Significant changes are being made to the way in which parties to litigation conduct electronic disclosure, known as ‘e-disclosure’. This Bulletin considers the changes and identifies other key amendments to the Civil Procedure Rules (CPR).
A new practice direction on e-disclosure will apply to all claims issued after 1 October 2010 that are (or are likely to be) allocated to the multi-track. It has been introduced to tackle two main problems.
The first problem relates to non-disclosure. Many litigants simply ignore e-disclosure, undertake inadequate searches for electronic data or fail to take adequate steps to ensure that such data is not deleted during the course of a case.
The second problem relates to over-disclosure. In top-end, high value cases, parties have started disclosing far too much electronic data, including significant amounts of material that is irrelevant to the issues that the court will decide. Parties have also been disclosing data in formats that can be difficult for a receiving party to access.
In two recent High Court cases the judiciary discussed the difficulties involved in e-disclosure. In Earles v Barclays Bank plc the defendant’s legal team was heavily criticised for its failure to give proper disclosure, particularly e-disclosure. The judge stated that it was “gross incompetence” for those practising in the civil courts not to know or follow the e-disclosure rules.
In Goodale v Ministry of Justice Senior Master Whitaker - who chaired the working party that prepared the new practice direction - gave a judgment containing detailed practical guidance on the correct approach to e-disclosure. He also ordered the parties to complete a draft version of the electronic documents questionnaire (discussed below).
The new practice direction aims to force parties to investigate the sources of their own electronic documents at an early stage in proceedings.
As soon as litigation is contemplated, the parties’ legal representatives must notify their clients of the need to preserve disclosable documents. The practice direction makes clear that this includes documents which would otherwise be deleted in accordance with a document retention policy, such as those held on IT back-up disks.
The parties must discuss e-disclosure issues before the first case management conference. In certain circumstances, the practice direction suggests discussions before proceedings are started. Discussions must cover:
- the information on e-disclosure issues that should be provided to the court before the first case management conference
- the extent of a reasonable search where electronic documents are involved
- the use of keyword searches to filter documents
- the disclosure of metadata (ie, data hidden within data, such as the version history of a document)
- the way in which disclosed electronic documents should be listed
- the format in which electronic documents are to be provided for inspection.
To encourage the parties to focus on e-disclosure and agree its scope, the practice direction includes a voluntary electronic documents questionnaire for the parties to complete and exchange. It includes questions about:
- the type of email system in use at the relevant time
- the media in which the party’s documents are stored
- whether the party had a document retention policy.
The questionnaire also asks each party to suggest a search method for its own data and that of the other party. The parties are asked about appropriate date ranges, target custodians, keyword searches and disclosure software. The questionnaire must contain a statement of truth and the person signing the statement must be present during any subsequent hearing at which e-disclosure is likely to be considered.
Changes are being made to the allocation questionnaire, which will ask directly whether the parties have agreed on the scope and extent of e-disclosure and, if not, whether agreement is likely. If no agreement is in prospect, all issues regarding e-disclosure must be set out in the allocation questionnaire. The court has the power to order parties to complete an electronic documents questionnaire and it is likely to do so where parties are unable to agree on e-disclosure management.
Many of the changes introduced by the new practice direction should help to improve the efficiency of the disclosure and inspection process, which may in turn help to reduce costs.
It is now explicitly recognised that documents should generally be made available for inspection in a form that gives the receiving party the same capability to review them as the disclosing party. This provision should prevent parties from deliberately disclosing documents in a format that is difficult to access or use.
The new practice direction also reminds parties that disclosure of irrelevant electronic documents may place an excessive burden in time and cost on the receiving party. The clear aim is to minimise the risk of tactical attempts to drown an opponent in unnecessary material - a familiar ploy in some US litigation.
The rules explicitly recognise practices which have long been used in large e-disclosure exercises, such as:
- restricting a search to particular date ranges
- restricting a search to particular custodians (eg, the inbox of one particular individual, but not another)
- using automated keyword searches in full or partial substitution for a manual search.
