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Foundations of IT Law Programme: Module 7 - A to Z of Data Protection in the IT World

‘I cannot comment on why the terms and the scope were what they were’

Phone hacking and e-disclosure are dominating the news at present. E-disclosure specialist, Mike Taylor reviews the high profile News International dramas and draws out a few lessons, for the Murdochs and others. His title is taken from James Murdoch’s evidence to the Culture, Media and Sport select Committee.

Billy Bragg tweeted 'On the worse day in News Corp history Jonnie Marbles has given The Sun and Fox News the chance to make Rupert Murdoch look like the victim' in reaction to the foam pie incident that occurred whilst Rupert and James Murdoch were giving evidence to the Culture, Media and Sport select committee on 19 July 2011. For me this neatly highlighted the different emphasis that different parts of society place on occurrences such as the Murdoch's giving evidence. Billy Bragg clearly viewed the event as a great chance for New Corporation to be in the full glare of bad publicity. MPs on the committee, even before the event, played down the likelihood of finding out anything useful, and seemed to view it as an opportunity to demonstrate the wielding of parliamentary power before a long standing adversary (News Corp). Because of the business I am in and the fact that I had been contacted by the national press for some background on how these investigations generally work and what a 'good' e-mail investigation would look like, I was interested in what the lawyers had done when investigating the e-mails originally. 

And so for me the foam pie incident, the 'humble day' moment or any of the other 'newsworthy' quotes were as naught when compared to Paul Farrelly's line of questioning on what News International and Harbottle & Lewis[i]  had done in the first place when looking at the e-mails. This line of questioning commenced with the following exchange: 

'Paul Farrelly: What is in that file? It has been reported as a collection of 300 e-mails, or a loose-leaf binder—what is it?
James Murdoch
: As you know, there is an ongoing criminal investigation. I think it would be wrong of me to talk about specific information or evidence that is subject to and could make problems for the police in doing the important work that they are currently doing.
Paul Farrelly
: I don't think it is going to cause problems for the police if you tell us whether it is A4, foolscap, e-mails, in a ring binder, loose-leaf—what is it?
James Murdoch
: It is paper. I think there are some e-mails, some documents—' 

So we immediately know that Harbottle & Lewis have either reviewed the e-mail evidence in paper format or printed it to paper for communicating the results of the investigation to their clients. Later on the questioning returns to the scope of the initial investigation and Paul Farrelly started to question James Murdoch on the motivation for instigating the Harbottle & Lewis investigation. For an MP looking to make the Murdochs squirm it was a clever question as the Murdoch's hands are tied in their response as they have to say that the investigation was ordered in order to get to the bottom of the criminality that had been taking place. Paul Farrelly's thinly veiled suggestion that the timing of the investigation would suggest that it was instigated as a response to unfair dismissal claims brought against New International (and therefore defend the organisation against those claims) and not in order to get to the bottom of criminality within the organisation is an important one, the motivation behind an investigation entirely colours the extent and focus of the investigation. The exchange was as follows: 

'Paul Farrelly: Clearly, we spotted in our report that this view coincided not so much with Mr Myler's arrival, but with the timing of the industrial tribunal actions that Clive Goodman and Glenn Mulcaire were planning. That begged the question of why these six individuals were named in there. Do you know why it was limited to these six individuals? 

James Murdoch: Why it was limited to those six individuals, I don't know. I was not there at the time and I cannot tell you the circumstances and the conversations that people had with Harbottle & Lewis or the terms of reference of that, but it had been viewed after the fact that it had been a thorough look at information, and based on that review, that opinion was issued. 

Paul Farrelly: Neville Thurlbeck is one omission that immediately jumps out. 

James Murdoch: Again, in hindsight we can all say, 'If somebody had looked at this,' or, 'If somebody had known something that was not known at the time,' but I cannot comment on why the terms and the scope were what they were.' 

To give him his due James Murdoch had previously agreed to the following:


'Paul Farrelly: In a follow-up to the session, could you provide us with the instructions that were given to Harbottle & Lewis, as well as the extent of the information that was given to them out of the totality of information that was available? That information would help us conclude what really happened. 
 

James Murdoch: If additional detail is required around those legal instructions, we will consult and come back to the Chairman with a way to satisfy you with the information that you'd like to have.' 

