In Agents’ Mutual Ltd v Gascoigne Halman Ltd and another, Marcus Smith J dismissed the claimant’s application for extended or additional disclosure but not without making comments about the mandatory Disclosure Pilot Scheme (DPS) pursuant to PD 51U operating in the Business and Property Courts until 31 December 2020.
The claimant issued proceedings in February 2016 in the High Court Chancery Division. Competition law issues in the case were transferred to the Competition Appeal Tribunal (CAT), whereas non-competition issues remained in the Chancery Division for later adjudication.
CAT’s July 2017 judgment dealt with the competition issues, the rulings on which were upheld on a later appeal to the Court of Appeal. A five day trial has now been listed before Marcus Smith J in March 2020 to determine the outstanding non-competition issues.
In early October 2019, the claimant applied for extended disclosure, or the disclosure of specific documents or classes of document. At the hearing of this application on 30 October 2019, Smith J dismissed the application.
Smith J noted that standard disclosure had already been carried out by the parties during the course of determining the competition law issues, but was careful to emphasise that that disclosure had been general and not confined to the competition issues. Smith J highlighted that since the determination of the competition issues, the scope of the proceedings had changed. A second defendant, Connells, had been joined in addition to the first defendant, Gascoigne Halman. As such, and also because the claimant amended its pleaded case against the first defendant, the extent of issues in dispute had increased. These two procedural steps were allowed by an earlier procedural order of Smith J in February 2019, which also provided for standard disclosure.
In his judgment, Smith J applied the decision in UTB LLC v Sheffield United Ltd, which provided that the DPS applies to all relevant existing proceedings, including where a disclosure order had already been made under CPR 31, before the DPS came into force on 1 January 2019. As such, Smith J ruled that his earlier February 2019 order should have been made on the basis of extended disclosure.
Smith J was satisfied that the claimant’s application was misconceived, in that the disclosure sought was not actually relevant to the pleaded issues in dispute. More pertinently, Smith J reached the view that, when formulating its application, the claimant had not thought through how specific disclosure would be given by the defendants. The assumption (of the claimant) underlying this part of the application was that, having identified the documents or classes of document in question, the defendants could locate these documents.
Smith J was not given over to the claimant’s criticisms of the defendants’ methodology of carrying out searches for documents. He pointed out that in this case there was an unmanageable number of documents, more than two million. The defendants had managed to reduce that document set to a much more manageable 30,000 documents. They had done so by using keyword searches followed by a manual review of the resulting data set. Smith J ruled that one relevant question to be answered was whether or not the defendants had carried out a reasonable and proportionate search. He was fully mindful of the claimant’s argument that a different keyword search might have resulted in different documents being identified, but he ruled that any better result was not necessarily going to be produced.
Judge’s reflections/observations about Disclosure Pilot Scheme
Smith J noted that neither side had communicated about search methodology nor search terms before that methodology was actually implemented, although the defendants partly corrected this failing by taking into account suggestions made by the claimant. Notwithstanding this failure to co-operate, Smith J emphasised that this reason did not lead to his dismissal of the application.
Smith J also referred to the judgment in UTB LLC v Sheffield United Ltd whereby the DPS was designed to encourage reasonableness and proportionality with disclosure being directed specifically to defined issues arising in the proceedings.
Smith J concluded that it had to be correct that extended disclosure followed initial disclosure, usually standard disclosure. He went on to say that extended disclosure involved consideration of the very clear models described in PD 51U. In instances where documents are or are going to be placed onto a document platform with a view to conducting electronic searches, then that is a factor that must be built into the manner in which disclosure is to be conducted, whichever disclosure model is ordered. In any event, it is essential that such electronic searches are not conducted unilaterally, but with the parties engaging with each other with a view to agreeing precisely how the electronic search is to proceed. Smith J accepted that framing electronic searches is a difficult process likely to be informed by trial and error. But such a search, when actually conducted, may very well produce too many or too few hits. In which case, in an iterative and co-operative way, the process of re-framing the electronic search process must be done again. It is important that this process be completed before any manual review is undertaken: it is the manual review that costs time and money, not the multiple re-runs of electronic searches.
Practical implications for practitioners
Given Smith J’s reflections and thoughts, parties’ lawyers clearly have to engage when one party is being asked to carry out electronic searches for documents. There should be agreement about the scope and extent of such searches, bearing in mind proportionality.