What you need to know about standard disclosure in litigation

Disclosure is a vast and technical part of the litigation process. It requires careful handling and a rigorous approach in order to properly comply with the Civil Procedure Rules (CPR). We’ve put together this handy summary to help you understand your obligations in the disclosure process, summarising in clear and concise terms what you need to know, so that you can work with your solicitor to reach the best possible outcome for your business.

This article will provide a broad overview of the process of standard disclosure in litigation. It will not cover the specific requirements of the Disclosure Pilot Scheme or of electronic disclosure.

What is disclosure?

Disclosure means that you are obliged to formally state that documents – or classes of documents – exist, or have existed, and are or were in your control. You should be aware that this definition includes electronic as well as hard copy documents.

The process is governed by Part 31 of the CPR, and compliance is mandatary for all parties to civil proceedings in England & Wales, with a few very limited exceptions. Part 31 of the CPR and its Practice Directions apply to fast track and multi-track claims: the small claims track has its own separate rules in relation to disclosure.

What is classed as a document?

In the context of litigation, a document is anything in which any information of any description is recorded. This includes (but is not limited to) the following examples:

• Electronic documents: Email/messenger communications, databases and word-processed documents, documents stored on servers or back-up systems, electronic documents that have previously been deleted, metadata (the associated information stored with electronic documents).
• Hard copy documents: Papers, hard copy photographs, manuals, books, videos.

What is the point of disclosure?

The process as a whole is designed to help the court do justice between the parties, with the CPR promoting and encouraging the adoption of a transparent approach from when litigation is first contemplated, right up to the conclusion of the litigation process.

Disclosure gives rise to a right of inspection, where all other parties in your case are entitled to view copies of the documents you have declared the existence of, subject to any privilege. This does of course work both ways, i.e. you will be able to view copies of the documents any other parties to the proceedings disclose too.

What should you disclose and what are your obligations?

This section will deal with what needs to go in the form (usually Form N265, or N265(CC) if the proceedings are in the Commercial Court) that the court will ask each party to complete and send to both the court (referred to as ‘filing’) and the other parties (referred to as ‘serving’), and your obligations in connection with the contents of the form, so that it can be properly verified by the disclosure statement – as discussed below.

In terms of the timing of this exercise, you will be notified by the court as to when they expect the document searches and the Form N265/N265(CC) to be completed by. As a rough idea, this is usually timetabled to happen after the statements of case (usually the Claim Form, Particulars of Claim, Defence/Defence and Counterclaim and any Replies) have been served.

Inspection takes place after the filing and serving of the form. Again, any relevant dates in connection with this will be set out in the timetable dictated by the court, and it is usually done simultaneously.

A note on multi-track claims

Whilst standard disclosure is the default type of disclosure ordered by the court for fast track matters, it is worth knowing that if your claim is on the multi-track (and doesn’t involve personal injury), the judge assigned to your case has the discretion to make bespoke directions about the disclosure obligations of the parties involved. This means that they may effectively make ‘tweaks’ to what would ordinarily be required for standard disclosure.

What is the scope of your obligations in standard disclosure?

Your duties are in relation to any documents which are – or have been – in your control. According to CPR 31.8(2), the concept of ‘control’ includes the following:

• Physical possession
• The right to obtain a document from another party
• The right to inspect or take copies of a document in the hands of another party

In terms of the ‘reasonable search’ that you are expected to carry out for the purposes of standard disclosure, below are the key points as to the type of documents you are expected to attempt to locate:

• Documents upon which you rely in support of your own case
• Documents that adversely affect your own case
• Documents that adversely affect another party’s case
• Documents that support another party’s case
• Documents that a Practice Direction requires you to disclose

In summary, it is absolutely vital to disclose anything that helps/supports yours or your opponent’s case, and anything that might hinder/adversely affect yours or your opponent’s case – however counter-intuitive this may seem.The importance of this cannot be underestimated, as your duty in this regard is not optional.

How does the court decide what amounts to a ‘reasonable search’?

