Time to take the next steps: a Hong Kong eDiscovery conference

Leaving aside Australian conferences, this was my fourth AsiaPac event. Two years ago, I co-chaired a conference for LexisNexis in Singapore. Shortly after that, Jeffrey Teh and others from LexisNexis set up InnoXcell to bring business events to the region. I did conferences with them last year in both Hong Kong and Singapore and was pleased to be asked back to Hong Kong for this week’s conference.

Here is a Twitter exchange between me and whoever tweets on behalf of @Exterro and @eDiscoveryGroup after the first day of the conference:

Me: Day 1 of eDiscovery conference in HK ends – a good day. Two sessions down and one on costs to go tomorrow

Exterro: How has that conference being going? Any ground-breaking stuff happening?

Me: That is not what to expect here – slow attrition is the target rather than breaking new ground

Exterro: Well then how is the slow attrition going? [He doesn’t give up, this one]

Me: Steadily and in the right direction

eDiscoveryGroup: “Steadily and in the right direction?” What direction are they headed?

Me: If I’d known I would provoke an inquisition from all corners I’d have kept my trap shut. My report will follow.

So here is that report. “Steadily and in the right direction”, as used in my tweet, has its plain English meaning – nothing dramatic has happened in Hong Kong in e-Discovery terms since I was last here, but there is interest from a wider range of companies and lawyers provoked by much the same pressures as arise elsewhere. As with everywhere else, we need to move on from “What is native format?” to “How can I best reach my client’s objective?”.

eDiscovery in Hong Kong

Hong Kong is a common law jurisdiction with its roots in English law and procedure, including the principles of discovery of documents. Several large UK and US law firms have offices here and much, perhaps most, of the business is international in nature, bringing not merely litigation but the incursions of regulatory and enforcement bodies, not least the US Department of Justice under the Foreign Corrupt Practices Act. That inevitably brings a requirement to preserve, collect and review electronic documents according to the standards of whatever jurisdiction requires them, tempered, in theory at least, by local laws. It fair to say that Hong Kong courts have been slower than others to adapt their procedures to take account of developments in eDiscovery, an assertion which requires two riders: the first is that I do not purport be an authority on Hong Kong court procedures and am merely repeating what I have been told by those in a position to know; the second is that no other jurisdiction has yet developed rules and procedures which adequately balance the time and expense of full discovery against the right of courts and parties to have all relevant information. Justice is a meaningless concept if the parties cannot afford to comply with their discovery/disclosure obligations.

My theme in opening the conference was that it is to some extent in the hands of the parties and their lawyers to take the lead in defining what they want from the courts. Most of the relevant jurisdictions (but perhaps Hong Kong less than others) include a discretionary element which parties can influence, if they are willing to do so cooperatively – you are unlikely to be forced to delve into sources which both parties agree to avoid, for example. There is less scope for this in an investigation, but even there parties can help themselves by being on top of their own data sources. If you know for yourself what you have got, then it becomes easier to negotiate with investigators, as well as with opponents in litigation. Much of the focus, therefore, is on being able to identify what you have got and to identify what is important, and to do so quickly and cheaply.

Comparative Jurisdictions: UK, Singapore and Australia

Chris Dale Yeong Zee Kin Eddie SheehyThe subject of my first session, however, was the steps being taken by courts to manage electronic discovery in different jurisdictions. I was joined by Senior Assistant Registrar Yeong Zee Kin of the Singapore Supreme Court and by Eddie Sheehy, CEO of Nuix. The UK has its new e-Disclosure Practice Direction and Electronic Documents Questionnaire; Singapore has e-Filing and Practice Direction 3/2009, which Yeong Zee Kin has done much to promote both in his role as a case management judge and on conference platforms; Australia has had Practice Note CM6 for some time and now has the comprehensive report from the Australian Law Reform Commission called Managing Discovery which is currently the best statement worldwide of what courts should be aiming for. Yeong Zee Kin SAR and Eddie Sheehy walked us through recent developments in their respective jurisdictions.

I explained why we look at what goes on outside our own silos. EDiscovery is thought of as a burden which the US has bequeathed to the rest of the world, and an unnecessarily expensive one at that. It seems important to me that we understand what the US drivers are and realise that there are US judges and others who share that concern and work to try and constrain eDiscovery within reasonable bounds.

Competition between jurisdictions

If one reason for looking at other jurisdictions is to learn from their mistakes and to benefit from their improvements, another is the threat of competition from courts which offer more efficient processes than our own. A recent UK Ministry of Justice paper drew attention to this competition without (as I said in my article on it) offering much to suggest that the UK intended any positive steps to keep our place as a jurisdiction and a forum of choice, beyond a shiny new court building and some government brochures. Hong Kong and Singapore were amongst the jurisdictions identified as a threat in that paper. How interesting, then, to have a Singapore judge on a jurisdictions panel in Hong Kong – I have no idea if a local judge was invited, but one of the lawyer delegates thought it unlikely that one could have been found or that he or she would have had much to tell us about electronic discovery in Hong Kong.

