Using investigative review techniques to
control Litigation costs and make the courts accessible
An ediscovery white PAPer for LitigAtion PrActitioners
AUthorS: Chris Dale & Eddie Sheehy
oCtoBEr 2010
Index to Sections
1
Introduction
1.1
Executive Summary
1.2
The e-Disclosure Information Project
1.3
Who is Nuix?
1.4
Disclaimer
2
Purpose of this Paper
2.1
Making litigation accessible
2.2
Process and processing are not ends in themselves
3
The Court Process Briefly Described
3.1
Rules, management and discretion
3.2
The Practice Direction to Part 31 CPR
3.3
The Case Management Conference as a natural break
3.4
Procedural change
3.4.1 e-Disclosure Practice Direction and
Electronically Stored Information Questionnaire
3.4.2 Lord Justice Jackson’s report on litigation costs
3.5
Computer processing
3.6
Processing as evidence-gathering
4
Some Relevant Judgments
4.1
The judgments
4.2
Themes drawn from the judgments
5
Senior Judicial and Client Expectations v Reality
6
Rapid Early Investigative Review
6.1
A middle course between under- and over-disclosure
6.2
Getting quickly to what matters
7
Summary
1 Introduction
1.1 ExECuTIVE SuMMARY
this is one of a series of white papers written by Chris Dale of the UK-based e-Disclosure Information Project. Its purpose is to show that the conventional
approach to the processing of data makes insufficient use of the capabilities of modern processing tools. the target is those few documents which will actually help a fact-finding judge to find the facts on which his decision will turn. the bottleneck is the approach which requires everything else to be looked at, only to be discarded later. the positive message is that investigative review techniques and technology can jump over that, especially when coupled with an astute use of the court rules, to cut time and costs. A more defensive message follows from recent UK cases which show failures to identify key documents as a major cause of expense and reputational damage. A wider result is loss of faith in the litigation system, and justice is denied in consequence.
1.2 THE E-DISCLOSuRE INFORMATION PROJECT
the e-Disclosure Information Project disseminates information for those with an interest in electronic disclosure in the UK courts, including judges, practitioners, suppliers and corporate clients. Its aim is the reduction of the expense of litigation. It is run by Chris Dale, a former commercial litigation solicitor and adviser on all aspects of electronic disclosure, including the court rules, the practical issues which arise and the solutions which exist to tackle them.
the main expectations of such a project are that it is knowledgeable, independent and objective. It has no client and can exist only if it is funded by sponsorship. the sponsors have in common that they are interested in and knowledgeable about aspects of e-Disclosure wider than their own commercial advantage, and that they are willing to pool resources in this indirect way to raise understanding of the issues. Nuix is a sponsor of the Project.
1.3 WHO IS NuIx?
Nuix makes fast and scalable eDiscovery and electronic investigation software. While the technology provides an end-to-end eDiscovery solution, enabling users to collect, process, investigate, cull, review and produce ESI, Nuix is best known for its fast processing speeds, powerful and sophisticated search and its intuitive interface. Nuix customers include major law firms, corporations, financial institutions, advisory firms, litigation support firms as well as all of the world’s leading corporate regulators including the SEC (US), ASIC (Australia), the FSA and SFo (UK) and the JSEC (Japan). In January 2010 the United States Securities and Exchange Commission (SEC) said in a justification statement regarding its selection of Nuix: “No software other than Nuix can process large collections fast enough to meet the SEC’s desired timeframes”. For more information visit www.nuix.com
1.4 DISCLAIMER
this white paper is written by Chris Dale in conjunction with Nuix as an informational resource only. It is not intended to be relied upon as a source of legal or technical advice.
The target is those
few documents which
will actually help a
fact finding judge to
find the facts on which
his decision will turn.
2 Purpose of this Paper
2.1 MAKING LITIGATION ACCESSIBLE
Litigation should be a part of every corporation’s commercial armoury. If a company has been wronged, then it should not be constrained by cost from bringing proper claims. If a claim is made against it, then the expense of defending the claim should not itself drive the decision whether or not to engage in litigation. this does not, of course, mean that unmeritorious claims should be brought or weak claims defended in the face of advice to the contrary. Like any other commercial decision, risk is weighed against benefit, and cost is one of the factors which goes into the balance. that has always been so. the vast growth in electronic documents, however, has added an element of cost which is often out of all proportion to the rights which the company seeks to enforce or defend. Judges and rule-makers alone cannot control this expense - that is not to say that they should not try, but empirical evidence from around the world suggests that they cannot succeed despite the serious attention paid to it. recent months have seen reports, rules and practice directions in the UK, Australia, Singapore and Canada. US rule-makers are embarking on what has been described as a “once in a generation” opportunity to consider how to make litigation affordable. Australia’s Attorney General has just commissioned a review of disclosure whose reiterated imperative is “as early as possible”.
the rapid growth in volumes of electronic documents has appeared over the last six years or so. the last two years, however, has seen a turning of the tide as litigation support technology develops to meet the challenges. Just as judges and rule-makers cannot solve the problem alone, nor is technology, however sophisticated, the complete answer. What is required in addition are the skills to use it. these are not purely the technical skills required to operate the system but an understanding on the part of lawyers and judges as to how the technology fits into the court process. What is advanced in this paper is the idea that the very high cost of review must be anticipated and tackled right at the outset of the litigation. there is a bottleneck at the processing stage which derives not from any shortcomings in the technology, nor from the bare cost of the processing, but from the linear way in which the task is approached - the progression from one procedural and / or technical phase to the next without a clear understanding both of the final objective and of the waypoints.
the result is that opportunities are lost to get to the heart of the problem early. one message from this paper is the positive one that those willing to adjust their approach can win cases and win clients. there is a negative and defensive message here as well. the UK courts have recently seen a number of cases in which parties were penalised in costs and they or their lawyers suffered reputational damage as a result of a failure to find (or even to look for) documents. If one audience for this paper is people who have a positive urge to do better, another is those who fear that they will be the next firm or individual to appear by name in a judgment as having failed in their obligations to the court, the client or both.
this paper begins by considering briefly the relevant rules of civil procedure in England and Wales, and the pending developments. the next section summarises some recent cases and the observations of judges as to what they expect. the next looks at the technology itself and specifically at the capabilities of the processing tool Nuix in order to explain the difference between a rapid early investigative review and a more conventional approach to processing. An Appendix shows how the cases considered in the body of the paper might have been better handled using Nuix. the intended audience of this paper is not merely lawyers and judges. Its ambition is to persuade clients that if they choose the right lawyers armed with the appropriate technology and the right attitude, litigation need not be too expensive.
