Emerging Electronic Disclosure Trends

March 1, 2006

As with many other countries around the globe, the UK has experienced a rapid increase in the use of technology within the business world over the past 10 years. Electronic disclosure has only now become a major issue for U.K businesses following the recent amendments to the Practice Direction to Part 31 of the Civil Procedure Rules which were issued in October 2005. The amendments require a much more rigorous approach to the way electronic documents are examined and disclosed by businesses and their lawyers. They also clarify the obligation on businesses and their lawyers to consider the availability and relevance of electronic documents at the very earliest stages of litigation.

In 2005, electronic discovery was one of the most discussed topics among US legal professionals, for two main reasons: (1) the large number of high stake, multi-million dollar cases involving electronic data, and (2) the proposed changes to federal and state rules of civil procedure relating to electronic evidence. Similarly the UK saw a rapid increase in interest from lawyers in the issues and challenges that the disclosure of electronic documentation can create.

Experts in both the UK and USA anticipate that rapidly developing case law, statutory changes and technical developments in 2006 will mean that this issue will continue to be a fertile source of discussion for legal professionals.

Statutory guideline and rule changes
As discussed above, the amended Practice Direction to CPR, Part 31 means that businesses and lawyers in the UK are going to have to be far more rigorous in their approach to electronic documentation.

Following Mr Justice Cresswell’s Working Party report to the Commercial and Admiralty Court (see vol 15, issue 4), the Practice Direction to Part 31 of the CPR was updated to reflect many of the recommendations made. English and Welsh lawyers now find themselves in the strange position of having to comply with more regulatory guidance than their US counterparts but, in most cases, with significantly less experience. In all likelihood, 2006 will see the testing of the amended Practice Direction as well as a growing understanding of this area within the legal profession. Costs will probably be at the top of many client’s and lawyer’s agendas; it seems likely that before too long a reported case will significantly clarify the position.

In 2005 electronic discovery rulings continued to develop in the USA. Forward momentum continued both at the federal and state level, including the judiciary making significant progress toward adopting changes to the Federal Rules of Civil Procedure that address the handling, preserving and production of electronic information. The most notable topic for 2006 will probably be the promulgation of the Amendments to the Federal Rules of Civil Procedure, which should take place in December 2006. While these rules are likely to go into effect officially in late 2006, many judges have started to opine as to whether litigants and their lawyers should be following the proposed amendments to the Rules now.

Evidence Integrity
In the UK, the Practice Direction to CPR, Part 31 clarifies that an integral part of any electronic document is the metadata associated with it (ie the data about the document itself, such as the “to” “from” “cc” “bcc” and date/time stamp on e-mails). Most importantly, metadata can reveal the “who” and the “when” about document creation, access, printing and editing. 

Lawyers and litigants must be aware that metadata can be altered irrevocably if the electronic document is handled incorrectly and this has obvious implications if the document in question is later relied on in court. With a simple action, such as clicking onto a document, having the potential to alter a crucial piece of metadata, lawyers need to ensure a forensic copy is obtained in order to preserve the data in its entirety.

Less obviously, but of great importance with regard to the professional’s ability to review documentation efficiently, is the reliance that all electronic document review tools place on metadata. When a database of potentially relevant documentation is produced it is the metadata relating to individual documents that these databases use to reference each file. If a series of files have all had their “date created” changed by the act of copying the data from one piece of media to another and at a later date a lawyer wants to sort the documents chronologically, it will not be possible to do so without a great deal of time-consuming and expensive remedial work, as all files will appear to the database as having been created on the same date (the date the documents were copied). 

Due in large part to the significance of metadata, those who wish to review electronic documentation on paper will soon find this method extremely impractical. Lawyers risk losing vital metadata (blind copyee’s to an e-mail for example) which is usually lost when e-mails are produced on paper.

