Disclosure Guidance in The Chancery Division

United Kingdom

Earlier this month, Vos J., the Chancellor, presided over a hearing where the parties had “sought guidance from the court by way of a discussion with the court in advance of… a case management conference concerning the scope of Extended Disclosure.” The case is McParland & Partners Limited and another v. Stuart William Whitehead ([2020] EWHC 298). It was termed a “Disclosure Guidance Hearing (“DGH”)”.

The claimants were financial advisers. The defendant had worked for them and had then left following a takeover. The dispute arose out of what he had allegedly done with the claimant’s data and other matters on leaving. Initial disclosure had been given in accordance with the Disclosure Pilot scheme, (paragraph 5.1), the scheme which has been running now for just over a year. However, the parties had been unable to agree on what Extended Disclosure should be given (pars. 6 – 9). The judge used the opportunity to give guidance to the parties and other users of the Business and Property Courts.

The judge started by re-stating the factors to be taken into account in accordance with the requirement that Extended Disclosure must “be reasonable and proportionate having regard to the overall objective including", the factors being:

  1. the nature and complexity of the issues in the proceedings;
  2. the importance of the case, including any non-monetary relief sought;
  3. the likelihood of documents existing that will have probative value in supporting or undermining a party’s claim or defence;
  4. the number of documents involved;
  5. the ease and expense of searching for and retrieval of any particular document (taking into account any limitations on the information available and on the likely accuracy of any costs estimates);
  6. the financial position of each party; and
  7. the need to ensure the case is dealt with expeditiously, fairly and at a proportionate cost.

These are all well and good, and there is of course a reference to “the importance of the case”. It would have been even better however had the judge used this opportunity to spell out explicitly that the parties should tell the court how much was at stake. A clear statement of the high importance of the money element in assessing proportionality would have been helpful.

An express statement of the money in issue was given in another very recent case, Kings Security Systems Ltd v. King [2019] EWHC 3620 (Ch.). As recounted more fully by my colleague Sukhi Kaler in her article here very recently, the claimant was a family-run security and surveillance company. The defendant was the claimant’s former MD and CEO. The company claimed that he had accepted bribes from a fleet hire firm. In turn, he had counterclaimed for abuse of process, the proceedings having been brought for the improper purpose of obtaining his shares at an undervalue. Other disputes were going on between the parties, some resulting in separate litigation.

The hearing, believed to be the first, was about a request for “Model E” disclosure under the Pilot Scheme. In spite of the parties having agreed 90% of the issues, the Chancery Master told them to go away and do better. This has to be put in the context of the claimant’s costs at that stage being £579,000, and the Defendant’s £226,000. The amount of the claim? £120,000.

When the legal costs significantly exceed the money at stake – even at an interlocutory stage! – justice is not being done.