The very high cost
of review must be
anticipated and tackled
right at the outset of
the litigation.
Those willing to adjust
their approach can win
cases and win clients.
2.2 PROCESS AND PROCESSING ARE NOT ENDS IN THEMSELVES
the word “process” has two meanings when applied to electronic disclosure in the courts of England and Wales. In purely rules terms, it connotes a formal stage in a set of procedures set out in the Civil Procedure rules. the lawyers will have worked through the prior stages, and must now collect the documents for formal disclosure and exchange pursuant to the rules and to the order made at the case management conference. the word “process” is used also as a technical term by those whose focus is the technology - it is part of the fourth stage in the Electronic Discovery reference Model, coming after identification, preservation and collection and before review and analysis. Where all the other words in the EDrM have obvious meanings outside technology, “processing” is seen as purely a technology element which suppliers often overlook to explain.
Neither the client nor the trial judge has much interest in either of these uses of the word “process”. the client’s objective is to have his case disposed of as quickly and cheaply as possible, preferably by winning it. the judge has seen enough cases in his time as a barrister to know that his decision will turn on only a handful of the documents which have been the subject of all this process. his honour Judge Simon Brown QC (whose name will come up below as the author of the judgment in Earles v Barclays Bank), is often heard to say that cases generally turn on only ten or fifteen documents, and he has a habit of marking those in the trial bundle which are actually referred to – often as few as 5% of the total even of that already refined selection. Yet Judge Brown also attaches great importance to compliance with the rules, which require the disclosure of everything caught by the definitions in the rules. this apparent contradiction is explained by the difference between the duty of candour – broadly, the admission as to the existence of a potentially wide range of electronic sources – and the application of modern technology, properly used, to identify those which matter, and to do so as early as possible.
Justice can be better served by adapting the formal process and by encouraging the use of the court’s discretion to moderate the scope of disclosure. the exercise of discretion requires information as its source. the approach to investigative processing advocated here provides the information needed by all parties and the court to decide on the scope of discretion.
the purpose here is not to imply that process/processing is not important - court proceedings must have a framework of rules and stages, and the most basic components of computer processing (the removal of irrelevant file types, de-duplication and similar high-level activities) are clearly necessary. they are not, however, what the client is paying for - or rather, this is what the client is paying for but it is not his objective. the expense, both of proceeding with the procedures in the rules and of computer processing, becomes a barrier to litigation, a reason why parties choose to abandon their rights or settle on unfavourable terms. It does not have to be like that.
Justice can be better
served by adapting the
formal process and by
encouraging the use of
the court’s discretion to
moderate the scope of
disclosure. The exercise
of discretion requires
information as its source.
3 The Court Process Briefly Described
3.1 RuLES, MANAGEMENT AND DISCRETION
the UK rules require that parties conduct a reasonable search (rule 31.7) for all documents which, by the definition of standard disclosure (rule 31.6) are only those (the word only is important here) on which he relies and which are supportive of or adverse to the case of himself or any other party. this is very different from, and much narrower than, the concept of “relevance” which may bring in a much wider selection of documents. there is a subjective element both in deciding what is a “reasonable search” and in determining whether any class of documents supports or undermines the case of any party. that discretionary element is bolstered by the duty of the judge to manage the case “justly”, a term which is defined (rule 1) by reference to ideas such as saving expense, proportionality, early identification of issues and similar factors. the court’s case management powers include the express power to “make any other order for the purpose of managing the case and furthering the overriding objective”. these rules, properly analysed, offer an alternative to a “proceeding with the procedures” approach to reaching the client’s objective.
3.2 THE PRACTICE DIRECTION TO PART 31 CPR
the disclosure rules were supplemented in 2005 by a Practice Direction to Part 31 CPr which required parties to discuss their sources of electronic information. Properly used, this stage can avoid future disputes about the scope of disclosure and allow both timescales and likely costs to be estimated. It is clearly necessary that the parties have done enough work on the document collections before these discussions take place for them to be meaningful, and that the final selection (which follows from the expensive review stage) comes after the case management conference.
Given what is said above about discretion, it is clearly possible for this stage to be used much more positively to narrow the funnel high up in the proceedings before both parties start to review very large volumes. Would it not be a good idea to get as close as possible to that final selection at this early stage? A new Practice Direction 31B CPr and Electronic Documents Questionnaire in october 2010, discussed below, gives encouragement to this approach by emphasising the benefits of structured discussion.
3.3 THE CASE MANAGEMENT CONFERENCE AS A NATuRAL BREAK
the timing of case management in UK litigation implies a hiatus, an intentional break in the process at the case management conference. Before that, the parties must discuss their sources; after it they conduct a review aimed at the disclosure whose scope is defined at the CMC. there is, of course, a stage before that (or there ought to be) where the parties decide whether or not to bring or contest the proceedings. this does not just apply in civil litigation: the target of a regulatory investigation must similarly make some very quick decisions - not only do they generally get no notice that they are under attack but (unlike defendants to civil litigation, who are concerned only with the pleaded issues), they need to know if the regulator’s complaint is merely the tip of the iceberg or symptomatic of a wider problem.
the technology similarly has two broad phases – that is, if you ignore the right and left extremes of the EDrM you are left with a stage in which you gather data and information about it and a stage at which you fine-tune your selection by review. Quality, speed and price inter-relate here – you must satisfy yourself (and thence others) that all the candidates for review are identified, you must crack through them quickly to find the ones which really matter, and you must do so at a price which is worth paying relative to the value of the claim. the price must be right both in terms of this first stage – a reasonable price to pay to equip yourself for the CMC – but should also be judged by reference to the money to be saved on the review stage.
