts, it is expected to be made permanent for those courts, and may be applied more widely, after the Pilot stage.  

What guidance has the court given?

Given the profile and importance of the Pilot, recent court decisions with guidance as to how it is to be interpreted and applied are of great interest to those dealing with disputes. Some of the key decisions in relation to the Pilot are summarised below. 

Specific disclosure applications White Winston Select Asset Funds LLC and another v Mahon and another [2019] EWHC 1014 (Ch) (23 January 2019)

The claimants made an application for specific disclosure on the basis that the defendant had (on the claimants' case) failed to provide six categories of documents pursuant to an order for standard disclosure, which was made before the Pilot commenced. However, as the application for specific disclosure was heard post 1 January 2019, the Pilot applied. Paragraph 1.9 of PD 51U provides that CPR 31.12 (specific disclosure) does not apply to cases under the Pilot.  

The judge therefore had to grapple with whether he had jurisdiction to make something akin to a specific disclosure order in circumstances if the defendant had not complied with his disclosure obligations in accordance with the original (pre-Pilot) order for standard disclosure. In the event, the judge relied on his general case management powers (see paragraph 20.1 of PD 51U) to make "at least the equivalent of an order which could previously have been made under CPR Rule 31.12".

(See also Kazakhstan Kagazy plc and others v Zhunus and others [2019] EWHC 878 (Comm) for treatment of a specific disclosure application under the Pilot.)

Application of Pilot to pre-January 2019 cases UTB v Sheffield [2019] EWHC 914 (Ch) (9 April 2019) 

In this dispute about ownership of Sheffield United, an order for standard disclosure had already been made before the Pilot commenced. Paragraph 1.3 of PD 51U provides that "[t]he pilot shall not disturb an order for disclosure made before the Commencement Date…unless that order is varied or set aside". In addition, paragraph 51.2.10 of the White Book provided that "[t]he pilot does not apply to any proceedings where a disclosure order has been made before it came into force unless that order is set aside or varied." The parties therefore assumed that the defendant's application for disclosure of further documents would be governed by CPR 31. However, unexpectedly, Mr Geoffrey Vos dealt with the disclosure application under PD 51U, noting that the Pilot deliberately had no transitional provisions. The court made clear that, whilst a pre-existing disclosure order would not be disturbed, any new application for disclosure would be governed by PD 51U, not CPR 31.

For more on this decision, see our e-alert here.

Disclosure guidance hearings and varying orders for extended disclosure Vannin Capital PCC v RBoS Shareholders Action Group Ltd and others [2019] EWHC 1617 (Ch) (24 June 2019) 

This case related to the litigation arising from the RBS rights issue in 2008.  The court made an order for extended disclosure under the Pilot, which the second defendants then applied to vary. The claimant also applied for further searches to be made by the second defendants.  

The judge highlighted that there had been no attempt by either party to seek guidance from the court at a disclosure guidance hearing (paragraph 11 of PD 51U). Instead there had been lengthy skeleton arguments and detailed submissions which took more than half a day of court time. The judge said this was "both undesirable and contrary to the spirit of the Disclosure Pilot which requires the parties to cooperate so as to promote the reliable, efficient and cost-effective conduct of disclosure". Disclosure guidance hearings are actively encouraged by the courts and practitioners would be well advised to take advantage of them, where appropriate.

The second defendant applied to vary the original order for extended disclosure to remove one of the corporate defendants from the entities who were to provide disclosure. Paragraph 18 of PD 51U deals with varying an order for extended disclosure. In this case where a party was seeking to exclude a disclosure obligation which has already been ordered, the judge said the applicable test was whether, under paragraph 18.2 of PD 51U, "the existing order is disproportionate such that it is reasonable and proportionate to reduce its scope". The judge held that the original order was not disproportionate and the corporate defendant should not be excluded.

Application for additional disclosure close to trial date Ventra Investments Ltd v Bank of Scotland plc [2019] EWHC 2058 (Comm) (30 July 2019) 

This decision suggests that practitioners should expect a strict approach from the courts when operating under the Pilot, especially when trial dates may be at risk. The claim was issued in July 2015 (pre-Pilot). The original deadline for standard disclosure was extended by agreement but eventually missed.  The original trial date was also vacated and re-listed in January 2020, some six months after this hearing. The claimant applied (1) to vacate the new trial date and set a new timetable; (2) for additional disclosure from the defendant; and (3) for consequential amendments to the claimant's statements of case and evidence. The defendant, for the most part, opposed the applications.

The applications were issued in March 2019 and, (post UTB v Sheffield – see above), it was common ground that they were now subject to the Pilot. The parties agreed that the existing order for disclosure should be treated as an order for extended disclosure under paragraph 6 of PD 51U. The parties disagreed as to whether the claimant's applications should be treated as applications under paragraph 17.1 or 18.1 of PD 51U but the judge considered any difference in emphasis in the two provisions to be of no practical effect in this case. He was, however, concerned with how the applications for disclosure might jeopardise the trial date:

"…there are in my judgment no circumstances in which it would be reasonable and proportionate for me now to make an order for disclosure – even to rectify a failure adequately to comply with the earlier order for disclosure – unless that order was one that was necessary for the just disposal of the proceedings." (Emphasis added.)

Although a small number of the claimant's specific requests for disclosure were granted, most were refused. In respect of one category of documents, this was because the documentation was in the possession of third parties and the defendant had no right to it. However, the judge's overriding concern appeared to be the risk which the application posed to the trial date.  Although he highlighted the "very significant asymmetry of information between the claimant and the defendant" in the context of allegations of fraud and misconduct against the defendant bank, which made disclosure an important tool for the claimant, this was not sufficient to get the majority of the requests over the line where the trial date was looming.

Part 8 claims – does the Pilot apply?

In March 2019, Chief Master Marsh published a Note containing guidance as to whether the Pilot applies to Part 8 claims. The Note says that the Pilot does not directly apply to Part 8 claims because that part contains its own regime for disclosure. The court does, however, have power to make an order for extended disclosure under the Pilot for a case proceeding under Part 8, albeit it is not anticipated that the full procedure would normally be required.

It's probably here to stay

Practitioners should expect to see more cases of this nature as parties and their advisers grapple with the Pilot and courts seek to iron out teething issues. As the existing disclosure rules in CPR 31 will likely be amended in due course to reflect the provisions of the Pilot, practitioners are encouraged to provide ongoing feedback to Professor Rachael Mulheron of Queen Mary University of London, who is monitoring the Pilot, so that the disclosure rules can be appropriately shaped for long term use.