In a recent judgment handed down in Genius Sports Technologies Ltd and others v Soft Construct (Malta) Ltd and others  EWHC 2637 (Ch), Mr Justice Marcus Smith concluded that a radical departure from the “standard” disclosure process was needed in this competition claim.
Motivated by concerns that relevant documents would be missed through standard disclosure, he ordered that an alternative process should be adopted instead. He did so despite acknowledging that such a process might be criticised (unfairly, in his view) as resulting in “massive overdisclosure”.
Whereas a disclosing party usually filters its documentation electronically to produce a limited body of relevant material for review as a first step, Mr Justice Marcus Smith proposed that the opposite approach should be taken; the disclosing party will filter out unequivocally irrelevant material, and allow the receiving party to apply its own search parameters to the likely vast remaining body of documents.
The judgment raises the question of whether this new process will be taken up in other cases.
Rationale for bespoke order
Originally, the Judge had directed that disclosure be conducted in accordance with the “standard” Civil Procedure Rules (“CPR”) Part 31 and Practice Direction (“PD”) 51U (now CPR PD 57AD), which governs disclosure in the Business and Property Courts. However, noting the carve-out for competition claims in paragraph 1.4(1) of PD 57AD, and the court’s ability to “direct otherwise” than standard disclosure absent any special case (CPR 31.5(1)(a)), he later directed that a bespoke disclosure process be implemented instead.
This is because disclosure can be a more difficult exercise for competition claims. It is not always immediately clear whether documents are relevant to the dispute, and the parties’ focus can change over the life of a case as they develop a better understanding of the alleged breach and wrongdoer’s conduct.
In this context, Mr Justice Marcus Smith took issue with the disclosing party’s usual first step in standard disclosure of filtering a body of documents electronically and discarding those which are deemed not responsive. In particular, he observed that many documents are discarded without ever being reviewed by a qualified individual. Furthermore, where the leftover documents are still too numerous for an “eyeball” review, the temptation is to use increasingly aggressive filters and risk discarding further potentially relevant material.
Mr Justice Marcus Smith concluded that the standard disclosure process would not work satisfactorily in the case at hand, or would only do so at excessive and disproportionate cost, as the parties could not be confident that no relevant material would be discarded through a normal disclosure process. Furthermore, he was satisfied that the bespoke process would protect privileged and confidential material, at proportionate cost.
The Court directed the disclosing parties to identify to the receiving parties the universe of documents to be searched, erring on the side of over-inclusion, and filter out documents that were irrelevant under the test for discoverability in the Peruvian Guano case, (1882) 11 QBD 55. The disclosing parties were to fully inform the receiving party as to the parameters of the electronic review, to allow it to test itself that the process was being conducted consistently with this objective.
Each disclosing party would then review the remaining documents for privileged material, ideally by “eyeball” review but realistically by a targeted electronic search (checked by a human agent), and prepare a statement setting out what had been done to exclude disclosure of privileged material.
Material was not to be filtered on grounds of confidentiality, as this information is often inherently relevant in competition claims. Confidential materials were to be produced to the receiving party for use solely in the proceedings and kept on a platform chosen by the disclosing party. Access to this platform would be restricted and monitored. Furthermore, access to specific documents would require approval from a King’s Counsel retained by the receiving party. Mr Justice Marcus Smith acknowledged that this “is quite an intrusive and possibly expensive obligation”, but explained that it was ordered “because of concerns raised by the claimants in respect of their confidential information”.
Mischief of document “dumping”
The claimants forcefully opposed the bespoke disclosure process, relying on the Court of Appeal’s decision in Nichia Corporation v. Argos Limited  EWCA Civ 741. In Nichia, the Court cautioned against the “downstream costs caused by overdisclosure which so often are so substantial and so pointless”. Furthermore, the Court warned “in cases of massive overdisclosure, that there is a real risk that the really important documents will get overlooked – where does a wise man hide a leaf?”
Whilst the Judge noted these criticisms, he downplayed the potential mischief of document “dumping”. He noted that the receiving party’s lawyers would have their own processes of electronic review which could be used in a much more targeted way, with parameters set by the receiving rather than by the producing party.
As to concerns regarding costs, the Judge noted that in spite of many reforms and attempts over the years to control them, such concerns continue unabated, and that Nichia was a relic from the era of the “photocopier” and “CD maker”, whereas sophisticated disclosure platforms were now available.
Whilst the Disclosure Pilot Scheme has only recently been permanently implemented, Mr Justice Marcus Smith’s judgment has demonstrated that the options for disclosure in the Business and Property Courts are by no means set in stone, and that the Court will implement bespoke regimes if it sees fit.
Mr Justice Marcus Smith considers that his revised approach simply shifts the burden of filtering documents from the disclosing to receiving party, and that he has suitably mitigated parties’ confidentiality and privilege concerns. However, critics may argue that it risks significantly increasing the time and cost incurred in the disclosure process.
Whilst technology (including tools for electronic document review) has developed significantly since Nichia was decided, there has also been a proliferation of electronic documentation, creating all the more material for review in disclosure processes. Moreover, parties will naturally be extremely concerned not to inadvertently disclose privileged documents, and likely want to carry out thorough pre-disclosure reviews to avoid that. They may also be unhappy with the requirement to disclose all of their confidential material (whether relevant or not), notwithstanding the opposition’s duty to only use this information for the purpose of the dispute. Whilst this approach admittedly minimises the time and costs involved in negotiating confidentiality clubs and reviewing confidential documents for redactions, appointing King’s Counsel to control access to this sensitive material will come at a cost, and significant faith is being placed on the parties to use this information appropriately.
Ultimately, though, the success or failure of this bespoke approach will depend on whether receiving parties are able to manage, filter and review the universe of documents they receive in a time and cost-effective manner. If that proves to be possible, the benefit of ensuring that potentially relevant documents are not inadvertently filtered out may outweigh these other concerns, and could change significantly the approach adopted to disclosure in commercial disputes.