There is a subjective
element both in deciding
what is a “reasonable
search” and in
determining whether
any class of documents
supports or undermines
the case of any party.
3.4 PROCEDuRAL CHANGE
It follows from what is said above, that the two areas to focus on are a) the quality of the information exchanged between the parties and the court, particularly before and at the case management conference, and b) the need to reduce volumes for review whilst still complying with the duty of candour required by the rules. As we will see below when we discuss recent cases, the emphasis from them has been on disclosure which is inadequate and incomplete. this is likely to have the effect of driving parties towards more disclosure. the real message is that we need better and better-managed disclosure, not more of it.
these problems have been addressed in procedural terms by a new Practice Direction and Electronic Documents Questionnaire and in the report on litigation costs by Lord Justice Jackson. they each merit detailed explanations, but a short summary will suffice for the purposes of this paper.
3.4.1 E-DISCLOSuRE PRACTICE DIRECTION AND ELECTRONIC DOCuMENTS QuESTIONNAIRE
A new e-Disclosure Practice Direction1 took effect on 1 october 2010. It was drafted by a Working Party led by Senior Master Whitaker, whose judgment in Goodale v the Ministry of Justice is discussed below. Its expressed purpose is “to encourage and assist the parties to reach agreement in relation to the disclosure of Electronic Documents in a proportionate and cost-effective manner”. [Para 2]. It says in terms [Para 6] that “technology should be used to ensure that document management activities are undertaken efficiently and effectively” and that “Disclosure of Electronic Documents which are of no relevance to the proceedings may place an excessive burden in time and cost on the party to whom disclosure is given”.
Annexed to the Practice Direction is an Electronic Documents Questionnaire which may be completed voluntarily where the parties may find it helpful to exchange information, or may be ordered where either the parties cannot reach agreement or the judge is not satisfied with the agreement which they have reached. the Questionnaire covers date ranges, custodians, computer systems and backups; it provides for the identification of foreseeable problems and encourages the giver to set out what he expects from the other side.
It is not necessary to set out the detail here. It is easy to see how the mutual
illumination which results from exchange of Questionnaires will help focus minds on what really matters – which is the theme of this paper.
3.4.2 LORD JuSTICE JACKSON’S REPORT ON LITIGATION COSTS
Lord Justice Jackson laid particular emphasis on the costs of the review stage, on the lack of active management by judges and on the need for education for both lawyers and judges in e-Disclosure.
the fundamental problem, however, is not merely electronic disclosure but disclosure itself. Amongst the recommendations in this regard is one for a proposed new rule 31.5A, which emphasises the right and duty of courts to consider carefully what disclosure scope is actually needed for a case. the suggested change is called the “menu option”. It removes the present default of standard disclosure and replaces it with a list of alternative approaches which the court must consider. the express purpose behind this is to force a real focus on what is needed.
It is easy to see how
the mutual illumination
which results
from exchange of
Questionnaires will help
focus minds on what
really matters – which is
the theme of this paper.
3.5 COMPuTER PROCESSING
In that context, three elements of electronic document processing come to the fore: speed, scale and thoroughness. Speed is relevant at various levels - how easy it is to process the original (or at least a copy) of the electronic container in which the evidence is (probably) held, how quickly you can process a known dataset and get it in front of the lawyers, and how fast their searches are.
Some formats are relatively open like Microsoft PSt files. Some are rather closed – like Microsoft Exchange and Lotus Notes databases, forensic collection formats and email archives. And to further complicate things, the format of the data storage containers may have changed many times over the years and it may no longer be possible to retrieve the original software that created the proprietary database in the first place. It is much quicker (and therefore cheaper) to process individual mailboxes directly from a Microsoft Exchange database file, or Lotus Notes database file than to recreate the original It environment, extract the individual mailboxes one after the other, and process these. the set-up time for the latter could be many days or weeks, so the facility to extract and process data directly from original sources – irrespective of the data container format or historical version saves time and money over small volumes as well as large ones.
the speed with which an application will process a known dataset is one of the few things which is capable of objective measurement, for example against the benchmark 40Gb email data provided by the Electronic Document reference Project http://edrm.net. Many providers of early case assessment technology have done just that and published the results – the time for Nuix is less than 40 minutes on a single mid-range server.
Scalability, in this context, means that speeds of this order can be obtained pro rata to the size of the dataset - cases with terabytes of data generally have large teams of expensive lawyers standing by to start looking at the results, and what matters is firstly the speed with which they can start using the resulting index and secondly the time it takes to run their searches. Nuix and the other providers in this space compete on these two measures of speed because they translate into immediate costs-savings. When Nuix talks of processing at rates of 100GB per hour (as it does on its new SuperComputer), the thing to focus on is not the mere functional enhancement but the benefits which ensue. If the lawyers are to get quickly to Judge Brown’s ten or fifteen documents, they must be able to harness near-instant searches as servants to their brains. If the first function of speed is to get the data under the lawyers’ eyes, the second is the ability to make iterative and variant searches as quickly as their thinking points them in a given direction.
Mere speed is no good if quality is sacrificed to achieve it. Some systems do not index attachments (especially in Lotus Notes), or recognise and correctly encode all the Unicode characters (not all emails are in English after all), or index enough document and textual characteristics to enable all reasonable searches to be undertaken. one might hesitate to index everything if doing so brings a time-penalty; if you have the speed at your command, there is no reason for not:
1. exhaustively extracting all metadata because you never know what will be required to prove a case
2. retrieving deleted information
3. identifying, managing and processing corrupted and encrypted data
4. extracting text and metadata from non-standard formats like Unix email systems and forensic formats (including forensically produced Logical Evidence Files).