The amended Practice Direction to CPR, Part 31 explicitly includes “deleted” electronic documents as still falling within the definition of a document for the purposes of disclosure. The recovery of deleted data is a more expensive process than the collection and review of data that has not been deleted and so related work is more likely to be deemed as disproportionate and/or it is more likely that disclosing parties will claim that it is unreasonable to disclose such material. In 2006, expect to see an increase in applications for specific disclosure of deleted documentation. On the back of that, it is extremely likely that the number of applications to shift the cost of that recovery to the requesting party will also increase.

Electronic discovery case law in the USA has historically focused on issues relating to preservation requirements, cost allocation and spoliation rather than the issues surrounding metadata and deleted data. Now that courts have had time to generate opinions on a broader range of electronic discovery issues, judges are beginning to hone in on more detailed expectations when it comes to preserving and producing electronic information. Williams v Sprint/United Mgmt Co., 2005 WL 2401626 (D.Kan. Sept. 29, 2005), a late 2005 decision, flagged metadata (defined as “data about data”) as one such topic open for judicial and statutory clarification. Not only did the Williams decision identify metadata as an advancing topic, it also issued metadata guidelines for parties producing information in the “ordinary course of business”.

In Williams, the court held that “ordinary course of business” document productions must include intact metadata unless the producing party objects in a timely fashion to the metadata production, the parties agree not to include metadata or the producing party requests a protective order. Although Sprint failed to produce metadata in that case, the court declined to award sanctions, noting “.the production of metadata is a new and largely undeveloped area of the law. This lack of clear law on production of metadata, combined with the arguable ambiguity in the Court’s prior rulings, compels the Court to conclude that sanctions are not appropriate here”. While Sprint escaped sanctions in that case, the Williams court provided some much needed guidance for all practitioners in the USA. In 2006, parties in the USA failing to comply with metadata production obligations are unlikely to receive judicial reprieve.

Meet & Confer
The revised Practice Direction to CPR, Part 31 requires parties to discuss, at the outset of the litigation and where possible prior to the first Case Management Conference (CMC), issues that may arise relating to the disclosure of electronic documents. Parties must also co-operate at an early stage as to the format in which electronic documents will be exchanged. It is crucial, therefore, for lawyers to be familiar with their clients’ IT systems and processes prior to the first CMC. This can potentially be an enormous task as national and multi-national organisations store data on a wide variety of storage devices, usually at disparate locations. Failure of parties to give appropriate consideration to these issues and communicate with the other side at the very earliest stages of the litigation with regard to the disclosure of electronic documentation could result in future negative cost implications, particularly if that failure has caused delays and additional costs.

Lawyers also need to be aware of the range of electronic document types in their clients’ control prior to the first CMC. If they anticipate, or are aware of, a large variety of documents in differing formats, they must consider the potential complexities involved in the retrieval, searching, review and production of their document collection.

There are a vast number of electronic file types, most of which require their own support application in order to review the information contained within them. Depending on the support capability of the review tool the legal teams are using, this can add significant monetary and human resource costs if it is necessary (as it almost certainly is) to ensure that all the relevant data is opened properly and reviewed in its native format (to maintain the integrity of the data).

In 2006, US courts are likely to place a heightened requirement on parties to communicate about electronic discovery issues. Time and time again, parties have been forced to dole out millions of dollars in sanctions or reproduce entire document sets because of a failure adequately to communicate with the opposing parties. Judges have indicated over the past several years that they have less patience for this type of conduct, and sanction awards are likely to continue to increase in significance and size. 

In the USA, legal professionals anticipate that courts will expect parties to address a variety of electronic discovery topics on their own before seeking the court’s assistance. Some of the topics parties should consider include preservation, pre-conference orders, production format, cost allocation and inadvertent disclosure of privileged information. 

