With the proliferation of digital communication, monitoring, searching for and disclosing relevant documents is becoming an increasingly complex, time consuming and, ultimately, costly exercise.
Compounding this difficulty, whether legitimately or otherwise, employees often blur the lines, using personal devices and servers for work communications, and work devices and servers for personal communications. This generates an increasingly prevalent problem for compliance departments and legal teams dealing with evidence and disclosure.
In this series, we discuss in this part one the challenges for commercial litigants in general. In part two, we consider the implications and practicalities from the perspective of regulated entities.
Evidence and disclosure in civil litigation
If parties engage in civil litigation in England, they are obliged to disclose relevant documents. This presents challenges if relevant documents have been sent on an employee’s or agent’s personal communication channels. Legal issues also arise if a party is hosting potentially relevant communications on business servers and devices, but (at least some of) those communications were made in a personal capacity and are confidential. This gives rise to significant practical challenges for lawyers and clients under obligations to search through and disclose relevant communications without infringing personal data rights. This is compounded if the documents might be subject to legal professional privilege which belongs to the employee and not the employer.
Whilst the practical challenges persist, the courts have recently addressed the legal issues in the context of disclosure in civil litigation. We discuss recent developments below.
Business communications on personal devices
The English court’s rules of disclosure explicitly contemplate the possibility that a former employee or agent might have copies of documents of which the litigant itself does not have a copy. The rules require preservation and disclosure of such documents. As a number of recent cases highlight this can present challenges where the documents are held on personal devices or servers.
In Fairstar Heavy Transport NV v Adkins and another  EWCA Civ 886 (Fairstar), a company’s former CEO held emails about the business affairs of the company on his personal computer. This arose as on termination of his position, emails sent to his work email address were forwarded to his personal email address and automatically deleted from the company’s servers with no copy retained. The relationship between the former CEO and the company was one of agent and principal. A principal has the right to inspect documents relating to its affairs held by its agent. As such, the company was able to require the former CEO to provide it with copies of the emails. The fact that the documents were electronic should not be allowed to obfuscate the simple point: if an agent held paper documents relating to the principal’s business, the principal would be allowed to inspect them. The Court of Appeal found that the same must apply to electronic documents.
In Phones 4U Ltd (In Administration) v EE Ltd and others  EWHC 1921 (Ch) (Phones 4U), the claimant alleged collusive anti-competitive conduct between the defendants and as part of this that former employees of the defendants were likely to have made relevant communications on their personal devices. As such, the claimants argued that those former employees’ personal devices should be searched during the disclosure process. The defendants resisted this on the grounds that the court did not have jurisdiction to make an order over the former employees’ personal property and that this would infringe the right to privacy under the European Convention on Human Rights.
The court was sympathetic to the claimant’s argument and decided that if an employee has sent (or received) communications about company business, that is something done in the course of their employment regardless of the device from which they are sent. The employer would have a right to inspect those documents. The documents are therefore within the employer’s “control” for disclosure purposes, and it was reasonable for the court to order the defendants to ask their former employees to make their personal devices available for search. To address the privacy concerns, the devices could be searched by independent third party IT consultants, who would pass on only relevant documents to the claimants. The rest of any copied data collected would be destroyed. Although the defendants appealed, the Court of Appeal upheld the order.
The first instance judge in Phones 4U observed that the principle on which his order was based did not depend on any term in the contract of employment giving the employer the right to inspect personal devices. He also sagely commented that the principle that the employer would be entitled to inspect business communications made on personal devices was likely to be “increasingly relevant as employees work more from home, where they may not have a separate work computer or an additional mobile phone provided by their employer.”
The principle in Phones 4U has recently been applied in The Republic of Mozambique v Credit Suisse International and others  EWHC 3054 (Comm). Individuals employed by or holding office in the government of Mozambique were said to have used personal email accounts and electronic devices as their routine communication channels for official government business. As such, the defendant prepared a list of individuals from whose devices and accounts it thought disclosure should be obtained, and sought a court order to require the claimant to identify which of those individuals it had approached for disclosure, and to provide the responses received. The court found that such an order could be granted. Further, for any individual who had responded giving consent to search their personal communications, control would be established for the purposes of disclosure. It would be open to the defendant to apply for a further order requiring the claimant to approach any individuals it had not yet contacted for consent.
Personal communications on business devices
It is not unusual for company policies to permit occasional personal use of work telephones and email addresses. Moreover, even when this is not explicitly permitted, the court has recognised that “in the 2010s, any corporate executive would have expected to be provided with corporate email and document storage facilities, and only the most fastidious would have implemented a full segregation between work and private use of such facilities”. However, the courts have found that personal documents held on work servers may still be confidential and companies are not free to make unfettered use of such documents.
In Jinxin Inc v Aser Media Pte Limited and others  EWHC 2856 (Comm) (Jinxin), a company sought a declaration that its officers could not claim legal professional privilege in respect of documents held on the company’s servers and that it should be allowed free rein to search and, if relevant, disclose them. The company’s IT policy stated emails on the work server could be monitored and accessed where necessary, so it argued the documents could not be confidential as they were not private when held on company servers.
The court disagreed. Whilst noting it was a mistake to conflate privacy and confidentiality, it explained that neither privacy nor confidentiality is a binary concept. A document can be confidential and remain so even if shown to selected persons. The fact that, for example, IT professionals or personal assistants might have viewed the employees’ confidential emails did not mean confidentiality had been lost. Allowing employees to make some personal use of work servers while retaining a right to monitor them where necessary did not permit the company free use of such material. There may well be highly sensitive personal information within, such as health data, and there would be obligations not to misuse this information even if the company is able to access it.
Conclusions and practicalities
The theme of the cases considered above is that so far as search rights and disclosure obligations are concerned, the device or server on which a document is held is not the primary concern. Whether a document is searchable and/or disclosable depends on whether the entity that is party to the litigation has the right to call for it. Business communications are ones to which an employer is entitled, even if made on personal devices. By contrast, personal communications still attract obligations of confidence, and are likely not to be disclosable by an employer, even when made on work devices. Though this offers little comfort to employees who are worried about privacy when a company’s lawyers are reviewing such personal communications as part of the disclosure process.
While the theory may be relatively straightforward, companies are left with challenges in reality. Best practice is obviously to ensure clear segregation between work and personal communication channels and devices. Situations such as in Fairstar, where emails were forwarded to the former CEO’s personal email address and not retained on company servers create avoidable difficulty that can be addressed if adequate procedures are in place.
Mixed use of a communication channel will be costly to deal with during litigation. If an employee believes they may have personal documents on a business channel that are privileged, third parties or at least segregated teams may need to conduct any searches prior to disclosure. There is also the very real chance that employees and former employees will refuse to surrender personal devices for search. The court in Phones 4U said it would not be sympathetic to this, as the employees had “chosen” to use their personal devices for the relevant communications. Beyond such cases where the employees themselves are said to have engaged in collusive anti-competitive conduct, the court might be more sympathetic.
Finally, it is always worth emphasising that “tone from the top” can be the best enforcer of policies and expected behaviours. An environment where senior staff adhere to segregation of work and personal communications, and in which it is generally understood that failure to segregate is not accepted, will obviously be the most conducive to minimising the often expansive consequences of blurring the lines of communication.