The speed with which
an application will
process a known
dataset is one of the
few things which is
capable of objective
measurement ...
If you can’t extract it, you can’t search for it. Whilst there is no point in collecting and processing data for the sake of it, it is not always possible to predict whether yours is a case where the retrieval of deleted information, the identification of particular metadata information or the ability to identify corrupted or falsified documents may prove pivotal to winning or losing a case.
3.6 PROCESSING AS EVIDENCE-GATHERING
there is a fourth component, however, which is more to do with attitude and approach than with the technology, although it depends on the technology. that involves treating the processing stage not as a mere grind through a big haystack to make a smaller one, but as a hunt for the key evidence right from the start. In terms of the human resources, this brings the immediate deployment of the lawyers onto the things which matter.
It would be easy to miss the point here or, rather, there are two points. one topic is short-fused cases where a quickly-found smoking gun disposes of the case before it begins. the other, and more common situation, arises where a party’s whole approach to litigation – including the primary question as to whether to engage in it at all – turns on his or his lawyers’ ability to get to the heart of the problem quickly and cheaply. Looked at like this, “processing” loses its nature as just a dull and expensive necessity – it becomes a weapon of attack or defence and not just part of the logistics.
there are undoubtedly cases which are disposed of one way or another in days because one party’s astute use of technology flushes out quickly the handful of documents which brings them or their opponents to an instant decision which settles the case. Such cases, inevitably, do not give rise to judgments because the whole point is that the litigation was avoided by the discovery of these documents.
the message derived from recent UK cases owes less to sudden and dramatic finds of killer documents - the so-called “smoking gun” - and more to broader failures to comply with the obligations becoming evident either at the case management stage or at trial. A party who is on top of his material is not merely able to comply with his formal obligations prior to the CMC but is at a psychological advantage, which is not to be underrated, vis-à-vis an opponent who is not ready. he is also able to reach that point at a lower cost, which in turn encourages clients to embark on litigation they might otherwise decide not to undertake. It is easier to give estimates of cost and to drive opponents and the court in the right direction if you know what that direction should be. that follows from identification at the beginning of those things which are going to matter at the end.
recent UK cases give examples of parties severely embarrassed by their inability to comply with their obligations. the primary points pulled from each of these cases is not specifically that fast processing or instant identification of the critical documents was what decided the case. they are all, however, illustrations of the idea that the costs, the damage to individual reputation, and the reputation of litigation itself, would have been different if one or both of the parties had got to grips with the important elements right at the outset. the cases are chosen not because they advance the law but because they focus attention on the mechanics. there is a danger that lawyers and their clients will mis-read some of these judgments, perhaps taking the view that if this is what the playing field now looks like they will keep off it. that would be the wrong conclusion.
A party who is on
top of his material
is not merely able
to comply with his
formal obligations
prior to the CMC but
is at a psychological
advantage, which is not
to be underrated
4 Some Relevant Judgments
4.1 THE JuDGMENTS
Earles v Barclays Bank Plc [2009] EWHC 2500 (Mercantile) (08 October 2009)
2 the defendant bank failed to produce documents evidencing the alleged instructions which were at the heart of the case. the judge referred to the defendant’s failure to preserve evidence and said this:The lack of disclosure by the Bank …. cannot be ascribed to a lack of understanding of the duties of disclosure and how to procure retrieval of electronic “documents” by the Bank’s first class legal teams, both in and out house. … an expert in information technology, either in house or a consultant, could easily have been instructed to retrieve ESI from various back up sources one would have thought but no such expert appears to have been instructed to do so. One expects a major high street Bank in this day and age of electronic records and communication with an in house litigation department to have an efficient and effective information management system in place to provide identification, preservation, collection, processing, review analysis and production of its ESI in the disclosure process in litigation and regulation. [Para 41]
and added this:
As regards electronic disclosure, the Bank…should have procured and retained Mr Leech’s e-mail account and phone records for the period …. In house Counsel should not have simply accepted Mr Leech’s word that there were no relevant e-mails. His lap top should have been retained in 2007 and certainly ascertained upon his leaving the Bank in November 2008. This earlier non-disclosure of the e-mail records should have featured in the disclosure statement [Para 69]
..before concluding:
The disclosure of only the key documents in a case is absolutely essential to a Court if it is to achieve the accurate and efficient fact finding sought by the parties to civil litigation. In my judgment, the ‘conduct’ of electronic disclosure by the Bank and its lawyers fell far below the standards to be expected of those practicing in the civil courts [Para 74, 75)
It is not in fact clear whether the documents had been destroyed or whether the defendant bank simply took the view that it was too expensive to look for them. As it happens, they succeeded on the strength of their oral evidence. the judge penalised them in costs to which they would otherwise have been entitled, partly for the formal breaches of the rules, but mainly because of the additional time and expense which had been incurred because of the failure to produce documents. the reputational damage suffered by both the defendants and their solicitors far outweighs, one suspects, the actual penalty in costs.
In this case, the issue was a relatively simple one - did Earles give certain instructions or did he not? - and the time frame was a limited one. An approach to processing along the lines described above - a targeted search for the things which actually mattered - would have been inexpensive relative to the actual costs lost, and trivial when set in the reputational context. the point of general application arising from this case is that courts will not accept the bland suggestion that a proper search for electronic documents is disproportionate without some evidence of the balance between the likelihood of finding documents and the cost of searching for them. It is perfectly proper, armed with such information, to plead disproportionality, but you must be able to show that balance.
The judge penalised
them in costs to which
they would otherwise
have been entitled, partly
for the formal breaches
of the rules, but mainly
because of the additional
time and expense which
had been incurred
because of the failure to
produce documents.
