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disclosure pilot, in use in the Business and Property courts since 1 January
2019, requires co-operation between the parties and their advisers. This is needed
to take the use of tactics out of the disclosure stage of a claim, reducing the
cost of the process and making it a shared project. That is a good theory, but
parties’ lawyers often have different ideas about disclosure even without there
being distrust between their clients. This case, one of a series of reported
decisions on the working of the disclosure pilot scheme since mid-2019,
demonstrates the importance of both sides working together on the disclosure
exercise rather than acting unilaterally. It also shows the value of a judge
holding disclosure guidance hearings provided for under the pilot once the
disclosure process gets underway. Written by Ian Gascoigne, dispute lawyer and
Pharmaceuticals Ltd & Another v Jhoots Healthcare Ltd & Another  EWHC 2524 (Comm)
Prior to its introduction, the disclosure pilot was heralded as a means of altering the entrenched adversarial culture at the disclosure stage of a claim. The main criticisms were that often the cost of the disclosure exercise was disproportionate to the amount at stake in the claim, it took too long, and it allowed better resourced parties to play tactics. In fairness, it is perhaps too early to say whether the pilot will provoke substantial changes. The third Mulheron report, detailing responses to a survey circulated to practitioners in late 2019, indicates much unhappiness with the pilot, as adding complexity and cost to cases. The requirement to agree a list of disclosure issues and to submit a lengthy disclosure review document were sources of disquiet. This case shows a pragmatic approach on the judge’s part. The judge was unwilling to ignore complaints about the workability of the judge-endorsed approach to keyword searching and accepted that getting the process right would be achieved by ‘trial and error’. Significantly, the judge emphasised that parties’ advisers should talk to each other about the way forward rather than writing ‘set piece letters’, which the judge did not see as the best way of achieving a collaborative approach. Although strongly criticised by those responding to Professor Mulheron, the duration of the disclosure pilot has been extended to 31 December 2021.
The claim, which is continuing, involves a dispute over the price of pharmaceutical products supplied by a wholesaler, AAH Pharmaceuticals Ltd (AAHP), to retailers Jhoots and Pasab (the retailers). The retailers allege that AAHP breached their contract by not complying with a clause that regulated the prices at which the retailers were sold the products by AAHP in comparison with market prices. As the claim is subject to the disclosure pilot created by CPR PD 51U, the parties had agreed twenty-seven issues for disclosure in the Disclosure Review Document. As part of disclosure management, a judge had resolved a disagreement over the scope of ‘keyword searching’ by ordering the parties to adopt different keywords for different issues rather than using a uniform approach for all searches as the retailers wanted. During the preparation of disclosure lists, the parties’ lawyers fell out in correspondence about the efficacy of this approach, AAHP seeking to stick to the judge’s order and the retailers arguing that it should be tested before the parties finally committed to it. AAHP’s lawyers, evidently believed their counterparts were procrastinating, accused them of an ‘unco-operative approach’. AAHP decided to proceed unilaterally using keywords they had revised following the judge’s order, but which were not agreed. This provoked a court application from the retailers’ advisers in which they sought a variation of the judge’s order. The practice direction which set up the disclosure pilot provides for variation of an order for extended disclosure at CPR PD 51U, para 18.1. An applicant must satisfy the court that variation is ‘necessary for the just disposal of the proceedings and is reasonable and proportionate’. A different judge had to decide between continuing with the original order or accepting the argument of the retailers’ solicitors using this test.
The second judge identified middle ground. He set out the approach he would have taken had he been handling a disclosure guidance hearing earlier in the case. This involved not endorsing the retailers’ proposal of using uniform keywords across the issues and exploring the approach of subgroups put forward by AAHP. But he indicated that more discussion between the parties was required, including ‘a willingness to share information and to try reasonable proposals made by the other side, even if there are concerns about them’. Describing disclosure as a ‘process’ requiring ‘a realistic approach’, the judge urged the parties to co-operate more than they had been doing; speaking to each other was ‘more likely to promote co-operation’. He referred to the duties on parties’ advisers set out at CPR PD 51U, para 2.3. This states that party co-operation was required to assist the court in managing disclosure in the most efficient way possible. In the case of UTB LLC v Sheffield United Ltd  EWHC 914 (Ch), the Chancellor had emphasised the duty of co-operation to ‘promote the reliable, efficient and cost-effective’ conduct of the process.
On the specifics of which were the most suitable keywords to be used in harvesting the parties’ data, the second judge saw merit in the targeted approach AAHP had taken, linking the defendant companies’ names to other keywords to remove irrelevant documents. But he also indicated that AAHP should review the ‘responsive hits’ the retailers had had using their own approach. He set a further disclosure review hearing for two weeks later when progress could be monitored, expecting more co-operation to occur before that.
Ian Gascoigne is a dispute lawyer and legal trainer. Ian is also a member of LexisPSL’s Case Analysis Expert Panels. If you have any questions about membership of these panels, please contact firstname.lastname@example.org.
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