The Cresswell Working Party, whose members were David Gold of Herbert Smith, Janet Lambert for Barlow Lyde & Gilbert and barrister Hodge Malek QC, reviewed the Commercial Litigators Forum paper on the subject (see Computers & Law, vol 14, iss 5), the US decision in the case of Laura Zubulake v UBS Warburg LLC (2003) (http://www.krollontrack.co.uk/legalresources/zubulake.asp), various other foreign cases and the Sedona Principles: Best Practices, Recommendations & Principles for Addressing Electronic Document Production. The matters considered were:
· how do the CPR and the Commercial Court Guide apply to electronic documents and are any changes required?
· should the
· how should costs relating to electronic disclosure be dealt with?
Legal Background
The Report includes a valuable and thorough review of the legal position, analysing the meaning of the term “document”, the extent of the duty of search with special reference to the digital environment, the experience of these matters in the
In relation to the duty of search, the Report seeks to classify electronic documents by reference to the status of the data concerned and, nodding in the direction of the classification in Zubulake v Warburg, suggests the following five categories:
(1) Active or online data: this is data which is directly accessible on the desktop computer. Examples of such data include material held on hard drives, filed documents and inbox and sent items in an e-mail system.
(2) Embedded data: this is data which is not normally visible when a document is printed, although it can be viewed on the screen.
(3) Replicant data (otherwise known as “temporary files” or “file clones”): this is automatically created by the desktop computer. Examples of such data include automatic saves of draft documents, temporary copies of opened e-mail attachments and recovered files automatically available following a computer malfunction.
(4) Back-up data: this is data held in a storage system.
(5) Residual data: this is material deleted from the user’s active data and stored elsewhere on the database.
It states “Whilst active data should be relatively accessible and it is not usually difficult to carry out a key word search for relevant information, the other forms of data are less accessible. In the case of residual data it may even be argued that it is not within a party’s control within the meaning of CPR r.31.8. Even if it is to be regarded as being in a party’s control the cost and burden of retrieval (often with the assistance of an expert) means that an application for such disclosure needs to be properly justified and confined”.
The Working Party reflects on the difficulty in searching for relevant information and confining that search. Among other possibilities the Report suggests that a court might define the extent of an electronic search by ordering disclosure of electronic information containing specified words or strings of words.
In its review of the work undertaken elsewhere, the Report includes a ringing endorsement of the “Sedona Principles” (see below).
The Sedona Principles
1. Electronic data and documents are potentially discoverable under Fed. R. Civ. P.34 or its state law equivalents. Organizations must properly preserve electronic data and documents that can reasonably be anticipated to be relevant to litigation.
1. When balancing the cost, burden, and need for electronic data and documents, courts and parties should apply the balancing standard embodied in Fed. R. Civ. P. 26(b)(2) and its state law equivalents, which require considering the technological feasibility and realistic costs of preserving, retrieving, producing, and reviewing electronic data, as well as the nature of the litigation and the amount in controversy.
2. Parties should confer early in discovery regarding the preservation and production of electronic data and documents when these matters are at issue in the litigation, and seek to agree on the scope of each party’s rights and responsibilities.
3. Discovery requests should make as clear as possible what electronic documents and data are being asked for, while responses and objections to discovery should disclose the scope and limits of what is being produced.
4. The obligation to preserve electronic data and documents requires reasonable and good faith efforts to retain information that may be relevant to pending or threatened litigation. However, it is unreasonable to expect parties to take every conceivable step to preserve all potentially relevant data.
5. Responding parties are best situated to evaluate the procedures, methodologies and technologies appropriate for preserving and producing their own electronic data and documents.
6. The requesting party has the burden on a motion to compel to show that the responding party’s steps to preserve and produce relevant electronic data and documents were inadequate.
7. The primary source of electronic data and documents for production should be active data and information purposely stored in a manner that anticipates future business use and permits efficient searching and retrieval. Resort to disaster recovery backup tapes and other sources of data and documents requires the requesting party to demonstrate need and relevance that outweigh the cost, burden, and disruption of retrieving and processing the data from such sources.
8. Absent a showing of special need and relevance a responding party should not be required to preserve, review, or produce deleted, shadowed, fragmented, or residual data or documents.
9. A responding party should follow reasonable procedures to protect privileges and objections to production of electronic data and documents.
10. A responding party may satisfy its good faith obligation to preserve and produce potentially responsive electronic data and documents by using electronic tools and processes, such as data sampling, searching, or the use of selection criteria, to identify data most likely to contain responsive information.
11. Unless it is material to resolving the dispute, there is no obligation to preserve and produce metadata absent agreement of the parties or order of the court.