Al-Sweady & Ors, R (on the application of) v Secretary of State for the
Defence [2009] EWHC 2387 (Admin) (02 October 2009)
3the Court of Appeal criticised a government department in the strongest terms for its conduct of disclosure. having asserted more than once that their client had no further documents of a particular kind, the treasury Solicitor did a sudden volte face and reported that the department had more documents than it could handle. the Court of Appeal referred to this failure in the following terms:
On 25 June 2009, the Treasury Solicitor responded and then for the first time made the point that it did not deny that the electronic communication sought by the claimants were still in existence. Much to our surprise in the light of the Secretary of State’s previous stance, it was then asserted for the first time that:-
“the sheer volume of the material… together with the technical difficulties in framing meaningful search parameters, means that it would be impractical and disproportionate to conduct broad-based searches of the exchange servers themselves, and that to do so would be disproportionate”.
No reason has been put forward to explain why this response had not been made at any time since the original request which had been made more than eight months earlier on 16 October 2008. We conclude that the Secretary of State’s agents had simply failed for no good reason during that lengthy period to carry out these critically important and obviously highly relevant searches and this failure in our view constitutes a serious breach of their duty to give proper disclosure. It must not be forgotten that Salmon J explained in Woods v Martins Bank [1959] 1 QB 55 at page 60 that “it cannot be too clearly understood that solicitors owe a duty to the court, as officers of the court, to go through the documents disclosed by their client to make sure, as far as possible, that no relevant documents have been omitted from their client’s [list]”. This duty requires a solicitor to take steps to ensure that their client knows what documents have to be disclosed. [Paras 41, 42]
this was not a case where the defendant had any option about taking part in the litigation, so the decision-making should not have turned on the fear of processing costs. once engaged, the defendant had no option but to do the job properly, which it clearly failed to do. At the time of the judgment, that failure had cost the Department £1 million in indemnity costs payable to the claimants in addition to its own costs. Just as significantly, its standing as a party was irreparably damaged (it had to concede the claim), as was that of the individual charged with managing the evidence. the government is a serial litigator and the treasury Solicitor is constantly engaged in document-heavy litigation on its behalf. the failings identified in the judgment (which are expressed by the court to be merely examples of much wider failings) are hard to explain.
Once engaged, the
defendant had no option
but to do the job properly,
which it clearly failed
to do. At the time of the
judgment, that failure
had cost the Department
£1 million in indemnity
costs payable to the
claimants in addition to
its own costs.
Goodale & Ors v The Ministry of Justice & Ors [2009]
EWHC B41 (QB) (05 Novmber 2009)
4the Ministry of Justice blandly asserted that they did not intend to disclose any electronic documents, despite the fact that the central issue (the policy and practice in dealing with opiate-dependent prisoners) clearly warranted a wide-ranging search. the case is noteworthy because it is the first formal use of the Questionnaire drafted by Master Whitaker’s Working Party; that aspect should not obscure a more general point about judicial supervision of disclosure and the need to be informed as to what possibly relevant electronic sources exist. Master Whitaker explained this and the proper use of technology in the following terms:
The unusual feature of this case is that there is no agreement by the Defendants at all for the production of documents which are stored electronically. They simply do not want to carry out a search for ESI. They argue that it will be disproportionate to carry out the exercise and they have produced some provisional statistics as to the quantity of documents that they may need to search. Given that the issues in this case range over a period from 2000 to 2009, I was not surprised to be told that a very large proportion of documents which potentially come within the standard disclosure test will be held by the defendants electronically. There is no legal difference in the disclosure test to be applied to documents that are held electronically and paper documents. The difference, of course, is that electronic documents (as pointed out above) have a habit of being of far greater volume, they are far more easily created, there are many duplicates and they are difficult to find, so the cost of search for and disclosure of them can be much higher, if sensible provisions for management of the ESI disclosure exercise are not put in place. That does not mean to say, however, that the exercise of search for and disclosure of electronic documents should not be carried out at all. That is not an answer. Particularly in this case in which, in my judgment, it has to be admitted that there is high probability that important disclosable documents, in accordance with the standard disclosure test, are held in electronic form. …I do not see in this case any reason arising out of the volume of documents to be searched, for not ordering that the defendants disclose electronically stored documents in this case and I will order them so to do. What is important, however, is that they should not be required to conduct a review of documents which is unnecessarily wide at this stage. What is called for in this case as in many others is a considered and staged approach so that the volume of documents that respond to the search will not be too wide. With search for disclosure of paper documents, every document has to be reviewed, with ESI, electronic searches can be applied to reduce the volume of documents to be reviewed. [Paras 12 and 13]
Master Whitaker went on to say what he considered the next steps should be:
At the moment we are just staring into open space as to what the volume of the documents produced by a search is going to be. I suspect that in the long run this crude search will not throw up more than a few hundred thousand documents. If that is the case, then this is a prime candidate for the application of software that providers now have, which can de-duplicate that material and render it down to a more sensible size and search it by computer to produce a manageable corpus for human review – which is of course the most expensive part of the exercise. Indeed, when it comes to review, I am aware of software that will effectively score each document as to its likely relevance and which will enable a prioritisation of categories within the entire document set. [Para 27]
the key point to draw out of this is that the Senior Master wanted two things – as narrow a range of documents as allowed justice to be done, and a staged and iterative approach which considered most obviously important documents first and moved on to others only if necessary. he saw custodians as an obvious way to limit the pile.
The key point to draw
out of this is that the
Senior Master wanted
two things – as narrow
a range of documents
as allowed justice to be
done, and a staged and
iterative approach which
considered most obviously
important documents first
and moved on to others
only if necessary.
