From 1 January 2019, litigation disputes issued in the Business and Property Courts are subject to a mandatory new disclosure pilot for a 2 year period, which significantly overhauls the previous regime. In addition to the introduction of a completely new procedure, the Pilot introduces more onerous obligations to preserve relevant documents, which includes a requirement to notify at the outset of disputes, not just current, but previous employees who may hold relevant documents.
The Pilot
Disputes commenced in the Business and Property Courts (which is the new umbrella term for the Commercial Court, Circuit Commercial Court, Technology & Construction Court and Chancery Division) will be subject to a mandatory Disclosure Pilot for 2 years from 1 January 2019. In addition to the introduction of a completely new procedure for disclosure which all parties to a dispute will have to become familiar with, this new regime requires all businesses to consider existing document retention and management policies and procedures to manage risk, in the event of disputes arising in the future.
On a domestic level, the introduction of the Pilot is in response to the widely held view that the current regime is both expensive and burdensome. In an international context, it is part of a wider campaign by the English courts to position themselves as a preferred jurisdiction in a post Brexit world.
In short, under the Pilot, the obligations on both legal practitioners and parties to litigation are significantly more onerous, and the changes will require issues relating to disclosure to be considered at a much earlier stage in the process, with the consequent front loading of costs. While the “cards on the table” approach has always been perceived as a real benefit of the English judicial system – the procedural changes will have a direct impact on the strategy of dispute resolution going forward, with parties perhaps being required to show their hand at a much earlier stage than they might prefer.
The Pilot introduces the following key changes:
- The requirement to immediately suspend any document deletion or destruction policies as soon as you are or may become a party to proceedings which have been commenced and the Pilot applies;
- An obligation to notify not just current, but previous relevant employees of the need to preserve documents;
- A requirement to take reasonable steps to ensure that agents or third parties who hold documents on your behalf do not delete or destroy documents.
- A requirement to disclose some documents (known as Initial Disclosure) at the outset of the litigation;
- A shift away from the presumption of Standard Disclosure, with the introduction of Disclosure Models A to E – a menu of different search and disclosure obligations. All models include an obligation to disclose “Known Adverse Documents” – a document will be known if any person with accountability or responsibility for the event or circumstance which is the subject of the case, or for the conduct of the litigation, is aware of it.
The requirement to notify previous employees of the obligation to preserve relevant documents has the potential to create practical difficulties for employers. Rather than address this issue when faced with a dispute to which the Pilot applies, it would be prudent to ensure that policies are in place to recover and retrieve business data and documentation as part of any employee leaver process.
Practical steps could include:
- Ensuring that contracts of employment clearly provide that documents created in the course of employment are the property of the business rather than the individual and must be returned when employment ends;
- Including as part of exit interviews a requirement to confirm that all data/ documentation produced by the individual is held (either physically or electronically) in shared business areas – and if not to make provision for the employee to hand anything else over;
- Explain to all leavers that they may be contacted in future in relation to disclosure obligations;
- As far as possible, seeking to maintain up to date contact details for ex-employees, through, for example, alumni programmes and explain to employees in privacy notice why this is necessary;
- To avoid laptops/mobiles etc being automatically wiped clean when employees leave (for the purpose of re-distribution), but instead care taken to preserve any data/documentation contained on them.
The introduction of the Pilot is a wholesale change in approach from the previous regime. While our readers may be more familiar with proceedings in the employment tribunal than in the Business and Property Courts, it is important to ensure businesses are in a position to comply with these new obligations.
To help you navigate the changes and to offer practical advice and tips on the impact on your business and policies our Dispute Resolution team is hosting a workshop on 6 March 2019. Please save the date and see our events page in upcoming days for complete details.
Kimberley Eyssell