12. Absent a specific objection, agreement of the parties or order of the court, the reasonable costs of retrieving and reviewing electronic information for production should be borne by the responding party, unless the information sought is not reasonably available to the responding party in the ordinary course of business. If the data or formatting of the information sought is not reasonably available to the responding party in the ordinary course of business, then, absent special circumstances, the costs of retrieving and reviewing such electronic information should be shifted to the requesting party.
13. Sanctions, including spoliation findings, should only be considered by the court if, upon a showing of a clear duty to preserve, the court finds that there was an intentional or reckless failure to preserve and produce relevant electronic data and that there is a reasonable probability that the loss of the evidence has materially prejudiced the adverse party.
On destruction of electronic data, the Report shows a good understanding of the problems which arise from destruction of material documents – and the problems that may arise where a duty to preserve is defined too widely. It reflects that “there is much to be said for the view that an obligation to preserve relevant documents arises once litigation is contemplated or has commenced” and comments that the general practice of solicitors in the Commercial Court is to advise clients to preserve documents which may be relevant once litigation is contemplated. It strikes me that it is likely that the acceptance of what I see as a relatively light burden of preservation may lead to a disparity in regimes: where the FSA or a similar overseer has jurisdiction then a heavier burden of preservation applies than is likely to apply in less regulated spheres. But it has to be acknowledged that the natural human desire is to bin the seemingly irrelevant and no amount of cheap electronic storage is going to overwhelm that urge entirely.
Electronic Disclosure in Practice
The purpose of the third section of the report is to draw the attention of judges and practitioners to the problems which arise in practice in relation to electronic disclosure. The aspects of electronic documentation which require separate consideration are listed as:
· the huge volume of documents which are created and stored (the report acknowledges that mobile phones can now hold as much data as a personal computer)
· the ease of duplication of electronic documents
· the lack of order in which electronic documents are stored
· the differing retention policies of the parties
· the significance of metadata
· the difficulty of disposing of electronic documents (eg the deletion of an e-mail does not usually erase the data from the system).
The Report also sees the absence of any meaningful guidance in the CPR or the Court Guide as part of the problem: “leading to parties taking very different stances in relation to the searches they carry out and the disclosure they give of electronic documents so that there is not necessarily a level playing field”.
The Report describes the stages a party to a commercial litigation dispute has to go through to comply with disclosure obligations in relation to electronic documents:
(1) identify how many of the documents which might be relevant to the case have been created by electronic means;
(2) identify whether these electronic documents have been preserved and where they might be stored;
(3) retrieve, and search for, any relevant electronic documents;
(4) conduct a review of the electronic documents; and
(5) then produce the electronic documents, ideally in an agreed format.
The Report states that the most common form of dispute in the context of electronic documents concerns the extent of the search required. Some take the view that a search through back-up data is proportionate and necessary and others believe that such a search would be disruptive to business and that any gains are outweighed by the substantial burden and expense of conducting the search. Where a search is sought of residual data (which would normally require the services of an IT expert), there are frequent disputes as to whether such a search can possibly be proportionate.
As the Report acknowledges, there are realistic limits to the extent to which a party can be expected to review electronic documents held by them:
It is usually not feasible, or even possible, for most parties to commercial litigation to review all data from their computer systems for disclosure purposes. A review of all potentially relevant documents (which can amount to tens of thousands of documents), their attachments and the metadata relating to those documents can be extremely time consuming and costly. Yet unless a certain level of review is carried out, key documents may be omitted from production, a party may be criticised for withholding documents or privileged material may be accidentally disclosed. A key word search can go some way to narrowing the documents which have to be reviewed. However, information as to the key words used by a producing party are often only revealed to the requesting party in the context of a specific disclosure application. Consideration needs to be given as to whether an earlier exchange of this information would assist in reducing the number of disputes and therefore the costs relating to disclosure of electronic documents.
In my view the Working Party’s lack of enthusiasm for the production of electronic documents which include metadata is surprising: “there will be a great deal of metadata disclosed to the requesting party which would not necessarily be available if a paper document was produced. This can encourage the requesting party to interrogate the producing party about the minute detail contained in that metadata, and to pursue an endless line of enquiry for further documents and information”. Surely such encouragement will tend to arise only where the original disclosure is shown by the metadata to be inadequate (or even misleading)? There is however also understandable concern about the difficulty in producing documents electronically whilst eliminating confidential or privileged parts – it can be done but there is no way to do that, so far as I am aware, which is reasonably affordable.
On costs, the Report asks all the right questions and, understandably, gives a flexible answer: “where substantial costs have been incurred in dealing with electronic disclosure, we consider that in appropriate cases, at the conclusion of the trial (or earlier if appropriate), Judges should give separate consideration as to the costs incurred in relation to electronic 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”.