EWHC 852 (Admin) (23 April 2010)
Sharon Shoesmith was dismissed summarily on the strength of a report written by oFStED, the regulator in connection with education and children’s services. After closing speeches but before judgment, oFStED informed the judge that it had found many documents which it ought to have disclosed. When finally produced, those documents proved to include 17 prior drafts of the report. It appears that oFStED gave disclosure on paper notwithstanding that nearly all the documents must have been created, and presumably still existed, electronically (we know this because of an instruction given to delete all e-mails relating to the underlying subject matter of the claim).
the disclosure failures did not prevent the defendants from beating off the claim but the judge intends to investigate the circumstances of the disclosure failures. oFStED will almost certainly bear the costs, and on an indemnity basis, thrown away by their failure to do the job properly, and the damage to their reputation and that of the minister whose decision was in question, is irreparable regardless of the outcome.
However, that does not mean that I am entirely satisfied with the explanations I have been given about how the Claimant’s requests for the disclosure of this material were answered. In my view, there remain some unanswered questions that….. I propose to follow up after this judgment has been delivered. [Paras 29, 30 of Appendix 2]
It is worth setting out the judge’s summary of how the missing documents came to light, if only to contrast it with the approach described in the next section. Bear in mind that oFStED had already given disclosure – apparently by printing individual e-mails and their attachments – and lawyers for all four parties’ had copied them and advised on the case as it then appeared.
It appears that on 4 and 5 November … Mr Pullen discovered the documents that have since been disclosed. He has said that on 4 November he looked in the ‘My Documents’ folder on his laptop and found a sub-folder within a folder entitled ‘Haringey Review’ containing copies of e-mails that he had gathered together for the purposes of a Freedom of Information request. He printed these e-mails off and gave them to OFSTED’s legal team that day. He also searched his network e-mails and discovered a folder in Microsoft Outlook called ‘Haringey Review’ containing around 250 e-mails. They were all e-mails, he said, that he had received from other people and so knew that some of them may already have been disclosed by the senders. However, he said that he does not know how he also overlooked this sub-folder previously. He found in this sub-sub-folder a number of e-mails which contained draft copies of the JAR inspection report. As he was aware that he had been asked if copies of drafts existed at an earlier stage in the proceedings he realized, he said, that the e-mails would need to be disclosed urgently to the legal team which is what he did.
… the story is hardly a satisfactory one and it raises the question of how vigorous were the efforts, both by the OFSTED team and the legal team, to look for documentation that was plainly present on his laptop. Mr Maurici is right to say that this discovery did not require any sophisticated retrieval by computer experts. Presumably, typing in the word ‘Haringey’ in the general search facility would probably have revealed the folders or the documents. [Paras 39,40 of Appendix 2]
the judge questions the amount of “vigour” used to find documents. the real evil arises when the parties devote expensive vigour without first considering if there is a better way to do the job.
The disclosure failures
did not prevent the
defendants from
beating off the claim
but the judge intends
to investigate the
circumstances of the
disclosure failures.
4.2 THEMES DRAWN FROM THE JuDGMENTS
there are common themes here. Although the disclosure failures involved breaches of the rules, that was not the main point drawing fire from the judges. the focus was more on the time and costs thrown away by the default and on the blame which fell on both institutions and individuals concerned. We do not know what the relative costs might have been as between the course which was actually followed and the course which might and should have been taken. the point of these examples is that the defaulting party did not know either.
Goodale differs from the others in that Master Whitaker headed off the prospective failure by proper case management at an early stage. Goodale is, however, the clearest example of the theme of this paper – that parties and their lawyers seem content simply to assert that dealing with electronic documents would have been too expensive without applying their minds either to their obligations in that regard or to the availability of technology to help them with the task.
5 Senior Judicial And Client Expectations v Reality
If one were to summarise what has been said above, it is that there is a gulf between the formal expectations expressed by Lord Justice Jackson and by the senior judges who commissioned the Practice Direction and questionnaire and the practice as it appears from the cases. the clients see the same gulf. the Jackson hope (perhaps “expectation” puts it too high) is of active management by judges who have been fully informed by the parties as to the possible scope of their disclosure, as to alternative ways of tying disclosure to the issues which really matter, and as to the costs of taking one route rather than another. When that is coupled with the wide discretion given to judges to do what is right to meet the overriding objective, one can see plenty of scope for focusing very early in the proceedings on those things which matter.
the case law and anecdotal evidence shows a very different picture. the approach taken by the defaulting parties in the cases referred to above scales down to much more everyday commercial litigation in which the costs of handling electronic documents can quickly become disproportionate to what is at stake. In some cases, the additional expense was caused by the failure of one party to do the job properly and suffering adverse costs consequences as a result when they were made to reimburse opponents for wasted costs. Just as much money is wasted by the opposite - a conscientious plod through all the potentially disclosable documents may result in disclosure which is unimpeachable in terms of its compliance with the rules, but too expensive to make commercial sense. the result is that companies are discouraged from embarking on litigation at all. they are inevitably the losers as a result in that they have given up a right or surrendered to a claim which they would rather have fought. the lawyers are the losers also if the clients both contest their fees for work already in hand and go elsewhere (or decline to litigate) next time. Lastly, justice is denied if the courts do not offer remedies which are affordable.
the answer is to take advantage of the scope which the rules allow to tailor disclosure to what is needed for the judge to find the facts upon which his judgment will be based. that requires two things - the appropriate technology and the confidence to use it. the use of the word “confidence” implies more than the expectation that the software will deliver the right results. It implies a willingness to engage in subsequent discussions with other parties and, if necessary, the court aiming to persuade them that the narrower selection proposed as a result of the technology exercise produces a result adequate for a just decision.
The answer is to take
advantage of the scope
which the rules allow
to tailor disclosure
to what is needed for
the judge to find the
facts upon which his
judgment will be based.
6.1 A MIDDLE COuRSE BETWEEN uNDER- AND OVER-DISCLOSuRE
the previous sections show that preparation for the CMC is a distinct stage in litigation. By that point, lawyers should have identified the maximum scope of disclosure - electronic and paper sources, date ranges, obvious custodians and the search terms or keywords to be used to filter the volumes down to a manageable size. this depends first on discussions with clients, including the It department, and then on agreement with the other side, or in default of that, with the judge.
two points arise in addition to the obvious ones. the first is that any lawyer reading the cases referred to above is going to err on the side of caution; the recurring theme is failure to disclose that which ought to have been disclosed. It is easier, as well as safer, to include a source of marginal value, to widen the date range or to increase the number of custodians. the second is that searching disclosure data is unlike most searches in two respects - you do not necessarily know what you are looking for, and you cannot just stop when you think you have “enough”.