Certain themes recurred in every jurisdiction, I said: costs came top of everybody’s list, and everything else except justice itself was subsidiary to that. What was proportionate? How much data do we really need for a just conclusion? Judicial control and discretion is vital, but so is the clients’ own role both in managing their information and in choosing lawyers whose objectives are the same as theirs. Parties had the right to a consistent expectation, so that they could negotiate with each other with a reasonable idea of what the courts would order if they could not agree. No jurisdiction has achieved this or anything like it; it is an express component of the recent Australian recommendations.

Litigation and investigations compared

I had an opportunity on a later panel to talk about some of the differences between litigation and investigations, as well as the similarities. The panel was led by David Bowie, a Managing Director of FTI Technology in Australia, and the other panellists were Veeral Gosalia of FTI in the US and Richard Tollan of Mayer Brown JSM in Hong Kong.

FTI panel in Hong KongI opened with a high level overview. Both litigation and investigations require knowledge of facts, dates, custodians and issues. Document sources must be identified and preserved, and an analysis must be made quickly of the worst downside, the best outcome, the strengths and weaknesses, the timescales and the costs. Litigation, on the whole, has boundaries – you know what the issues are – whereas an investigation, perhaps triggered by a whistle-blower or an authority’s demand for information, had no such boundaries and the objective of the internal investigation is often to find out how big the problem is.

Richard Tollan expanded on the benefits of prompt identification of problems with examples from some well-known cases. The evidence that you are on top of a problem and have a plan to deal with it can carry weight with the authorities, and may mitigate the expense, as well as the potential fines. FTI’s Veeral Gosalia took us through some of the practical aspects of identifying, preserving and collecting documents and data. As well as the purely technical implications, he emphasised the ability to negotiate with the other side (whether opposing party or an authority) from an informed position, and he drew attention to the HR and other management considerations, emphasising that you need more from a technology consultant than pure technology expertise.

US developments

Browning Marean and Judge WaxseThe high-spot for many delegates was the dialogue between Browning Marean of DLA Piper US and US Magistrate Judge David Waxse. Of the very wide range of topics which they covered, the most significant was the duty of the parties to discuss cooperatively how to manage electronic discovery – not simply to pay lip-service to the formal obligation to meet and confer, but genuinely to work towards a solution which was in the best interests of the parties and the court. They referred scathingly to the “profound ignorance” of many lawyers about both the rules and the technology solutions. Judge Waxse has several ways of “encouraging” parties to maximise the value of a meet and confer, including compulsory reading of Judge Grimm’s Mancia opinion and videotaping the meet and confer itself – you bring him either an agreement or a video of your attempts to agree. He also insists where appropriate that the discussions include the people with the most knowledge about their respective systems – “dancing geek to geek” as another US judge had put it. We should not need a judge to tell us that this makes sense; be thankful that we have a few who do.

The involvement of somebody with technical knowledge has benefits which go beyond an understanding of your own systems. Judge Waxse gave an example: many lawyers offer and demand TIFF images in place of native files partly because that was what had always been done before and partly through a (usually misplaced) fear of exposing hidden metadata. The TIFF images may well double the size of the native files and therefore double the storage costs – a major component in the expense of eDiscovery. Furthermore, the benefits of modern analysis software were lost if the systems had only TIFF images to work from. If it is right, as Judge Waxse said, that most sanctions derive from breach of the rules, it is no less right that to say that large sums are wasted through a lack of knowledge about elementary things which are capable of agreement between parties with a modicum of technical knowledge.

Other sessions

Richard Kershaw of CatalystSpace does not allow me to describe every session. Richard Kershaw of Catalyst led an interesting panel on cross-border litigation as it affected those giving discovery in Hong Kong and Japan. Howard Sklar of Recommind came up with a couple of useful quotations relevant to advances in technology: sports equipment has improved immensely in the last 20 years, and Wimbledon Week was a good time to observe that “human review is like using wooden rackets”. The expression “Give me what I want, not what I ask for” was a good way of illustrating the limitations of using keywords, reminding the audience that modern search technology has moved on to keep pace with the volumes.

For his panel, Dmitri Hubbard of Epiq Systems cannily co-opted Loren Harper, Practice Support and eDiscovery Manager for Simmons & Simmons, who was in Hong Kong in support of her firm’s eDiscovery initiatives. That panel’s focus was on a different aspect of co-operation, that between in-house legal teams, external lawyers and providers of software and services. Mike Brown of Control Risks showed how being on top of a company’s electronic information fitted into the wider scheme of risk management and compliance, particularly for companies with international business in diverse jurisdictions and business environments.

