Bray & Gillespie is a US eDiscovery case which has attracted attention partly because its outcome was so predictable and partly for the strong views expressed by the judge as to the conduct of those involved. What would have been the outcome if the same facts came up in a UK court?
The US courts are seeing an increasing number of cases in which the basic competence of the lawyers is called into question and, if found wanting, is punished by sanctions. These rarely involve a bare failure to understand the technology even where it is the technology which is at the heart of the case. The defect is not that the lawyers did not understand computers but that they had not read the rules and the opinions which make it clear that the electronic documents must be handled properly. This compartmentalising of the technology itself (on the one hand) and the rules relating to its use (on the other) may seem to be a distinction without a difference but it matters very much; the lawyers are hired for their legal knowledge and skills and cannot excuse themselves for failing to know the law.
If you were to say to a lawyer “Do you know how an MS SQL database works?” he might reasonably say that he does not. If, instead, your question is “Do you understand the extent of your obligations to disclose documents?”, he cannot answer “no” without admitting to professional incompetence. One of the problems in this area is that lawyers conflate the two questions and believe themselves exempt from understanding anything at all about the subject.
UK lawyers tend to regard this as a US problem. They are right, but only for the unmeritorious reason that the English courts have not imposed or enforced the rules which require, if not necessarily disclosure of electronic documents, at least a proper consideration as to whether they should be disclosed. If you ask an English lawyer that question “Do you understand the extent of your obligations to disclose documents?” and follow it with the question “Are you familiar with the Practice Direction to Part 31 CPR?”, then the answer must be either “yes” or “no” to both of them. If you are not familiar with the Practice Direction then you do not understand your obligations.
Since many judges do not appear to understand the obligations either, UK lawyers might have been forgiven at least down to the publication of the judgment in Digicel v Cable & Wireless last year. US lawyers have had no such excuse, since a constant stream of judgments and opinions must have alerted even the dumbest of them to the need to do some research when electronic documents occur – or so you would think (you might also think that cases not involving electronic documents would be pretty rare these days, and you would be right).
I thought it would be interesting to take one of the US e-disclosure competence cases and work through how its facts would be handled in the courts of England and Wales. It immediately becomes obvious that I need to distinguish between “would be handled” and “should be handled” since the model answer, the one you would hope for in an examination (if this was a subject on which anyone was ever examined, which it is not) is not what would happen in most courts.
I pick on a case called Bray & Gillespie, partly because it is topical and partly because it lacks the wacky extremes which some of these cases suffer from – you can look at some of these US eDiscovery opinions and reckon that mediaeval debates about the number of angels dancing on a pin-head are relatively sane by comparison. Bray & Gillespie has real life facts which might recur in any court, and a conclusion which makes sense anywhere.
I borrow the summary of the basic facts from Ralph Losey’s Plato’s Cave article (you will find the relevant section just south of the angry ostrich and west of the music). Ralph’s summary is as follows:
A new order by Magistrate Judge Karla R. Spaulding illustrates this later point perfectly. Bray & Gillespie Management LLC v. Lexington Ins. Co. 2009 WL 2407754 (M.D.Fla. August 3, 2009). Severe sanctions were entered against the plaintiff and its lawyers for not producing hotel guest attendance records. The plaintiff’s paper lawyers only looked for these records in warehouses full of papers. When they found them in segments, they only made selective disclosures of what they found. They were caught and sanctioned. The whole thing could have been avoided by simply producing the electronic guest records that were, of course, at all times readily available in the plaintiff’s computer system. They did not even try to look there, even though a native production was specifically requested and ordered by the court.
As an excuse plaintiff had a legal secretary for in-house counsel file an affidavit where she said it was impossible to download or export the data from their software, IQWare. She actually swore that the only way to get the information was to print it out onto paper. This is of course absurd, as a ten second search shows that their software is just a customized MS SQL database. It would have been easy to copy the database and turn it over, but the lawyers and their assistants only understood paper. As a result, they will now almost certainly lose the case. Judge Spaulding has entered a report and recommendation that plaintiff’s complaint be dismissed with prejudice and fees taxed against the plaintiff, now in bankruptcy, and its lawyers, not in bankruptcy, for their intentional, bad faith withholding of evidence and defiance of court orders requiring production of electronic evidence.
Before I look at this case through English eyes, there are a couple of points worth making to head off the suggestion that the judge overreacted here – to UK eyes, some of these US discovery judgments appear to stand more on technical breaches than on the actual value of the documents being fought about. This was a claim worth $4 million or so; it concerned loss of profits measured by the occupancy of hotel rooms and there was a discrepancy between the losses disclosed in the produced documents and the financial claim. The non-disclosure of the whole occupancy record was therefore material to the claim and the failure to produce it was more than a merely technical breach of discovery obligations.
A final point before I start: this application related to sanctions for breach of an earlier order. I propose to approach the UK parallel as if it were a first case management conference. I take the basic facts and look first at how they should be approached under the UK civil procedure rules and then at what generally seems to happen in practice.
How it should be done
The lawyer will speedily conclude that the occupancy record is relevant to a claim based on lost profits. I use that word “relevant” only in the context of the broadest decision-making, because “relevance” is not in fact the test under the English Civil Procedure Rules (CPR).”Relevance” at this level means merely that it has something to do with the issues, that enquiry should be made as to the whereabouts of the source, and that steps should be taken to preserve it.
Having established that the records exist, the lawyer then considers whether they are documents. A “document” is anything on which information of any description is recorded (Rule 31.4 CPR), so the individual database records, the database itself and, strictly, the computer on which it sits are all “documents”.
