The Disclosure Pilot: AAH Pharmaceuticals Ltd and another v Jhoots Healthcare Ltd and another [2002] EWHC 2524 (Comm)

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17 October 2020

This is the transcript to my latest Weekly Law Review vlog which is available on my LinkedIn profile and my YouTube channel.

The Business and Property Courts’ Disclosure Pilot has been in place since the 1 January 2019. Dealing with disclosure is one of the most expensive aspects of preparing a case for trial.  The aim of the pilot is to encourage more cooperation between the parties, and to save time and costs.

It’s fair to say that the Pilot has not been welcomed with open arms. This was confirmed in the Mulheron Report, a survey conducted last year, which reported that most lawyers had not responded favourably to the pilot.

The Pilot was the subject of the judgment which was handed down in the case of AAH Pharmaceuticals v Jhoots Healthcare Ltd on 23 September 2020.

The facts of the case are as follows. The claimants are wholesalers of pharmaceutical products and they sold their products to the defendants who dispensed them in their stores.

The Claimant alleged that defendant had acted in breach of contract. The relevant clause of the contract dealt with the prices at which the products were to be sold. The parties were also in dispute about whether the claimants’ terms and conditions were incorporated into the contract.

The parties had agreed 22 issues for disclosure. However, they were unable to agree the range of dates, whether different keywords should be used for different issues, and various other issues about keyword search terms.

The parties referred these points to the court for guidance. Amongst other things, the judge ordered that different sets of keywords could be adopted for different issues as opposed to using one generic set of keywords across all of the issues.

After the hearing, the parties went away and made some progress, but they were still in disagreement about how the keywords should be applied. The claimants wanted to split the issues into groups which had similar search criteria and dealt with similar subject matter. The defendants wanted to run a single set of keywords against each issue.

This disagreement generated a significant amount of correspondence. The parties failed to reach agreement, the claimants’ stated in that they would not engage further on the issue  and the defendants made an application to court to vary the disclosure order.

Paragraph 18 of the Pilot allows the parties to apply to court for an order that varies an order for Extended Disclosure. To succeed, the applicant must show that the variation is “necessary for the just disposal of the proceedings and is reasonable and proportionate”.

A different judge heard the application. The judge stated that, had he dealt with the Disclosure Guidance hearing, he would not have endorsed the defendants’ approach to applying one generic set of keywords across all of the issues.

However, the most interesting aspect of the case, in my view, was the Judge’s comments about the parties’ approach and conduct.

The judge reminded the parties of the provision of Practice Direction 51U, paragraph 2.3, which provides that the, “court expects the parties to cooperate with each other and to assist the court so that the scope of disclosure… can be agreed in the most efficient way possible”.

What was particularly striking was what the judge said about the interparty discussions. The judge commented that, it was not helpful, “to engage in confrontational or point scoring correspondence” and that, “the parties should try to conduct their discussions face-to-face rather than in correspondence. A weekly telephone call would be a minimum in the current situation. It is important to have some record of what is being done, and for arguments to be put. But set piece letters are not always the best way of promoting a collaborative approach”.

The judge highlighted the root cause of my concerns about the Pilot. Completing the Disclosure Review Documents is probably a useful exercise, because it helps the parties to give some sensible thought to what they want to achieve from the disclosure exercise. This is particularly useful for cost budgeting purposes, because the parties can stipulate the budget for disclosure after the Disclosure Review process has taken place.

However, I think the temptation for some lawyers to use the provisions of the Pilot as an opportunity for point scoring and lengthy letter writing, is too much for some. In my view, there will need to be a significant shift in culture before all litigators will be, say, encouraged to pick up the ‘phone to try to agree points sensibly with their opponent. I’d be interested to hear your views. Please do get in touch.

If you have any queries or comments about this case please do get in touch and you can see all of my vlogs on my YouTube channel.

© Melissa Worth 2020

The Dispute Adviser

A legal blog by Melissa Worth
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