It is all about costs

InnoXcell Conference RoomI closed the conference with a session on costs, joined by Browning Marean, Eddie Sheehy of Nuix and David Bowie of FTI Technology. Browning produced his well-known spreadsheet designed to allow costs estimates to be made at the outset and updated as matters progressed. Something similar, I said, was used in the Birmingham Litigation Costs Pilot, whose most active judicial proponent was HHJ Simon Brown QC. Eddie Sheehy passed on something which the same judge had said at a Sydney conference – most cases come down to a handful of documents and our efforts should go to finding that handful as early as possible in the process for the purpose of settlement discussions as well as for the court. The judgment of the UK’s Senior Master Whitaker in Goodale v Ministry of Justice tackled the problem by forcing parties to identify the custodians who really matter; start with them, he said, and widen the circle later if necessary by iterative analysis based on information shared between the parties in the structured way provided by the Electronic Documents Questionnaire.

Being prepared by being informed

I had invoked Judge Brown at an earlier session, drawing attention to this quotation from his judgment in Earles v Barclays Bank:

….potential litigants… need to anticipate having to give disclosure of specifically relevant electronic documentation and [should have] the means of doing so efficiently and effectively.

This, like so much else, is a matter of weighing risk against cost – looking at how much litigation and how many investigations you expect in a year, estimating their costs and deciding on a strategy to mitigate these. If you anticipate a high demand for e-discovery, then in-house ownership of software without a per-gigabyte processing cost may be the answer; an alternative approach is a relationship with a consultative provider who will work with you in anticipation of potential problems, in reacting to them when they arise, and in helping to manage the discovery process when required. The point of putting rival providers on the same panel, so far as I am concerned, is that it illustrates the breadth of the solutions which are available. No solution is objectively right for every company in every situation, and it is a vital element of risk management and cost containment to know what solutions are available.

As I said in opening this post, I am not much wiser about the progress, if any, made by the Hong Kong courts. We heard enough, however, to be clear that those who do business in this region, and those who advise them, cannot ignore the implications of ever-larger amounts of electronic information as they face external as well as local pressures. One can perhaps identify three levels at which these skills matter: at a purely defensive level, companies and their advisers need to anticipate litigation or investigations and, as Judge Brown put it in Earles, must have the means of giving disclosure/discovery efficiently and effectively; a less direct but equally serious commercial consideration is that potential trading partners, acquirers and joint-venture partners will steer clear of companies which cannot demonstrate compliance with FCPA and UK Bribery Act requirements; a third, and more positive, reason for developing the requisite skills and processes is that there is work to be won by those who have moved on from the “wooden rackets” mentioned by Howard Sklar.

Two stand-out stories

The conference had two stand-out stories for me, involving different aspects of knowing about your data sources. One concerned a massive exercise undertaken to collect data from multiple jurisdictions, each involving its own privacy and data protection considerations, ending with the discovery that all the data was backed up to a facility in the US anyway. What is worse, I wonder – commissioning millions of dollars of work without anyone realising that it was unnecessary or the fact that the backup routine breached multiple state laws whilst giving the company an enormous legal hold issue?

The other story came from Loren Harper. It is interesting in itself that firms like Simmons & Simmons are transferring e-Discovery knowledge between jurisdictions; what interested me more was learning that an associate in the Hong Kong office had made good use of the Electronic Documents Questionnaire, not because it was compulsory, but because he found it useful. That questionnaire, and the Practice Direction of which it forms part, is the UK’s current contribution to improving e-Discovery; Australia brings all the thinking in the ALRC paper; Singapore is a model for patient progress towards judicial management; the US sends us Judge Waxse with his practical suggestions and his emphasis on cooperation and competence.

We need to move on

My interrogation-by-Twitter described at the beginning of this post did not yield a clear-cut single suggestion as to the preferred direction of travel for Hong Kong’s courts, companies and lawyers. A conference like this, however, pools the thinking and the experience of judges, lawyers and service providers from around the world for the benefit of all of us. We all face the same issues and they are not going away. Someone described me as being “more aggressive” this year which, I hope, overstates it. It is not my place to be aggressive – we can leave that to judges, to regulators and to disaffected clients. We do need to be able to move on, however, from rules and cases and basic technology towards seeing eDiscovery as a component in risk management and as a tool to achieve clients’ objectives.

A good show – Singapore next

Jeffrey Teh of InnoXcellThe microphone was in my hands as the conference finished, and I spoke, I think, for all sponsors and delegates in congratulating Jeffrey Teh, Jennifer Qian and the rest of the InnoXcell team for putting the show together. This is a young company which has established itself very quickly as the leader in its field and in its region. Their next eDiscovery conference is in Singapore towards the end of September – the date is not yet fixed. I commend it to anyone from a corporation, a law firm or a provider with any interest in the subject.

My thanks to Geoffrey Lambert for the photographs which, for obvious reasons, I did not take myself


About Chris Dale

I have been an English solicitor since 1980. I run the e-Disclosure Information Project which collects and comments on information about electronic disclosure / eDiscovery and related subjects in the UK, the US, AsiaPac and elsewhere
This entry was posted in Catalyst, Discovery, eDisclosure, eDiscovery, Electronic disclosure, Epiq Systems, Forensic data collections, FTI Technology, Litigation, Nuix, Recommind. Bookmark the permalink.

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