E-disclosure: A Practical Guide

March 1, 2006

The amount of electronic “traffic” that is created nowadays is mind boggling.  An average laptop is thought to contain the equivalent of approximately 30 million A4 pages of simple text which, if laid end to end, would stretch for 9,000 kilometers, roughly the equivalent of a journey from London to Bangkok. For those involved in disclosing documents in litigation, grappling with the sheer volume of electronic documents can pose a significant challenge. This is particularly true in cases involving IT businesses, given the complexity and volume of electronic documentation that tends to be generated in IT projects.

New CPR, Part 31
The issue of the disclosure of electronic documents in litigation was addressed in 2004 by a Commercial Court Working Party chaired by the Honourable Mr Justice Cresswell (see vol 15, issue 4).  That report led to amendments to the Commercial Court Guide. It was also the catalyst for amendments to the Practice Direction to Part 31 of the Civil Procedure Rules, which came into force on 1 October 2005.

The changes to the Part 31 Practice Direction are fundamental and should not be underestimated.  It is essential for anyone who is or may be involved in litigation to be aware of its ambit.

Prior to 1 October 2005, Part 31 of the CPR already outlined the duties of a party to litigation in relation to disclosure of documents to its opponents.  A party has to disclose documents on which it relies. It also has to undertake a reasonable search for documents which harm its case or support or harm its opponent’s case.  So far, so good. However, there has always been a little uncertainty as to how these rules should be interpreted with respect to electronic documents.  For example, what electronic storage media and information should fall within the definition of document?  Should the “reasonable search” be interpreted differently in the case of electronic documents? The new Practice Direction to Part 31 seeks to resolve this uncertainty.

Key Provisions
The key provisions that need to be noted by businesses and their lawyers are:-

  • The definition of documents now includes electronic documents – and not only those that are readily accessible from computer systems and other electronic devices and media but also those stored on servers and back-up systems.  Importantly, it also extends to electronic documents that have been “deleted” and to metadata (embedded data not visible on the document’s face, such as previous amendments).
  • In deciding on the reasonableness of the search for electronic documents, regard should be had to the ease and expense of retrieving these types of documents, including how accessible they are, their location, the likelihood of locating relevant data, the cost of recovery, the cost of disclosure and inspection and the likelihood that the documents may be materially altered in the course of the disclosure process.
  • It may be reasonable not to search all of a client’s electronic storage systems. It may be reasonable to search for electronic documents using key word searches rather than reviewing the entirety of each and every document.
  • The parties should discuss any issues arising in relation to the search for and preservation of electronic documents prior to the first Case Management Conference.  Any disagreements between the parties should be resolved at the first Case Management Conference if possible.
  • The parties have to sign a newly worded disclosure statement explaining their electronic disclosure actions and including a description of all electronic documents not searched for.

Whilst parties may hitherto have been able to hide behind the ambiguous wording of Part 31, it is abundantly clear that this will no longer be possible.  As soon as a dispute is on the horizon, issues relating to the disclosure of electronic documents will have to be dealt with head-on, not only between lawyer and client, but also between opponents.

Costs Risk
Although not specifically adopted in the new rules, the Cresswell Report sets out a stark warning to parties about possible costs penalties in relation to the electronic disclosure process:

“At the conclusion of the trial (or earlier if appropriate), judges should give separate consideration as to the cost incurred in relation to e-disclosure and who should pay those costs, having regard to the reasonableness and proportionality of the disclosure requested and given, the relevance of the disclosure given or ordered to be given to the issues in the case presented at trial, and the conduct of the parties generally in relation to disclosure.”

This guidance should not be ignored.  It is prudent to assume that this commentary will provide a reference point for judges when dealing with the new rules.

Practical Steps
Armed with the knowledge that these provisions are important and need to be acted upon at an early stage in litigation, what should businesses and their lawyers do from a practical perspective when faced with a dispute involving the disclosure of large numbers of electronic documents?

This question can be addressed with reference to each constituent element of a typical e-disclosure project. 

Document preservation

  • Lawyers should get to know their client’s IT personnel right from the start.  They should obtain a thorough understanding of the IT infrastructure and any document management/retention policies in place.
  • The likely location of documents should be identified.
  • If the scale of the e-disclosure task and resourcing within the business allow, an “IT champion” should be appointed to act as the main interface with the lawyers – this should be someone with the necessary authority to implement and police e-disclosure within the business. Lawyers should ensure that the IT champion is adequately supervised.
  • A note should be sent to all employees who are likely to hold relevant data informing them of their duties to preserve documents and data.
  • All routine data destruction should be suspended, eg the rotation of back-up tapes and the recycling or repair of hardware.
  • Consideration should be given to imaging hard drives, project and exchange servers (to counter any anticipated arguments regarding deliberate destruction of documents).
  • Lawyers should correspond with their opponent in relation to the preservation steps they have taken and what they expect their opponents to do.
  • A record should be kept of the steps taken for later inclusion in the disclosure statement.

