Disclosure Pilot Scheme: What are known adverse documents?
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Under the Disclosure Pilot Scheme operating in the Business & Property Courts, disclosure extends to “adverse” documents and parties are required to disclose, regardless of any order for disclosure made, “known adverse documents”, unless they are privileged.
The relevant definitions are found in paragraph 2 of Practice Direction 51U.
A document is “adverse” if:
“it or any information it contains contradicts or materially damages the disclosing party’s contention or version of events on an issue in dispute, or supports the contention or version of events of an opposing party on an issue in dispute.” (see, paragraph 2.7 PD51U)
Known adverse documents are:
“documents (other than privileged documents) that a party is actually aware (without undertaking any further search for documents than it has already undertaken or caused to be undertaken) both:
(a) are or were previously within its control and (b) are adverse.” (see, paragraph 2.8 PD51U)
For these purposes a company or organisation is “aware” if any person with accountability or responsibility within the company or organisation for the events or the circumstances which are the subject of the case, or for the conduct of the proceedings, is aware. To this end, it is necessary to take reasonable steps to check the position with any person who has had such accountability but who has since left the company or organisation (see, paragraph 2.9 PD51U).
When do known adverse documents have to be disclosed?
Once proceedings have commenced a party is under a duty to disclosure known adverse documents, unless they are privileged (see, paragraph 3.1(2) PD51U). However, this does not mean that known adverse documents must be disclosed from the outset or even when Initial Disclosure is given (unless a document falls strictly within the relevant definition).
To identify when known adverse documents should be disclosed you must look at paragraph 9 of PD51U, which provides for two different scenarios.
Firstly, where an order for Model B, C, D, E Extended Disclosure is made, the time for production of known adverse documents is with that disclosure (ie they should be disclosed as part of Extended Disclosure) (see, paragraph 9.1 PD51U).
Secondly, in instances where only Initial Disclosure or Model A Extended Disclosure is ordered the parties must within 60 days of the first case management conference provide a Disclosure Certificate certifying that all known adverse documents have been disclosed. By extension, all known adverse documents should be disclosed by the expiration of this 60 day period (see, paragraph 9.2 PD51U).
The above timings were confirmed by the Disclosure Working Group prior even to the commencement of the Pilot Scheme.
The duty to disclose known adverse documents is a continuing one meaning that if adverse documents in the control of a party come to its knowledge at a later date they must (unless privileged) be disclosed without delay (see, paragraph 9.3 PD51U).
Further, where there is a known adverse document but it has not been located, the duty to disclose the document is met by that fact being disclosed, subject to any further order that the court may make (see, paragraph 3.4 PD51U).
What is the latest guidance from the court?
Until recently, it was unclear what steps parties were expected to take to discover whether they have any known adverse documents that must be disclosed.
In the decision of Castle Water Ltd v Thames Water Utlilities Ltd [2020] EWHC 1374 (TCC), the Technology and Construction Court clarified that parties are required to undertake reasonable and proportionate “checks” to see if they have or had known adverse documents. If a party has or has had known adverse documents it must undertake reasonable and proportionate steps to locate them.
A useful example of a party taking an unreasonable approach was referred to in the judgement. It was considered absurd if a party were able to say:
“I know I have an adverse document, but I don't know whether it is in the left-hand drawer or the right. I have therefore not located it."
Drawing a distinction between carrying out “checks” and “searches”, the court confirmed that each party should ensure that it has checked the position with the relevant persons with responsibility for the events or the circumstances which are the subject of the case, or for the conduct of the proceedings.
The court also confirmed that, where there is no material change to the proceedings, a party is not obliged to renew its checks on a continuing basis in order to satisfy its duty under paragraph 9.3 of PD51U.
FOOTER: This information is provided for general purposes only and does not constitute legal advice.
Photo by Robert Bye on Unsplash
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