6.2 GETTING QuICKLY TO WHAT MATTERS
the key authority here is Master Whitaker’s judgment in Goodale. having disposed briskly of the defendants’ idea that they will simply close their eyes to ALL electronic documents, he goes on to make it clear that he does not expect all potentially
disclosable documents to be listed without discrimination. he wants to know what they have got - that is the point of requiring them to complete the Questionnaire - but he wants a thoughtful and iterative approach to the actual disclosure. how do you most efficiently identify the key players and define a time period?
Assume that you have used your processing tool (Nuix in this example) to cull
obviously unwanted file-types and duplicates and to limit your date range (at this stage on a wide basis), how do you identify key players for disclosure purposes? the clients will have told you who they believe to be the important people. Who else, inside or outside the company, was involved?
the diagram below shows names derived from email data pulled from the emails by Nuix.
It is easier, as well
as safer, to include
a source of marginal
value, to widen the
date range or to
increase the number
of custodians.
At a simple level, this might just show the custodians identified as important (Master Whitaker lighted on four such people). It also shows you who they corresponded with and, if the document selection has already been narrowed by key words or other methods of selection, this might tip you off to the existence of people whose names have not yet been mentioned or whose role had not been appreciated. this might be from oversight (“of course we should have thought of X”), but might instead have introduced a player whose existence was unknown – someone from a different department or from outside the client (“why was he writing to Y about this?”). there may be more to this than merely widening the list of custodians – the
involvement of X or Y so graphically displayed, may alter the whole perception of the case. If so, better to find out now than at the review stage.
It is helpful to see examples showing how an application would address specific problems. Nuix has provided, in Appendix 1, explanations which tie its functions to the problems raised by the cases summarised above.
7 Summary
It may seem odd to describe an approach to something as new as electronic disclosure as “traditional”. We are, however, seeing cases being approached as if electronic documents were just like paper, with large categories of documents being discarded or included by methods no more scientific than opening a box or file of papers and forming a view as to whether its contents are potentially disclosable. that approach might result in the overlooking of something relevant; it is no less disadvantageous if the cautious lawyer includes a category, “just in case” its contents prove relevant. Meanwhile, as a procedural matter, the lawyers plod expensively from stage to stage, carrying with them and multiplying a corpus of documents most of which are bound to be irrelevant. this seems to accord with a literal reading of the rules; the giving party feels secure that it has complied with the obligations whilst the receiving party is happy that it has received everything. the judge does not seem to mind too much as long as no one brings him a specific disclosure application to consider.
the immediate victims are the clients on both sides, who must now pay their respective lawyers to review the resulting volumes; one of them, the as yet unidentified loser, will be picking up the costs of both parties. the massive bills which result are often out of proportion both to the sums in issue and to the 10 or 15 documents on which the case will eventually turn.
We need a different approach, one which binds the lawyers, the judge and the clients into an early decision to cut down the volumes. the expression “early case assessment” has come to be applied solely to the use of software applications. It is in fact a process, and one which requires management as well as software. the most vigourous case managing judge must depend on the two factors referred to above - the appropriate technology and the confidence to use it.
We need a different
approach, one which binds
the lawyers, the judge and
the clients into an early
decision to cut down the
volumes. The expression
“early case assessment”
has come to be applied
solely to the use of
software applications.
It is not possible to calculate the costs lost through the timid and traditional approach to the management of e-disclosure. Some of the cases, however, both those
mentioned above and others, give a stark illustration of costs which have had to be paid to opponents as a direct result of e-disclosure failures. the defendants in Earles lost a high proportion of the costs to which they would otherwise have been entitled; in Al-Sweady, the defendants had to pay indemnity costs and also had to concede the claim; oFStED will have to pay the costs wasted by their late discovery of documents; the office of Fair trading had to abandon an expensive price-fixing trial against BA and Virgin because it was not on top of its disclosure. these dramatic and well-documented examples might easily be dismissed as outliers, with outcomes irrelevant to everyday litigation. Much more money is in fact wasted every day in the routine management (or non-management) of everyday cases.
the approach outlined above, which cuts to the chase at the earliest point, has a side-effect which is easily overlooked. “Big cases” are often only “big” because the volumes of documents need correspondingly large teams to manage them. If the approach suggested in this paper is adopted, then the field opens up to a wider range of law firms who, armed with those two ingredients, the appropriate technology and the confidence to use it, can both win cases against, and win clients from, big firms. the combination of the technology and the lower charging rates may tempt the clients back to litigation which they have abandoned as part of their commercial armoury. In a sense, the value proposition increases as the claim of value goes down. the defendants in Earles lost more than the costs consequent on their disclosure failures. the judge also took the view that the large London law firm which represented the bank was more expensive than the case warranted. the opportunity for suitably skilled and equipped smaller firms to take work away from larger ones increases if the courts are seen to be disallowing higher charging rates. the key words here are “suitably skilled and equipped”.
Chris Dale
The e-Disclosure Information Project
oxford, october 2010 © Chris Dale 2010
T: +44 1865 463033 www.chrisdalelawyersupport.co.uk
M: +44 777 580640 www.chrisdale.wordpress.com
Appendix 1
Nuix functionality applied to some uK cases
THE CASES ARE THOSE WHICH HAVE BEEN SuMMARISED ABOVE
Earles v Barclays Bank Plc. there is nothing complicated here that most eDiscovery
software could not solve. Some are more elegant than others – but it involves nothing more complicated than this:
• retrieve a copy of the bank employee’s emails which should have contained the alleged instructions; even though his laptop was not available, the emails can usually be retrieved from the Bank’s archive or back-up copies of its email server’s database (i.e. Microsoft’s .edb file).
