E-disclosure—a technological arms race for litigators

Dispute Resolution analysis: How can law firms make the most of technology in the disclosure process? Adrian Palmer, chief executive officer at Proven Legal Technologies, explains how the latest technology can give law firms an advantage over the other side.

Why do you think e-disclosure consultancies became so relevant?
All the procedural changes that have been coming along have been playing towards our strengths. The early part of the commercial litigation timetable, after proceedings have been issued, is now very compressed. In 2010 when the Civil Procedure Rules 1998, SI 1998/3132 PD 31B (CPR) came into play, it was an attempt by the courts to try and get parties organised with their disclosure as the process had started to become problematic. Parties were trying to deal with disclosure towards the end of the timetable and by that point they simply had too much to do so the process had become shambolic.

CPR PD 31B was designed to get lawyers talking to each other on important aspects of the disclosure—systems, document types, etc—and to start to agree about the disclosure process early on.

What does the involvement of a consultancy in e-disclosure offer?

Thrusting litigators do not necessarily speak ‘IT’. Despite CPR PD 31B having been around for some time now, I still see a lot of dreadful electronic disclosure questionnaires (EDQs) and think that sometimes fee earners are not the best people to be talking to their clients about what IT systems they have. E-disclosure providers are instructed to have that technical conversation with IT teams to ascertain:

• the types of data available
• the systems involved (and how they have evolved)
We will then use this information to go through a ‘data mapping’ process for the relevant time period.

This initial exercise goes beyond simply firing off a written questionnaire to an IT department as one answer to a question might set you off down a completely new line of enquiry. By fully questioning the IT team, we can ensure a firm foundation for the disclosure exercise. We are often asked to draft the EDQs on behalf of the firms as it is a complicated document which can include a large amount of technical language. It might be that the other side has also instructed an e-disclosure provider and we might have a meeting to iron out the finer details.

From data-mapping and EDQs, an e-disclosure provider can then be involved in the negotiations on how we can limit the boundaries of our disclosure exercise as the overriding objective of the CPR is to conduct the case in an efficient and cost-effective way. So these arguments of proportionality are ones that are constantly on our lips. We might, for instance, argue that it is not proportionate for us to analyse back-up tapes because we have an archive that covers that period so it is not necessary. Occasionally we have grey areas where it is debatable whether we should or we should not and that’s where I and some of the senior members of the team will get involved in drafting witness statements and going along to case management conferences (CMCs) and actually talking to the judge about it and explaining why our position is unimpeachable and why the other side’s position is adding costs for no material benefit. From my experience, the number of times I’m asked to attend CMCs or brief Counsel has increased dramatically over the past three years.

How has disclosure changed following Jackson?
Litigation in general has become even more pressurized since Jackson. In many cases we have to put together an estimated budget for standard disclosure which needs to be filed as part of the Disclosure Report at least 14 days before the first CMC. This means we have to do a lot of work prior to the CMC to ascertain which systems we need to review and the appropriate method of interrogating that data. We may take a sample of the data and understand its responsiveness to criteria that are designed to determine relevance. We are then able to extrapolate that work to the total disclosure project to get a view on the full cost of disclosure so that the estimate is as accurate as possible.

Have there been any instances where the court has found fault with a party’s approach to the budgeting process?
The judges recognise that this is an estimate. Aikenhead LJ, shortly after his important judgment in Phaestos Ltd v Ho; Ikos CIF Ltd v Gover [2012] EWHC 2756 (QB), [2012] All ER (D) 250 (Oct), where he threatened an Unless Order, was invited to speak to the Society of Computers and Law on the new rules. In that speech Aikenhead LJ made it clear that the estimates were exactly that, estimates, but that parties were expected to have performed adequate due diligence and considerably more than a ‘fag packet exercise’ in the corridor before the hearing.

The importance of this initial estimate comes to the fore when a party seeks to add to their estimated budget. If someone comes before a judge and can clearly demonstrate the work they undertook in reaching their initial budget—systems analysis, the EDQ, testing, communicating with the other side—then asking to expand the estimate is a much easier task as they can explain why the additional costs were unexpected. However, a quick calculation in the corridor will not provide you with sufficient evidence to support your application. This is important as, following Mitchell (Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537, [2013] All ER (D) 314 (Nov)), it means you could lose the opportunity to claims those costs from your opponent should you win.

