Litigation costs come under scrutiny with launch of new e-disclosure regime

New practice directions (PD) on electronic disclosure aimed at speeding up the litigation process and reduce legal costs come into force today.

The rules have come in almost a year after Lord Justice Jackson recommended there be a ’menu’ of disclosure options available to litigating parties in his review of civil litigation costs.

Under the new regulations, litigating parties will be required to complete an electronic documents questionnaire that is intended to encourage litigators to be transparent about their proposed method of e-disclosure and set out exactly what each litigating party expects of the opposing party.

In England and Wales, the costs associated with disclosure typically account for about 30 per cent of the total cost of an action.

This was highlighted in BSkyB’s long-running dispute with Electronic Data Systems. The case, in which Herbert Smith partner Ted Greeno represented the broadcaster, saw BSkyB secure £318m from the defendant.

However, the trial took 110 court days to be heard and involved nine barristers, more than 500,000 documents and 70 witnesses and costs were thought to exceed £70m (9 June 2010).

At the High Court hearing of Digicel v Cable & Wireless (April 2008), which Slaughter and May went on to win for the defendants, Mr Justice Morgan ordered Cable & Wireless to re-do its disclosure exercise at an estimated cost of £2m. 

Allen & Overy litigation support manager Vince Neicho, who sat on the e disclosure working party chaired by Senior Master Steven Whitaker, commented: “Lawyers will go through the questionnaire with clients. It’ll look at where the starting point is, the extent of document exchange.

“It’s about active case management and having partners agree on what needs disclosure between them.”

The new rules also aim to end tactical manoeuvring on the mechanics of disclosure. The onus is on the parties involved to consider disclosure exercises at a much earlier stage.