Recommendations
The Working Party’s report is well worth reading in full but its recommendations were as follows:
4.1 The view of the Working Party is that in general the existing provisions of CPR Part 31, the Practice Direction supplementing Part 31 and the Commercial Court Guide provide adequate guidance to litigants in the Commercial Court and their legal advisers as to the manner in which disclosure documents including electronic documents or data should be given. The existing rules have the considerable advantage of flexibility, given the reasonableness and proportionality test in connection with the search for documents under CPR Rule 31.7 and the overriding objective in CPR Part 1. It would be both undesirable and impracticable to produce any formal rules or checklist that would circumscribe the proper exercise, on the facts of each case, of that test of reasonableness and proportionality.
4.2 We are conscious that there are problems in practice in relation to how documents held in electronic form are provided. This aspect falls outside the scope of the current report.
4.3 There is a wide divergence in practice between litigants as to document retention policies. Some businesses keep records of all documents generated in electronic form, whereas other businesses have a policy of routine destruction of documents. The law is unclear as to the extent to which a party is obliged to preserve relevant documents prior to the institution of legal proceedings. It is not appropriate for this Working Party to propose any changes in the law in this respect. The Working Party would emphasise that practitioners are expected to advise their clients once litigation is contemplated to preserve documents which may be relevant in legal proceedings.
4.4 The Working Party observes that there is considerable divergence in practice as to what searches are carried out for relevant data in respect of information held in electronic form. With the increasing use of computers over recent years, information held in electronic form has become an extremely important source of evidence. The Working Party considers that it is important to bring home to practitioners and litigants the need to search for information held in electronic form when providing disclosure. The Working Party recommends that the disclosure statement within the meaning of CPR Rule 31.10, the Annex to the Practice Direction supplementing Part 31 and the relevant practice form (N265) should be amended to make clear the extent to which a search has been carried out/has not been carried out to locate electronically held data. It is appreciated that this is a matter for the Rules Committee as to whether this recommendation should be implemented and the precise form the amendments should take.
4.5 The Working Party considers that the
The proposed new paragraphs are as follows:
E3.1A All parties should have regard to issues which may specifically arise concerning electronic data and documents:
(1) Rule 31.4 contains a broad definition of a document. This extends to electronic documents, including e-mail and other electronic communications, word processed documents and databases. In addition to documents that are readily accessible from computer systems and other electronic devices and media, the definition covers those documents that are stored on servers and back-up systems and electronic documents that have been “deleted”. It also extends to additional information stored and associated with electronic documents known as metadata.
(2) The parties should, prior to the first Case Management Conference, discuss any issues that may arise regarding searches for and the preservation of electronic documents. This may involve the parties providing information about the categories of electronic documents within their control, the computer systems, electronic devices and media on which any relevant documents may be held, the storage systems maintained by the parties and their document retention policies. In the case of difficulty or disagreement, the matter should be referred to a judge for directions at the earliest practical date, if possible at the first Case Management Conference.
(3) The parties should co-operate at an early stage as to the format in which electronic copy documents are to be provided on inspection. In the case of difficulty or disagreement, the matter should be referred to a Judge for directions at the earliest practical date, if possible at the first Case Management Conference.
(4) The existence of electronic documents impacts upon the extent of the reasonable search required by Rule 31.7 for the purposes of standard disclosure. The factors that may be relevant in deciding the reasonableness of a search for electronic documents include (but are not limited to) the following:-
(a) The number of documents involved.
(b) The nature and complexity of the proceedings.
(c) The ease and expense of retrieval of any particular document. This includes:
(i) The accessibility of electronic documents or data including e-mail communications on computer systems, servers, back-up systems and other electronic devices or media that may contain such documents taking into account alterations or developments in hardware or software systems used by the disclosing party and/or available to enable access to such documents.
(ii) The location of relevant electronic documents, data, computer systems, servers, back-up systems and other electronic devices or media that may contain such documents.
(iii) The likelihood of locating relevant data.
(iv) The cost of recovering any electronic documents.
(v) The cost of disclosing and providing inspection of any relevant electronic documents.
(vi) The likelihood that electronic documents will be materially altered in the course of recovery, disclosure or inspection.
(d) The significance of any document which is likely to be located during the search.
It may be reasonable to search some or all of the parties’ electronic storage systems. In some circumstances, it may be reasonable to search for electronic documents by means of keyword searches (agreed as far as possible between the parties) even where a full review of each and every document would be unreasonable. There may be other forms of electronic search that may be appropriate in particular circumstances.
E4.2A Where an application is made for specific disclosure the party from whom disclosure is sought should provide to the applicant and to the Court information as to the factors listed in E3.1A(4) above and its documents retention policy, to the extent such information is relevant to the application. At the hearing of the application, the Court may take into account the factors listed in E3.1A(4) as well as the width of the request and the conduct of the parties.
For the full text of the Working Party’s report, see www.courtservice.gov.uk/cms/media/electronic_disclosure1004.doc