We then gather from the following exchange that News International had carried out their own data collection exercise: 

'Paul Farrelly: The investigation itself, which you and Colin Myler have described to us, was carried out by the IT department and overseen by the director of legal affairs, Jon Chapman, and the human resources—personnel—director, Daniel Cloke. Is that an accurate description? 

James Murdoch: That is my understanding.' 

And in a previous select committee hearing Colin Myler had mentioned the existence of 2,500 e-mails[ii] that had been reviewed. 

So in summary (and without the precise instructions to Harbottle & Lewis) we know: 

1.      News International's IT department carried out the data collection

2.      The e-mails now exist in paper format

3.      The committee suspects that the investigation was instigated to defend News International against employment claims but that News International say that it was to get to the bottom of criminality within the organisation

4.      James Murdoch was unable to easily explain the scope of the investigation

5.      The committee could easily identify data custodians who had not been looked at

6.      That only 2,500 e-mails had been provided to Harbottle & Lewis. 

What Should Have Happened? 

So what should the Murdochs been able to tell Paul Farelly about the investigation had they been well prepared or, perhaps more appropriately, differently prepared?  

They should have been able to immediately show the committee their letter of instruction to Harbottle & Lewis (or at least a letter from Harbottle & Lewis to News International which outlines their understanding of the internal investigation). They may well be able to provide this in the future, but it was certainly not something that they had readily at hand.  

Ideally they should be able to demonstrate that they had a third-party organisation come in and report on their IT infrastructure to show that all of the likely sources of information had been considered and either included or excluded for defensible reasons (eg we didn't look at backups as the system is designed for disaster recovery and so only holds data for 30 days before being overwritten, or we did look for personal e-mail archives as the organisation has a mailbox size limit of 250mb and so users regularly archive their mailboxes to local/network drives). It would then be best to show that a third-party organisation collected the data (as it means that any suggestion of impropriety can quickly be dispelled (why for instance were there only 2,500 e-mails from 6 data custodians?)) and that data was reviewed in native format as this is the only way that all of the information held within the e-mails can be seen (there is no BCC and other information in a printed e-mail). 

They should have been able to demonstrate that they (News International and Harbottle & Lewis) had jointly been through a process which enabled them to give positive reasons why each of the data custodians included in the exercise was included and perhaps more importantly why those who were marginal and excluded were excluded. 

This type of complete evidence could have been provided in the form of the Harbottle & Lewis instruction letter (or letter outlining their understanding of requirements), the third-party report on the News of the World IT infrastructure, and a comprehensive schedule which outlined why individuals were included or excluded and why data sources of the included data custodians were either included or excluded. 

Parallels, Lessons and Warnings 

There are very obvious parallels here between the phone hacking scandal and litigation, arbitration, and regulatory investigations. News Corporations current difficulties could have been avoided (if you like they could have agreed an early settlement) if they had properly assessed the damage early on in the process by demonstrating that they had reasonably searched for documentation in the course of their investigations.  There would I am sure still be difficult questions to answer but, if parties flounder when asked why individuals or data sources were (or were not) looked at, both judges and the opposing parties start to draw inferences from those stumbling responses, and are given further impetus to dig deeper. 

So if you are carrying out litigation, arbitration or a regulatory or internal investigation for a client make sure you do a very good job of recording your decisions for collecting (or not collecting) data as not only does it allow you to successfully defend any conclusion you may wish to draw from what you find but it could also mean that you settle early, save costs and save both your firm's reputation and that of your clients.

 

Through his firm i-Lit Limited (www.i-lit.co.uk), barrister turned technogeek, Mike Taylor, has advised law firms and their clients on e-disclosure best practice and strategy since 2006.

 



[i] Harbottle & Lewis have had a partial release from the client confidentiality duties by New International, in a statement News Corporation have said 'News Corporation's management and standards committee [MSC] can confirm that News International has today authorised the law firm Harbottle & Lewis to answer questions from the Metropolitan Police Service and parliamentary select committees in respect of what they were asked to do.

The MSC is authorised to co-operate fully with all relevant investigations and inquiries in the News of the World phone hacking case, police payments and all other related issues across News International, as well as conducting its own enquiries where appropriate.'

As Harbottle & Lewis couldn't comment on this piece even if I had asked them to it would be unfair to draw any conclusions about Harbottle & Lewis in this article and I intentionally do not do so.

[ii] As Robert Peston reported online at the BBC website http://www.bbc.co.uk/news/business-14099102

Published: 21/07/2011

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