• Process the emails. Nuix processes .edb files and individual mailboxes within .edb files directly (i.e. in a point and click fashion) – eliminating any pre-processing It requirements. this should take only a matter of minutes.
• run a search over any emails between the bank and Mr Earles and read the emails which correspond with the timing of the alleged instructions. A time-line diagram like the one below might be useful to understand how the interactions occurred, and by clicking on the node the investigator can read the actual messages.
required. If we can assume that a list of individuals of potential interest can be easily generated – a rapid Investigative review workflow would be as follows:
• take a copy of the exchange server databases (.edb files) and load onto a storage device like a SAN or a standalone NAS (Network Attached Storage). £5,000 will buy 24tB of slow NAS storage – so neither storage cost nor volume of stored data should be seen as a compelling reason not to proceed through this stage (another £5,000 can increase that storage quantum to 48tB and so on). there are likely to be multiple .edb files covering the lead up to the incident to the date of the court case. For simplicity – copy and load them all onto the storage device. Copying the data is likely to be longest step in the process.
• Set up a Nuix case and select just the individuals of interest from each .edb file. Assuming that we are interested in fewer than twenty people, each selection process should take no more than a couple of minutes.
• Process the selected mail boxes from within the .edb file. Given that a good average for email usage per year is about 1GB and we have 20 people of interest, we can estimate that over three years – approximately 60GB of emails (and attachments) would have been generated. however, it is quite probable that the .edb files were regularly generated, so that the same data was probably backed up many times – creating much duplication. therefore, instead of 60GB of single instance emails being generated, a 20 fold increase may have been created (this is a generous assumption). We now have 1.2tB of data to be processed for these 20 people. Exchange database files are complex structures but with a typical Nuix mid-range Enterprise processing server, this job would be completed over a weekend.
• the next step is to suppress the irrelevant information through de-duplication and targeting a date range of the event itself and the following months. this would reduce the data back down to a fraction of the original 60GB.
• Now all that is needed is for an intelligent investigator to look at the main players’ communications around the date of the incident. Follow email threads. Look at visualisations like the one below to see if any additional individual’s data should be included in the results.
• Focus in on the email communications and drill down to review the correspondence between the individuals.
• Add a key word or two directly related to case. review the results.
• Single out communications that went to “private” hotmail and other internet email accounts
• tag all interesting emails for review. Click the “highly” similar button and review those documents and emails which have similar content. then click “medium” similarity and “low” similarity – to see if further documents and emails of interest are identified. this function will identify any document with similar content irrespective of format (i.e. whether something was written in an email, a word document, a PDF or even an Excel file etc)
• Since this case was about one incident – this investigative review should produce solid results within hours.
Goodale & Ors v The Ministry of Justice. In the UK, Judges have influence to manage
case and can make any order they wish to improve a disclosure process proportionately, focusing on getting to the main facts of the case. Instead of requiring disclosure of every email and document in the Ministry of Justices’ prison system over a ten year period, Master Whitaker identified four main custodians of interest. this is a great place to start. over a ten year period, if the identified Custodians were heavy email users (i.e. 2GB per year) – we can expect to need to process about 80Gb of information. Poor storage, identification and collection capabilities might increase this number considerably but when processing at rates of tB’s per day it is better (i.e. cheaper and easier) to process the lot and de-duplicate afterwards than to perform some form onsite relevance analysis (not sure how that could be achieved).
this is a case where both a rapid Investigative reviewtM and a fast document review (Nuix calls this a Fast reviewtM) workflow would work best together to quickly identify pertinent information:
• Drill down on the individuals whose job it was to implement policies relating to opiate-dependent prisoners. Identify messages which relate to discussions about how to manage drug users. Some basic key words searches will narrow the field and the application of a Similarity search on an actual policy document will identify who received the various versions of any policy documents that might have been present as well as any comments that were made on it – or different versions of the policy. • It might take a few hours to identify different groupings of potentially relevant
information. Each group of documents (including parent emails and child
attachments) as well as similar documents are given to a single reviewer to ‘eyeball’ and to classify and comment on accordingly.
• Multiple reviewers would be used – initially on the most relevant information and later on the less relevant data. In this way the most pertinent information bubbles to the top first.
• Don’t forget to check the Network diagram to identify if any additional individuals should be similarly investigated. repeat the process as required.
In this way a rapid Investigative reviewtM and a Fast reviewtM are conducted together to identify the most pertinent information.
this is an example of an e-Disclosure activity that would work in the UK. It is unlikely to work in the US where the rules virtually demand a much higher level of scrutiny. however, the procedure detailed above would work perfectly as an Early Case Assessment workflow so that the parties knew exactly where they stood before going into a full blown document review.
Shoesmith, R v Ofsted & Ors. this is a simple case of the defendant not taking some
rather basic collection activities. Using either Encase Portable or Nuix’s own portable collection capabilities, a hard drive could have been pre-configured and sent to all individuals of potential interest. Neither of these products is expensive and all the user-made information could have been collected from their hard-drives. the next step is to process this collected information (Nuix directly processes Encase images and Logical Evidence Files) and, as the judge said, run some basic key word searches (i.e. “haringey”). the evidence would have been easily found. Additional searches which might have highlighted additional information located in email files or otherwise mis-filed:
• review the Network Diagram on the results of the key word searches to identify if any additional people should be included.
• review the list of domain email address where documents were sent. It might include some interesting and unexpected results (often hotmail addresses or the media) e.g.
• on the key oFStED report – run a Similarity search to identify any additional versions which might have additional information and again review the Network Diagram to identify if additional players were involved.
• Compare the dates of critical documents with the actual metadata of the documents to ensure there are all consistent and nothing has been altered. Quality and rapid processing together with an Investigative review workflow initially would have saved a lot of time, money and reputation in all these cases.
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