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Disclosure pilot scheme applies without exception

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Constance Christabel
Christabel Constance

Senior PSL

London

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25 June 2019

The new Disclosure Pilot Scheme (DPS) applies from 1 January 2019 to all cases in the Business and Property Courts even where an old style Civil Procedure Rules (CPR) Part 31 disclosure order was made prior to that date. Although the DPS will not undo an existing disclosure order, any new disclosure applications and anything not expressly covered by that order will fall within the DPS: UTB v Sheffield United Ltd & ors [2019] EWHC 914 (Ch).

The underlying dispute in these proceedings concerned a joint venture which had turned sour between Sheffield United Ltd (SUL) and UTB LLC (UTB), a company ultimately controlled by a Saudi prince, over the running of Sheffield United FC. Standard disclosure was ordered under CPR 31 prior to 1 January 2019 and the coming into force of the DPS. The parties purported to give disclosure pursuant to that order, but SUL believed UTB’s disclosure was defective. SUL applied in March 2019 for further disclosure including of documents over which UTB had claimed privilege. The application came before the Chancellor of the High Court, Sir Geoffrey Vos. 

DPS applies to all transitional proceedings

 The Chancellor first sought to determine which disclosure regime applies to applications where a disclosure order has already been made under CPR 31 (prior to the DPS coming into force).

  • Did the new DPS apply (as set out in CPR Practice Direction 51U) given that from 1 January 2019 its use (with a few exceptions) is mandatory in the Business and Property Courts?
  • Or did the old CPR 31 regime apply given that disclosure had already been ordered and produced under those rules (especially where the current application primarily related to that order)?

The Chancellor was emphatic in his ruling that the DPS applies. He explained that it is now the only regime available to govern disclosure in the Business and Property Courts irrespective of whether there is an existing CPR 31 disclosure order. Practice Direction 51U clearly states that the DPS applies for two years “to existing and new proceedings” and furthermore it intentionally contains no transitional provisions. SUL’s disclosure applications were therefore governed by the DPS. 

The confusion as to whether the new DPS applies to transitional proceedings stems from a misunderstanding of paragraph 1.3 of Practice Direction 51U. This states that the “[DPS] shall not disturb an order for disclosure made before…[1 January 2019]...unless that order is varied or set aside”. However, the Chancellor explained that this just means that the DPS will not undo an existing disclosure order – not that the DPS will not apply to those proceedings. This misunderstanding has unfortunately been compounded by the White Book notes incorrectly stating at paragraph 51.2.10 that “[t]he [DPS] does not apply to any proceedings where a disclosure order had been made before it came into force unless that order is set aside or varied”. The Chancellor (who is also Editor-In-Chief of the White Book) said that this note is “wrong”.

DPS will be applied pragmatically to transitional cases

The Chancellor explained that the fact the DPS refers to new concepts like “Extended Disclosure” and “Issues for Disclosure” does not make it any less applicable to cases which straddle the two regimes. Although the court will look to interpret the DPS in a way that makes it work effectively for such cases, parties should give detailed thought as to how the new rules will affect their disclosure application. 

The Chancellor gave no general guidance as to when additional DPS material (eg a fully completed Disclosure Review Document) will have to be produced in transitional cases. In this case, the parties were required to agree a new DPS List of Issues for Disclosure and SUL needed to make its disclosure applications under the DPS rules for varying an order for Extended Disclosure. 

Extended Disclosure only if reasonable and proportionate

Before making his ruling on whether the disclosure applications were successful, the Chancellor paused to note that the introduction of the DPS is intended to effect a culture change. It is not a re-write of CPR 31. It operates along different lines driven by reasonableness and proportionality. It is directed at fairly resolving the issues in the proceedings and specifically the Issues for Disclosure. Parties must therefore cooperate and act with proportionality under the DPS. Extended Disclosure should not be used as a tactic in hard fought litigation. It is all about the just and proportionate resolution of the real issues in disclosure.

The privilege challenge

The privilege dispute centred on certain emails between the Saudi prince and Mr Giansiracusa, who was both his lawyer and business associate. UTB claimed privilege over the correspondence in question on the basis that Mr Giansiracusa was corresponding with the prince as his lawyer in a relevant legal context. SUL challenged this claim to privilege on the basis that the unredacted parts of the emails showed that Mr Giansiracusa was communicating here as a “man of business” rather than as his lawyer. SUL asked the court to inspect these emails in full to see whether privilege had been properly claimed. 

The Chancellor approached the application by firstly considering when the court can inspect documents for privilege under the DPS. Pre-DPS case law provides that the court has a broad judicial discretion to inspect, but that such discretion should be exercised cautiously with the court alive to the dangers of looking at the documents out of context (WH Holdings v E20 Stadium1). The Chancellor considered that the DPS tightened this discretion further as the new rules add a “necessity” requirement to inspection (the court may inspect “if that is necessary to determine whether the claimed right or duty exists”). The Chancellor therefore found that the cautious approach to inspection should apply with even greater force under the DPS. 

In this case, the Chancellor thought it was reasonable and proportionate to inspect the documents given an expedited trial was imminent, he was only being asked to inspect a sample of documents (which represented SUL’s best privilege challenge) and he could see no other way of properly testing SUL’s submissions.

On inspection, the Chancellor found that the disputed emails were indeed covered by legal advice privilege. Although Mr Giansiracusa had a dual role, in the redacted communications he was corresponding as a lawyer in a “relevant legal context” as part of the “continuum” of his advice. In any event, the Chancellor said that these emails did not go to the key Issues for Disclosure. SUL’s challenge was therefore outside the spirit of the new regime and should never have been brought.

Remaining disclosure applications refused

Similarly in relation to the remaining disclosure applications, the Chancellor refused these on the basis that they had limited probative value to the central issues in the case. 

COMMENT

The Chancellor of the High Court has now made clear that the DPS applies as much to transitional proceedings (where disclosure has already been ordered under CPR 31) as it does to new proceedings. This clarity is to be welcomed as the court has to some extent been sending out mixed messages on this. However, it might have been more welcome if the clarity had gone the other way. Parties who have already complied with their CPR Part 31 obligations may feel they are getting a raw deal where they are now required to also undertake additional work to comply with the DPS (including the potentially onerous Disclosure Review Document). It is hoped that the Chancellor’s promised pragmatic approach will mean that such work and expense is kept to a minimum.

Footnote:

1. [2018] EWCA Civ 2652.

Further information

This case summary is part of the Allen & Overy Litigation and Dispute Resolution Review, a monthly publication.  If you wish to receive this publication, please contact Amy Edwards