Document collection

  • It may not be necessary to collect everything that has been preserved
  • Likely sources of data should be identified – eg floppy discs, CDs/DVDs, desktops, laptops, databases, servers, back-up tapes, home PCs, off-site storage, mobile phones, voicemail, hand-held devices, PDA devices and portable data storage media.
  • The scope of a reasonable search should be considered with reference to the Part 31 Practice Direction criteria.  For example, back-up tapes or deleted data may not be considered to be in scope because of the expense of retrieving this data.
  • The data should be copied to CDs/DVDs/hard drives, ensuring that its integrity is maintained and original data is not altered in any way. The assistance of specialist document management consultants may be required to undertake this task.
  • Arrangements for disclosure should be discussed with opponents (involving document management consultants, as appropriate). Examples of what might be discussed include what data should be considered in scope, the use of key words when processing data and the format of the final disclosure data set.
  • An audit trail should be maintained.

Document processing
If the copy data is voluminous, businesses and their lawyers should consider the use of a litigation support database.  There are an increasing number of options on the market.

The vast majority of electronic data is usually irrelevant to the issues and disputes.  Steps should be taken to cull the data, for example:

  • eliminating irrelevant operating system files
  • de-duplication
  • eliminating data which falls outside certain date ranges
  • culling the data generated by certain individuals
  • eliminating data not identified by key word searches.

An audit trail should be maintained.

Document review and disclosure
A common approach if the data set is contained on a database is for the lawyers to decide on categories for the sorting of the data (eg disclosable, privileged, irrelevant). After review, the documents can easily be dragged into the requisite folder.

Lawyers should agree a disclosure format with their opponents. Issues to consider include:

  • Whether the data is required in 2D format (eg read only pdf files) or native file format. The latter is more desirable if it is thought necessary to review a document in its original format – for example, an Excel spreadsheet and all its constituent “layers”. A native file review also allows access to metadata.
  • Whether a list of documents will be provided. There is no specific guidance in the Part 31 Practice Direction in relation to the way in which disclosable electronic documents should be presented to an opponent. If the case involves huge numbers of electronic documents and the use of a litigation support database then in all probability the format of disclosure will closely follow the fields of metadata extracted from that database. 

An audit trail should be maintained.

Common Pitfalls
When dealing with a dispute involving large numbers of electronic documents, a considered and systematic approach is essential. Common e-disclosure pitfalls include the following.

  • Failure to formulate a methodical and thorough e-disclosure plan in relation to document preservation, collection, processing, review and disclosure. If planning is non-existent or haphazard, this is likely to result in shortcomings in the final disclosure list and criticism from an opponent and/or the court.
  • Lack of buy-in from the business. If the business is not fully briefed and/or fails to take responsibility in relation to the e-disclosure process, this can result in crucial errors, for example, key sources of electronic documents being overlooked or preservation steps being inadequate.
  • Underestimating the volume of electronic material and/or the time needed to complete the e-disclosure process. Enough time must be allowed to complete the process. Lawyers should understand the IT systems of their client businesses and scope the likely volume of electronic documents at the earliest possible opportunity. If the e-disclosure exercise is rushed, errors are likely to creep in.
  • Underestimating the cost of the e-disclosure exercise. For example, failure to appreciate the cost of a litigation support database or the cost of external document management consultants.
  • Failure to undertake the e-disclosure process in a reasonable or proportionate way. The guidelines in the Part 31 Practice Direction must be borne in mind at all times. In particular, the factors set out in the Practice Direction in order to decide the reasonableness of the search for electronic documents should always be considered.  The e-disclosure process is very much “a horses for courses” experience. Great expense should not be incurred when the circumstances of the case simply do not justify this.
  • Failure to prepare for the first Case Management Conference. The requirement in the Part 31 Practice Direction that the parties to litigation discuss e-disclosure issues before the first Case Management Conference means that the e-disclosure process needs to be considered as soon as possible after litigation is anticipated. Once an e-disclosure plan is formulated, lawyers should then contact their opponent and/or their specialist IT advisers.
  • Failure to maintain a proper audit trail, with the result that the steps taken may not be able to be described or justified, if this is required.

The clear focus on e-disclosure in the CPR and the issues discussed in this article serve to emphasise the need for IT businesses to ensure that a good document management policy is in place at the outset of every project. One of the most significant problems which businesses encounter in IT disputes is the failure to manage documents properly.

This inevitably results in difficulties. For example:

  • failure to locate where relevant documents are held
  • there being little or no order to documents collected
  • inability to access documents which have been password protected
  • disappearance of documents belonging to key individuals
  • inability to evidence crucial elements of the case, eg testing steps and termination correspondence.

The implementation of project protocols covering such issues as storage of emails and hard copy documents, version control, classification of documents, backing up of electronic documents/servers, deletion of documents, password protection and arrangements on termination would greatly reduce the time and costs of any subsequent e-disclosure exercise.

It is still early days and further judicial comment on e-disclosure issues is awaited with interest. However, it is hoped that regard to the steps and warnings above will make the task more manageable and will minimise the risk of criticism from an opponent and/or the court.

Philippa Bennett is a litigation partner at DLA Piper.