Disclosure in the first instance is limited to standard disclosure (Rule 31.5 CPR) , and the giving party self-starts as to what is disclosable; that might be supplemented later by an order for specific disclosure (Rule 31.12 CPR); the test for standard disclosure (Rule 31.6 CPR) is not “relevance” but is limited only to documents on which the giving party relies and those which adversely affect his own case, which adversely affect another party’s case, or which support another party’s case (Rule 31.6 CPR).
There is no question but that these records are disclosable. Some of them, however, apparently exist already as paper records. The lawyer must decide whether the paper records are adequate, both as to their extent and as to their evidential value relative to the whole database. He is required, under Rule 31.7, to make a “reasonable search for documents”. This duty is expanded upon in relation to electronic documents by Paragraph 2A.4 of the Practice Direction to Part 31 CPR which sets out the factors to be weighed. In this case, there is no need to search for the records since the database itself has been found. The lawyer is entitled (and, indeed, obliged) to consider whether the costs of extracting information from the database are justified by their likely value.
He will get an estimate of the costs for searching and extracting data from the database. There will be circumstances in which that cost is not justified – for example, where particular issues arise in extraction and where other records exist. In this case, the paper records which have been found form an incomplete history and the electronic source proves to be a straightforward MS SQL database, so it is not difficult to conclude that the database must be extracted and searched.
Armed with the costs estimate and the other factors, the lawyer will have a discussion with his opponent, giving him enough information for a sensible and cooperative discussion to take place (Paragraph 2A.2 of the Practice Direction to Part 31 CPR). They will also discuss the form in which the documents, including the electronic records, are to be provided for inspection. Lastly, they will debate how the electronic data is to be searched e.g. by agreeing keywords (Paragraph 2A.5 of the Practice Direction). The opponent may take a different view – that more or less is required, that he expects to be given a copy of the original database (at one extreme) or paper records of everything relied on (at the other extreme); they may argue about the keywords. The lawyers will decide what they can agree and what is disputed and attend the case management conference ready to argue their respective positions. The judge is not bound by what they have agreed and may order something different; he may not be satisfied that he has all the facts, and can send the parties away for further fact-finding and discussion.
The upshot of this process should be an order defining the scope of disclosure, any methods etc which have been settled on, and a time limit.
Other possible scenarios
The range of possibilities is infinite. The more obvious ones are the following:
- The giving party fails to identify the occupancy database or its records as “documents” and so does not consider whether they are disclosable. Neither the opponents nor the judge object or comment until, very late in the day, someone challenges the basis for the computation of loss. Delay and expense results and, possibly, a settlement on poor terms.
- The giving party identifies the database as potentially disclosable, but asserts in his disclosure statement that it is disproportionately expensive to extract the data, probably without producing evidence of that; correspondence ensues and the timetable for the case is disrupted whilst the application is contested at some expense.
- The giving party does all the right things, but his opponent claims that the proposal to dump the records on him in electronic form is itself disproportionate because he is not equipped to handle them; the giving party produces the comparative costs of handling the data electronically and of printing it and an application is made at which the judge must balance the competing assertions (this is really the same as the earlier options with added blood and costs).
- The parties agree on an entirely electronic mutual disclosure and exchange; the judge endorses the agreement perforce but insists that the trial bundles are to be printed multiple times
It must be emphasised that it is not a foregone conclusion that the data must be extracted, searched and delivered for inspection electronically. To take an obvious, albeit extreme, example not relevant on the facts of this case, if the receiving party is a litigant in person he may well succeed in arguing that he must have paper documents. In general, however, it should be no answer for a firm of solicitors to say that they are not equipped to handle electronic records; if they do, their opponents must equip themselves to argue that they themselves should not suffer in costs as a result.
There is no concept in the UK courts of sanctions in the sense of a financial penalty beyond reimbursement of costs wasted as a result of another party’s conduct. There is a jurisdiction to award costs against lawyers personally, but this is rarely invoked. On the other hand, the award of costs against a losing party is the norm (that this happened in Bray & Gillespie is a mark of extreme judicial displeasure) and the proportion of those costs may increase if the court thinks that appropriate; the lawyer may then have to fight with his client as to who picks up the bill.
Since we do not in the UK report many judgments about case management, it is hard to generalise as to the reaction of judges in circumstances like this. The outrage which the judge expressed against the lawyers (and which I have seen in other judicial Opinions) seems rather extravagant by UK standards, which is not to say that the occasional judicial tantrum would necessarily be a bad thing.
There is, of course, great variation between courts in the US as in the UK and it would be wrong to point to the outcome in Bray & Gillespie as necessarily representative. It is, nevertheless, in line with other reported outcomes (and increasingly so as to sanctions) and, as a result of wider reporting of US cases, lawyers there might be expected to anticipate a penalty for what was, in this case, a breach of an order as well as non-compliance with the rules.
Our rules, and in particular the requirements of the Practice Direction to Part 31 CPR, are ignored daily in the courts at all levels, by parties and judges alike. Often, no injustice results or, at least, none that the parties are aware of, and you will not find me implying that parties must always give disclosure electronically. Two evils, however, result from the failure by lawyers and judges to exert rigourous control over disclosure at the case management stage. I have referred to one, namely the late realisation by one or both parties that there is a hole in the evidence which needs to be filled, with all the delay and additional expense which result.
The other is more pernicious and more subtle. The clients do not return, turning their backs not just on the lawyers who let them down last time but on the court system as a whole. If it takes the occasional judicial hissy fit to make the lawyers comply with their obligations, then bring it on.