The judiciary are becoming much more critical of poor preparation, lacksidaisical behavior and shambolic processes and are willing now to impose wasted costs orders—as highlighted by cases such as West African Gas Pipeline Co Ltd v Willbros Global Holdings Inc [2012] EWHC 396 (TCC), [2012] All ER (D) 60 (May). Although the judiciary are increasingly live to e-disclosure, I would like to see more intervention in day-to-day cases from some judges who still see disclosure as a bit of a sideshow.

There are signs of nerves among law firms concerning the costs budgeting process and their premiums for professional indemnity insurance and more and more firms are becoming painfully aware of the costs of mistakes. However, the costs extend beyond pounds, shillings and pence when you consider the impact mistakes can have on a firm’s brand, reputation and goodwill.

How are Counsel taking to this?

Surprisingly well. Those who feel they know something about this area are happy to debate the grey areas but most actually have said that they require the input of the technical specialists and in some circumstances they would have struggled to argue effectively without having a specialist who speaks the right language providing input or sitting in on the CMC.

Has e-disclosure increased the focus on tactics in litigation?
Where in the past we might have identified a weakness in our opponent’s proposal for disclosure, there was a hesitation whether to do anything about that as people would fear for throwing stones while they were in a glass house themselves. However, now firms are thinking ‘let’s go for it, let’s make it tactical’ and put pressure on our opponents.

I am of the opinion that this is in the client’s best interests because I see efficiencies creeping in left right and centre. Previously firms would take a belt and braces approach and process vast amounts of data through lack of understanding. Now, this more sniper-like approach is making it such that lawyers don’t have to review as many documents. Coupled with things like technology-assisted review and other advances, this saves large amounts of money for clients.

What are the challenges in ensuring e-disclosure remains CPR compliant?
It really isn’t rocket science when you acknowledge that:

• it is all one massive grey area in that what may be proportionate for one matter may not be for another, and
• there is no such thing as a perfect disclosure exercise
One word jumps out of CPR, Pt 31—reasonable. This is part of the reason why we keep an audit trail of our work, to ensure that we can show that, at the time at which the exercise was undertaken, our actions and decisions were reasonable.

Litigation is increasingly a global game, how does this influence e-disclosure?
There is a real need to be live to the potential issues of transferring data across jurisdictions.

Because data can be hosted on servers around the world we have to be very careful and ensure we know what servers, in which jurisdictions, we are dealing with. Not only are there personal data protection issues in moving personal data between jurisdictions that won’t necessarily protect it to the same degree, there is also the concept that if lands in, for example, a server in Wisconsin, the US government might want to subpoena it for some reason.

To tackle the jurisdictional issue and the concerns over the different legal protection of data when transferred across jurisdictions, we have the ability to send a team in-country to set up platforms rather than transfer the data wholesale out of the jurisdiction. This ensures that only responsive data, that which is relevant to the issue at hand, would be taken out of country.

An e-disclosure provider plays an important role of ‘gatekeeper’ to the information. A number of times we have been sent the wrong email boxes, or information that should be analysed is missing from data files—without specialists examining the flow of information, these mistakes can be missed until well into the review process.

What can law firms do to best manage the e-disclosure process?
The most important thing is time. If we are instructed then it is essential we are involved as early as possible so when we get to proceedings it is a far-more calm and measured process leading up to the disclosure exercise rather than a panicked scramble. We still get calls from firms three weeks before the first CMC and we know from that point we have an awful lot of work that needs to be done in a short period of time. Late instruction makes the process more expensive, more ‘high octane’ and more likely that mistakes will be made.

Often people think that disclosure is simple. However, it is becoming far more complicated and parties are becoming much more willing to start throwing stones at each other when they get it wrong. This is introducing a sort of tactical component to the litigation.

What is the experience from the US?
The US adopted e-disclosure and e-discovery before Europe. However, it’s good to see the tail wagging the dog in that the Federal Rules of Civil Procedure have been changed to effectively mirror many elements of what we’ve come up with in the UK. So a lot of the things we’ve designed here have been adopted in the US. However some things will never change—US litigation is more intense and the concept of making a search of documents and handing over whatever supports or undermines my case to the other side is still seen as ridiculous to a US litigator. They would much rather that the other side ask them for documents that damage their client’s case than volunteer them.

Where do you see e-disclosure in five years’ time?
Although there have been a couple of quantum leaps in the surrounding technology, for example conceptual searching, the development of this sort of technology sticks more to the Japanese principle of Kaizen—small steps towards continual improvement .

Until somebody produces a magic wand that structures data within a client’s IT systems there will always be a need to search electronic documents and in that respect at least I don’t see it being materially different from now.

Interviewed by Guy Skelton. The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.

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