New disclosure regime “set to cause problems” for professional negligence claims

Evans: Additional costs likely

Professional negligence claims will become harder to handle under the new approach to disclosure which will be piloted later this year in the Business & Property Courts, particularly for defendants, a barrister has warned.

Helen Evans of 4 New Square said front-loading of costs, imbalance between the parties, and disclosure of adverse documents were all potential problems.

The plan for a complete overhaul of the disclosure regime was set out last November by a working group led by Lady Justice Gloster.

Under this, the duties of the parties, and of their lawyers, in relation to disclosure will be expressly set out, including a duty to cooperate with each other and assist the court over disclosure, and to disclose known adverse documents, irrespective of whether an order to do so is made.

There will be ‘basic disclosure’ of key/limited documents relied on by the disclosing party and necessary for other parties to understand the case they have to meet, to be given with statements of case. A search should not be required for basic disclosure, although one may be undertaken.

The working party said that, for some cases, basic disclosure may obviate the need for any further disclosure.

Where ‘extended disclosure’ is required, there will be five models for the court to order, ranging from an order for no disclosure in relation to a particular issue, through to the widest form of disclosure, requiring the production of documents which may lead to a train of enquiry.

Writing on her chambers’ website, Ms Evans said the new regime would require parties to focus much more closely on what disclosure they were seeking from the pleadings stage onwards.

“The way the system is designed now requires each party to think in detail about what it wants from the other side (rather than to focus on its own disclosure). A party seeking anything other than basic disclosure will have to incur the substantial costs of completing a list of disclosure issues and documents.

“Given the requirement that the disclosure model adopted be reasonable and proportionate, the seeking party is likely to have to pull together detailed information about what disclosure may cost.

“A party resisting extended disclosure will have to do similar work in order to argue against the model. “Although there is some suggestion that costs budgeting may be delayed until after the relevant disclosure model is imposed, the court will want to know what the disclosure stage will cost before it reaches a decision about what is appropriate.

“Of course, having additional costs budgeting hearings after disclosure has been dealt with will also increase parties’ expenditure.”

On the imbalance between the parties, Ms Evans said defendants usually had a file of all the documents required for a court to determine breach of duty at least.

“By contrast, the bulk of the documents relating to issues such as causation and loss tend to be held by claimants. They are rarely in one file. They can come from a disparate number of sources, such as emails, letters, bank statements, information about investments and so on.

“Claimants are likely to depict disclosure as a substantially more onerous task for them, and argue for the slimmer disclosure models, whilst seeking the defendant’s complete hard-copy file.

“When deciding what is reasonable and proportionate, the court has to take into account a party’s financial means as well as the ease and expense of locating and retrieving documents. Again, this may work in some claimants’ favour.”

Ms Evans continued that where a party was only under a duty to disclose ‘known’ adverse documents, “this is likely to prove troublesome”.

As many professional negligence claims were only started years after the event giving rise to the action, “how realistic is it to expect a party to know about the existence of 10-year-old adverse documents if there is no search requirement?”

Further, many claims were brought by corporate claimants. “Whose knowledge is relevant for the purposes of adverse documents? The current directors? The former directors? Which ones? What enquiries have to be made?”

The barrister concluded: “The disclosure pilot that is expected to start in October 2018 is likely to pose significant challenges for lawyers handling professional negligence claims, particularly on the defendant side.

“It will require significant changes of practice in terms of grappling with disclosure early on and being prepared to persuade the court to go beyond what would currently be regarded as very basic disclosure.

“If standard disclosure is shortly to be a thing of the past, it is important to get thinking about which parts of it are most necessary to professional negligence claims. It will be for the seeking party to identify and explain why documents of a particular type have to be disclosed in order for there to be a fair trial.”

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