The following are factors which are relevant for the purposes of answering this question:

• How many documents are involved, i.e. the volume of documents involved in the search
• The nature and complexity of the proceedings
• The ease and expense of retrieval of any particular document
• The significance of any document which is likely to be located during the search

Briefly touching upon electronic documents, you must consider these additional factors:

• The accessibility of electronic documents, taking into account developments in hardware and software systems
• The location of the relevant electronic documents
• The prospects of locating the relevant data
• The costs of recovering, disclosing and providing inspection of the same
• The likelihood of the documents being materially altered in the above process

What needs to go in Form N265/N265(CC)?

As touched upon earlier, each party will be given a date by which the court expects the form referred to above to be completed by, and exchanged with, all other parties. Turning to the contents of the form (remembering that Form N265(CC) is only for cases that are proceeding in the Commercial Court), you will be expected to complete three separate parts, as set out below:

1. Part One: All documents within your control that you are going to produce.
   
   These should be listed chronologically, and in instances where many documents will be in the same category (for example, 'memos of telephone calls made between the Claimant and the Defendant between June 2018 – June 2020'), they may be listed generically. You (or your dispute solicitor) would be expected to paginate these documents and refer to the page numbers in the list contained in Part One.
2. Part Two: All documents which are in your control, but you are not producing, and the grounds for not doing so (usually privilege – see below).
   
   Here is where you should refer to any privileged documents in a generic way, and include any documents where a duty of confidentiality is owed to a third party. Set out the reasons for non-disclosure in relation to each category of documents for which inspection is being withheld.
3. Part Three: Documents which you have had but are no longer in your control.
   
   Remember here to set out the reasons why these documents are no longer in your control.

Once the above sections are completed, you will need to sign a disclosure statement.

What is the disclosure statement?

The disclosure statement is the verification required by the court in respect of each Form N265/N265(CC) provided by each party involved in a case. You will need to do the following to discharge your obligations in relation to this statement:

• Set out the extent of the search that has been made to locate the documents that you are required to disclose.
• Certify that not only do you understand the duty you have to disclose documents, but also that you have carried out that duty as expected by the CPR.
• Confirm that you have complied with the obligations.

Who should verify the disclosure statement?

As a company, you should ensure that it is made clear why the individual signing the statement on behalf of the company is the appropriate person to do so.

There are some circumstances in which your legal representative can sign the statement on your behalf.

What about privileged documents?

Privilege is an extremely complex area of law and as such, great care must be taken when you are categorising what documents are privileged for the purposes of disclosure.

Broadly speaking, privileged documents do not have to be provided to the other side, but their existence – and the reasons why they are privileged – have to be set out in general terms in Part Two of Form N265/N265(CC). For the purposes of this article, we will touch upon the main type of privilege which you need to be aware of; namely, legal professional privilege – although it is important to be bear in mind that other types of legal privilege exist and should be duly considered.

Legal professional privilege

‘Legal professional privilege’ is an umbrella term for the following:

• Legal advice privilege: This refers to confidential communications between you and your lawyers, made for the purpose of giving or receiving advice.

• Litigation privilege: This covers confidential communications between you and your lawyers, or you, your lawyer or a third party, which comes into existence for the dominant purpose of being used in connection with actual or pending litigation.

In summary, documents in the above categories do not have to be provided to the other side, but their existence must be acknowledged in Form N265/N265(CC).

What if you fail to disclose something?

It is important for you to be aware of the fact that the duty of disclosure is ongoing throughout the proceedings, until judgment or settlement of the case – and that this includes the duty to preserve relevant documents.

If you fail to disclose something in the disclosure exercise outlined in this note, as a result of it only coming to your attention after the lists in Form N265/N265(CC) have been exchanged, CPR 31.11(2) is the applicable rule. The effect of this Rule is that you must notify all other parties immediately that this has happened.

Getting the disclosure process right can be key to your case, and it is evident from the factors touched upon in this note that there are a multitude of considerations and specific guidelines to adhere to, which may vary depending on the type of proceedings you are involved with, all within the remit of standard disclosure. Given the complexities and technicalities to navigate, it is advisable to seek the right legal advice in early course. Our specialist team of business dispute solicitors are ready to assist with the disclosure process, whatever stage your proceedings – or any contemplated proceedings – are at.