Summary
- In UK litigation, disclosure requires parties to provide all relevant documents to the other side, including documents they intend to rely upon, documents that adversely affect their own or another party’s position, and any documents the court directs; the definition of “document” is broad and includes emails, texts, audio recordings, and handwritten notes.
- Parties must file a formal disclosure statement on Form N265, signed by a senior person within the organisation, confirming compliance with disclosure obligations; failure to disclose adequately can result in court sanctions, cost penalties, and adverse inferences.
- Disclosure and inspection are distinct concepts – a party must disclose the existence of all relevant documents, but may withhold certain documents from inspection where legal advice privilege applies; however, privilege does not remove the obligation to list the document’s existence.
- This article is a plain-English guide to disclosure obligations in litigation for UK businesses, prepared by LegalVision, a commercial law firm.
- LegalVision specialises in advising clients on commercial litigation and dispute resolution.
Tips for Businesses
Implement a litigation hold as soon as a dispute is reasonably anticipated – do not wait for formal proceedings to commence. Search all electronic storage systems, including mobile devices, cloud storage, and archived data. Ensure a senior person with sufficient knowledge signs the Form N265 disclosure statement. If you believe documents may be privileged, seek legal advice before withholding them from inspection.
If your business is involved in litigation, you may have to disclose certain information to the other party in the dispute. The obligation to disclose all relevant documents to the dispute is at the heart of most litigation. The court adopts a broad definition of what is a ‘relevant document’ to include any document that is helpful to the other side or adverse to the party making the disclosure. This article will explain what a relevant document is so that you can understand what your obligations might be under a disclosure order.
What is Disclosure?
Disclosure is the stage of litigation where one party provides the other party with all documents relevant to the dispute. This is a vital stage of the process because this is often the point where the claimant can review what evidence the defendant has. In some cases, this may assist their claim. In other cases, the claimant may withdraw the case once it reviews evidence that weakens its position.
The disclosure can be a lengthy process, especially in complex cases. Often, your lawyer can give you a good idea about the prospects of your claim after the disclosure process ends. Therefore, a party might come to an early settlement with the opposition following an inspection during disclosure.
Managing Electronic Documents and Data
Most business communications now happen electronically. This can create significant disclosure challenges. Parties must conduct reasonable searches of electronic storage systems. These include company servers, individual computers, mobile devices and cloud storage platforms. Searches may also cover backup systems and archived data containing relevant documents.
Email chains can be particularly complex. Forwarded emails may contain multiple relevant communications within a single thread. Companies should apply litigation holds as soon as they become aware of a potential dispute. This can help prevent automatic deletion of electronic documents. The duty to preserve documents can arise before formal proceedings begin. It may start as soon as parties reasonably anticipate litigation.
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Disclosure Statements and Compliance
When providing disclosure, parties must file a disclosure statement using Form N265. This includes a formal declaration confirming they understand and have met their disclosure obligations.
A senior person within the organisation must sign the statement. They should have authority and knowledge of the relevant documents. The person signing takes responsibility for the adequacy of the search. They may face consequences if the disclosure is inadequate.
Courts take these statements seriously. If relevant documents appear later, the other party may seek further disclosure. The court may also impose sanctions.
What Documents Do I Need to Disclose?
Under standard disclosure rules, the party subject to the disclosure order must disclose all documents:
- it intends to rely upon;
- that either adversely affect its position, adversely affect another party’s position, or support another party’s case; and
- the court otherwise requires.
A document is anything in which information of any sort is recorded. This is an incredibly wide-reaching definition. Therefore it includes:
- emails;
- hard and soft copies of reports and memos;
- audio and video recordings;
- handwritten and typed notes; and
- texts and other instant messages.
What is a Relevant Document?
We know there are three broad categories of relevance when identifying documents for disclosure. We will consider some examples of each:
| Category | Example |
| Documents you intend to rely upon. | Suppose you are defending a claim for non-payment of goods. However, you withheld payment because your goods were delivered in an unusable state. You have pictures and emails proving this, which you intend to raise at trial. You must disclose these documents. |
| Documents that adversely affect your position, the position of another, or support another party’s case. | This is widely defined to ensure that you disclose any documents that might affect the strength of any party’s claim. As in the above example, if you have documents showing that the goods were damaged by the carrier and not the seller, such documents might adversely affect the claimant’s position. Alternatively, it might shift the payment burden onto you, which may mean you are liable for non-payment. |
| All other documents, as the court directs. | The court has wide-ranging powers to compel disclosure and inspect any documents it sees fit. Sometimes, such documents may not fall into the above two categories. |
What is the Difference Between Disclosure and Inspection?
It is worth pointing out that the law distinguishes between disclosure and inspection. Disclosure is where one party searches for all relevant documents and then lists these in a document (Form N265), which serves the other side. On the other hand, inspection is where the other party reviews the documents disclosed.
A typical example of this is any document protected by legal advice privilege. For instance, suppose you obtained legal advice regarding your potential liability under a contract to purchase goods. At the meeting, you took notes. Because these notes relate to advice you received from your legal advisers, you may be able to assert privilege over the documents. While you still have to disclose it by listing the document’s existence in Form N265, the other side may not get to look at its contents.
This guide outlines how to resolve commercial disputes.
Key Takeaways
Disclosure in litigation refers to the process where the defendant (typically) provides a list of all relevant documents to the claimant. Of these documents listed, the defendant specifies which documents it will permit the claimant to inspect. It may withhold certain documents from inspection, such as where they are protected by privilege. However, the question of privilege does not change the fact that the court requires a defendant to disclose all relevant documents. This describes all documents that the defendant intends to rely upon which adversely affect the claimant’s case. It also describes documents that the defendant is in control of, which adversely affects its case.
Managing electronic documents presents particular challenges, requiring comprehensive searches across all digital storage systems and implementation of litigation holds to prevent automatic deletion. Additionally, parties must complete formal disclosure statements on Form N265, with senior personnel taking responsibility for compliance – failure to adequately disclose can result in serious sanctions, including cost penalties and adverse inferences.
If you have any questions about disclosable documents, LegalVision provides ongoing legal support for all businesses through our fixed-fee legal membership. Our experienced dispute lawyers help businesses manage contracts, employment law, disputes, intellectual property, and more, with unlimited access to specialist lawyers for a fixed monthly fee. To learn more about LegalVision’s legal membership, call 0808 196 8584 or visit our membership page.
Frequently Asked Questions
What is a disclosure obligation?
If you are subject to a disclosure order during litigation, you have some disclosure obligations. Under standard disclosure rules, these generally include disclosing all documents you intend to rely on, notwithstanding whether they adversely affect you or another party’s position.
What is specific disclosure?
Specific disclosure is a kind of disclosure order a court can make. A specific disclosure requires one party to search for and disclose specific documents.
What happens if I accidentally destroy relevant documents before disclosure?
If documents are destroyed accidentally after litigation is anticipated or commenced, the court may draw adverse inferences against the party who destroyed them. However, if destruction occurred in the ordinary course of business before any dispute arose, this typically will not result in sanctions. It’s crucial to implement litigation holds as soon as potential disputes become apparent.
Can I claim privilege over documents created by third parties?
Generally, privilege only applies to communications between you and your legal advisers or documents created for the dominant purpose of litigation. Documents created by third parties, such as expert reports commissioned by the other side, are usually not privileged in your hands. However, documents you commissioned from third parties for the purpose of obtaining legal advice may be covered by legal advice privilege.
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