New discovery process in the High Court: High Court Amendment Rules (No 2) 2011

Discovery is a large part of litigation whereby one party lists, and makes available, relevant documents to the opposing side. 

A recent amendment to the High Court Rules regarding the discovery process has meant that the steps for disclosing documents to the other parties in Court proceedings changed considerably from 1 February 2012. 

The District Court has also adopted the High Court Amendment Rules (No 2) 2011 ("the new Rules").

Principles of the new Rules

The key principles under the new Rules are: 

• Co-operation; 
• Proportionality; 
• Practical arrangements; 
• Use of technology; 
• Case management. 

Overall, the new Rules are designed to reduce disproportionate costs and delays caused by discovery as well as reducing the tactical use of disclosure. 

Key changes

Co-operation

Parties must cooperate to ensure discovery is proportionate and as practical as possible. Parties are encouraged to agree on the arrangements, particularly how documents will be listed and the format for exchange. 

Preservation of documents

As soon as litigation is “reasonably contemplated”, prospective parties must take all reasonable steps to preserve documents that are reasonably likely to be discoverable. This includes keeping all emails, correspondence and documents which relate to the issues. 

Initial disclosure

A party must make “initial disclosure” of key documents when preparing a Statement of Claim, Notice of Defence or other originating document. 

For example, where a contract is relied on in a Statement of Claim then it should be attached to that document when filed and served. 

Exchange of documents

Previously, documents disclosed to the other party in Court proceedings were usually exchanged in hard copy. This led to considerable paperwork and finding specific documents could be like finding a needle in a haystack. The default position under the new Rules has now changed and documents are to be exchanged in electronic format. 

This ties in with the focus on the use of technology under the new Rules. The general idea is that wherever technology can reduce costs and effort, and increase efficiency, then it is strongly encouraged by the Courts. 

That said, given that the overarching goal of the new Rules is to make discovery as easy as possible for the parties, the parties can agree on whatever method of exchanging documents suits the proceedings. 

Parties’ obligations

The result of these changes is that there are now a number of obligations on lawyers and parties to a dispute. Those obligations apply as soon as litigation is “reasonably contemplated” so this will generally be some time before Court proceedings are commenced. 

Parties must keep all documents, both electronic and hard copy, from such time as litigation is “reasonably contemplated”. The definition of this is not set out in the new Rules and will no doubt be tested through the Courts. 

A clear example of when litigation is reasonably contemplated is where one party formally records, in writing, an intention to take a dispute to Court if settlement cannot reached. This would clearly put the other party on notice that litigation is being considered. From that point onwards (at least), both parties would be required to keep all documents which may be relevant to the dispute. 

The obligation to keep documents is ongoing throughout the Court proceedings for both parties and their legal counsel. It is also important to note that for companies or other entities who are parties to Court proceedings, the obligation applies to all employees or representatives of the entity (not just the person responsible for dealing with the dispute). 

Consequences for breach

Where those obligations are breached, the consequences are dependent on the extent of the breach but include: 

• Order for particular discovery; 
• Costs order against the party in breach;
• Adverse evidentiary inference by the Court based on the failure to keep documents; 
• Punishment for contempt under the Court’s inherent jurisdiction; and
• Criminal penalties under the Crimes Act. 

Timeframes/transition

The new Rules came into force on 1 February 2012. From that point onwards the new Rules apply to:

• All new proceedings brought before the Courts; and
• Any proceedings currently before the Court with discovery orders made after 1 February 2012. 

Matters that were already before the Court on 1 February 2012 with existing discovery orders continue under the old Rules unless and until new discovery orders are made. 

Renika is an Associate in our Dispute Resolution Team and can be contacted on 07 958 7429.