Disclosure: A duty to Seek, Not Hide
Shoosmiths - England
What is disclosure? It is the stage of a dispute when each party is required to disclose to the other party the documents relevant to the issues in dispute. It normally takes place after each party has set out its position in their statement of case.
The purpose of disclosure is to make available to all other parties, and ultimately to the court, evidence which either supports or undermines the respective parties’ cases.
Disclosure involves three key stages:
The parties must undertake a reasonable and proportionate search for documents in their possession or control relating to the issues in dispute, including information held electronically (e-disclosure). This is interpreted very widely by the courts – for example it can include deleted emails, even the hidden metadata attached to each document to establish the history of the document itself, or documents in the possession of former employees.
Next, each party must provide a list of the relevant documents to the other party – the court will usually order ‘standard disclosure’, but can order specific disclosure of any document if appropriate. Standard Disclosure requires a party to disclose not only the documents upon which it relies to support its own case but also:
- documents that affect its own case adversely
- documents that either support or affect the other party’s case adversely
Where there are likely to be a significant number of electronic documents, the parties must discuss the issues in dispute to agree the scope of the search. It may be necessary to instruct forensic IT experts at this stage to assist with the data search which can include the use of ‘key word searches’ or ‘issue mapping’.
Relevant documents must be disclosed whether or not they are confidential. Should a document contain sensitive information which is little or no relevance to the dispute, or where legal privilege from disclosure is claimed, then that information can be blanked out, (redacted). We will address the issue of privilege in detail in next month’s briefing note.
Inspection of the documents and electronic data – again it may be necessary to involve experts at this stage to put the documents into a manageable electronic format. We find that the courts are increasingly expecting the parties to adopt a co-operative approach here.
The Importance of getting it right
A list of documents will include a disclosure statement, which is typically signed by the party making disclosure and/or the party who supervised the search for documents.
The disclosure statement must set out the extent of the search made by the party and certify that the person signing the statement understands the duty to disclose documents, and that they have complied with that duty. Proceedings for contempt of court may be brought against a person if they make a false disclosure statement without an honest belief in its truth – which reinforces the fundamental importance of getting it right!
In the event that either party is dissatisfied with the disclosure given by the other, or has concerns about the extent of the search or the documents disclosed, they can make an application to the court for an order for disclosure of a specific category of documents – specific disclosure.
In the event that documents come to light after the list of documents has been served, there is an ongoing obligation on the parties to continue to disclose relevant documents until trial.
Document preservation: Practical steps to consider
At the outset, or in anticipation, of a dispute, steps should be taken to ensure that relevant documents are properly protected.
Parties to a dispute must not destroy, overwrite or modify any relevant documents or data, including back-up tapes that contain electronic data such as emails. The ordinary document retention practices should be suspended in order to preserve potentially relevant information for both paper and electronic documents. The following suggestions may assist.
Develop a document preservation team:
The business should nominate an individual or team, including a director or senior manager, to take responsibility for gathering, cataloguing and protecting all documents and data, comprising:
- a key employee from the business units affected by the litigation or investigation
- an employee from the IT and/or document management team
- an in-house lawyer or external solicitors
This team should determine what hard copy and electronic data is available, and how best
to preserve it in a cost-effective and proportionate way. Documents located should not be marked or altered in any way and documents within files should not be rearranged.
Develop a document preservation plan which:
- identifies the key people associated with the subject matter of the dispute: and
- identifies where the relevant information may be stored (offices, emails, inboxes, back up tapes, servers, laptops)
Consider a Litigation Hold Notice:
Large organisations should consider issuing a Litigation Hold Notice to all of those responsible for document preservation which:
- provides a description of the subject matter of the litigation or investigation so that those responsible can determine if they have any relevant information; and
- states the importance of preserving potentially relevant documents and the consequences of not complying with the Notice; and
- sets out the date ranges and the type of documents and materials that should be retained
A senior manager or director should be tasked with monitoring and enforcing compliance.
What does this mean?
The disclosure process is fundamental to any dispute, and must be properly managed in order to secure the best possible outcome, and to keep control of the litigation costs.
What should you do?
- consider carefully the way that your organisation manages its documents
- consider a strategy for dealing with disclosure requests – whether in litigation or following a regulatory investigation
- develop clear document retention, destruction and creation policies
- once a dispute arises if in any doubt about how best to proceed, take early legal advice