These are some of the issues that the parties are expected to discuss at an early stage.
The rules also provide a number of helpful default positions. One recurrent issue in e-disclosure is whether documents should be disclosed in their native file type or converted into another file type (usually an image file). Conversion strips out metadata, thereby saving review costs. It also makes it easier to black out confidential parts of a document. However, conversion always carries a risk that important metadata will be lost; it can also make it difficult to read the document properly. The rules provide that unless otherwise agreed or ordered, documents should be provided for inspection in their native file type; however, the parties can agree to exceptions. The rules also state that documents must be accompanied by any optical character recognition versions (ie, computer-produced text searchable versions of documents whose text could not previously have been searched automatically). If a disclosing party holds or creates such documents, the receiving party should be allowed to use them.
The rules specifically direct the parties to consider using the services of a neutral electronic repository for storing electronic documents. Although the implications are not considered in the rules, such a practice has the potential for significant cost savings. In addition to reducing administration costs, it allows parties to agree that duplicates in the two sets of documents are removed at an early stage. They can then agree not to disclose documents in the other party’s possession. This avoids wasted effort in considering whether to disclose documents that the other side already possesses.
The new rules present challenges to litigation lawyers and judges. In-house lawyers and managers of corporate litigation must ensure that they understand what data their company retains, how it is backed up and when it is deleted.
More than ever, lawyers must be comfortable designing and negotiating an e-disclosure plan for large cases. This will require an understanding of the technical issues involved in identifying, collating, sorting and reviewing large volumes of electronic data.
Judges may need to be more involved than the rules might suggest. Although the rules encourage the parties to agree on the issues and for the court to become involved only as a last resort, the issues in question are complex and agreement may be difficult to reach. If the parties risk being drawn into protracted negotiations, which would be costly for clients and contrary to the aims of the new rules, judges must have the confidence to intervene and impose their own views.
These issues are further complicated by the rate at which document review methods are developing. Software companies are developing tools capable of new processes, such as concept searching and clustering, that are likely to be used increasingly in document review exercises. Future rule changes may set out detailed guidance for the use of such tools.
Other CPR changes
In 2008, a pilot scheme in selected county courts introduced the concept of ‘automatic orders’, whereby the courts are permitted to make orders without judicial input in certain situations. In 2009, the pilot scheme was extended to all county courts and the High Court until the end of September 2010.
The forthcoming CPR update extends the scheme for a further six months. The scheme is set out in Practice Direction 51B and applies where:
- all parties request a stay of proceedings for one month, in which case the court will give effect to the request;
- a party fails to file an allocation questionnaire, in which case the court issues an ‘unless’ order, followed by an automatic strike-out of the claim or defence; or
- in cases with only one claimant and one defendant which are allocated to the fast track, a party fails to file a pre-trial checklist, in which case the court issues an ‘unless’ order, followed by an automatic strike-out of the claim or defence.
Costs management in defamation proceedings
In October 2009 a pilot scheme was introduced which applied to all new claims for libel, slander and malicious falsehood issued in the Royal Courts of Justice or the District Registry in Manchester. The forthcoming update extends the scheme for a further six months up to the end of March 2011.
The scheme is set out in Practice Direction 51D and requires parties to provide the court with detailed future cost estimates for the entire proceedings, based on a standard form. These must be updated regularly and the court will record its approval or disapproval of the estimates. The scheme also obliges solicitors for each party to liaise every month in order to ensure that the estimates are not being exceeded.
The aim is for the court to manage the costs of the litigation as well as the case itself, making use of regular costs management conferences.
The CPR updates will change the procedural requirements for applying to appeal a point of law arising out of an arbitral award. These are contained in Practice Direction 62. The changes primarily serve to restrict the type, length and scope of documents which may be put before the court.