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Disputes Eye: Disclosure reform – time to err off the side of caution

It takes a brave soul to tackle the issue of extortionate disclosure in the UK, and finding the happy medium required to satisfy both fretting clients and sceptical lawyers is difficult.

But that is exactly what the Disclosure Working Group is attempting to do, introducing a wave of reforms in November that will run as a mandatory two-year pilot across the business and property courts in the Rolls Building, starting in 2018 subject to approval from the Civil Procedure Rules Committee.

The group, which is chaired by Lady Justice Gloster and includes Simmons & Simmons partner Ed Crosse, Vodafone Group law chief Rosemary Martin and RPC partner Tim Brown, proposed scrapping the current regime in favour of ‘basic’ and ‘extended’ disclosure. The aim is to give the courts the final say if anything beyond the key documents necessary to each parties’ case needs to be disclosed.

Among the dissenters is Stewarts’ head of commercial litigation Clive Zietman (pictured), who says: ‘If you are going to limit disclosure in the ways that are being suggested, this becomes a less attractive forum’ and warns against ‘throwing the baby out with the bath water’.

Quinn Emanuel Urquhart & Sullivan litigation partner Ted Greeno is similarly sceptical. He argues that more refined disclosure – such as disclosure by issue – requires more senior lawyer input, adding to a client’s costs.

Crosse counters that it was clients who drove the reform process in the first place. The GC100 group raised concerns in 2016 that the tools for controlling disclosure costs proposed by the 2013 Jackson Reforms have been inadequate. One general counsel says the US is a lesson in how burdensome and expensive discovery can be and backs an interventionist approach by the courts.

If you remain unconvinced of the need to overhaul the UK’s disclosure system, look no further than the case study provided by Herbert Smith Freehills and its representation of RBS in the shareholder group action that settled this summer. Thanks considerably to a huge disclosure exercise, the firm racked up an eye-watering £129m in costs when defending the bank against shareholders who lost money following its 2008 rights issue, with Justice Hildyard describing the fees as ‘unreasonable and disproportionate’.

Despite some wariness of the proposals, a July survey of 280 UK litigators conducted by the London Solicitors Litigation Association and New Law Journal saw 72% of respondents describe the current disclosure regime as ‘not fit for purpose’.

But if reform is welcome it is crucial that the UK does not limit disclosure to the extent that it loses its competitiveness as a jurisdiction. As Crosse has pointed out, the current reforms are not inclined to do that.

How effective the reforms will be is unclear, but Crosse is certain that the courts will have punitive measures available to them to keep disclosure in line.

With previous attempts to tackle costs repeatedly proving too light-touch, it is time to try a more hands-on approach. A rigorous process attracts much business to the London courts but tolerance for escalating costs cannot be dismissed indefinitely.