The judiciary also shows a growing trend in requiring plaintiff’s counsel to set forth clear requirements in their discovery requests or to accept some of what has traditionally been a headache for defence attorneys. As noted by a Maryland court in Hopson v Mayor and City Council of Baltimore, 2005 WL 3157949 (D.Md. Nov. 22, 2005), “[t]he days when the requesting party can expect to ‘get it all’ and the producing party to produce whatever they feel like producing are long gone.electronic discovery is not played on a level field. The plaintiff typically has relatively few electronically stored records, while the defendant often has an immense volume of it. In such cases, it is incumbent upon the plaintiff to have reasonable expectations as to what should be produced by the defendant.”  

Document Repositories
The Practice Direction amendments for CPR, Part 31 mean lawyers should now consider the methods through which they disclose electronic documents if they are to fulfil the increasing requirements the courts impose. Sophisticated technology exists to enable legal teams to filter electronic documents for relevance and significantly reduce their document collection to a more manageable review set.

These solutions include the scanning and indexing of paper documents into electronic format for inclusion with their electronic counterparts into a single online document repository. As well as providing reviewers with the ability to search through and filter the documents, these tools enable teams to place electronic “post-it” notes, highlight sections on documents, categorise documents as relevant or privileged and view electronic documents in their native file formats.

With the existing tools, lawyers and their clients need not worry about additional investment in software in order to integrate all their documents into one repository. All they need is an Internet connection as solutions exist whereby legal teams simply access their database of documents securely online. These are fast becoming the popular solution for lawyers who need to search, review and produce vast volumes of paper and electronic documents.

These sophisticated techniques for managing and disclosing their electronic documents are already used extensively throughout the USA. Law firms, corporations and government agencies have realised that failing to implement technological solutions will put them at a disadvantage in a dispute.

Technology trends
Electronic documents can generate huge volumes of data to be reviewed for disclosure. A network hard drive can hold 40 gigabytes of data which, if printed to paper, could weigh 20 metric tonnes. By using specialised proprietary technology that (a) limits the data to relevant time periods and relevant document custodians, (b) searches the data by keywords, and (c) eliminates duplicate copies of electronic documents, this universe of electronic documents can quickly be reduced to a more manageable set.

In the coming year, processes for gathering and filtering data from users and systems in preparation for discovery will have great impact on corporate litigation practices. As corporations of all sizes are being required to preserve and produce electronically stored information, the practices for capturing this data and then winnowing it down to a potentially relevant set are critical. In 2006, companies should aim to work closely with their legal counsel and electronic evidence experts to obtain a more solid handle on electronic discovery as data preservation, gathering and filtering exercises become more frequent and routine. 

Furthermore, technology tools, such as online document repositories, will continue to improve in 2006, giving lawyers more control when managing volumes of both paper and electronic documents. These online database tools have become integral in saving law firms and their clients time and money when conducting document reviews and preparing document sets for production. Features added in past years to streamline document review – such as robust Boolean and concept searching, the ability to find duplicate documents, and document annotation and categorization features – will be improved and supplemented to put powerful production, case management and trial presentation capabilities at lawyers’ fingertips. Expect in 2006 to see up-to-date litigators using increasingly sophisticated filter and review techniques to provide best service to their clients.

Finally, look for continued focus on up-and-coming high tech gadgets. Common high-tech toys, such as PDAs, cell phones with e-mail capabilities, USB drives, and instant messaging tools, will play an increasingly important role in litigation. As technology improves in 2006, other essential sources of electronic evidence will surface, and practitioners should keep up with these “techie” advancements. 

In light of the recent changes, companies should be thinking more carefully about what documents they create, how they store them and how they decide when to dispose of them. In all likelihood, the trend will be towards a more US-style attitude towards the disclosure process, in which electronic data is an integral part of disclosure and where the courts are unwilling to tolerate the destruction, damage or alteration of electronic evidence.

Michael Taylor, legal consultant for Kroll Ontrack, is responsible for providing consultancy and advice with regards to the appropriate use of technology in UK practice. Michael is a non-practising barrister.