The KPMG Preservation Order: it couldn’t happen here….I hope

In writing about the US case Pippins v KPMG (see KPMG Judge Kicks the Sisyphean Stone of Proportionality Back Down the Hill) I made a point of emphasising that “one must… be careful up to a point in commenting adversely on rules of another jurisdiction”. I also made it clear that my comments were not directed at the judge but at the rules as they have developed.

Mine was therefore a policy view rather than a taking of sides, a conclusion that if the Magistrate Judge was correct (as to which I have no informed view) then my outsider’s opinion of the legal context was that, as Dickens’ Mr Bumble put it, the law is an ass. My support for the position taken by the amici who have joined in the appeal was based more on sympathy with their broad propositions than with the facts of the case. I want them to to be right and to win because I entirely buy the idea that decisions like this will cause lawyers “in an over-abundance of caution [to] feel obligated to follow the broader standard preservation adopted by any court” as one of the briefs puts it.

As one might expect, the case has aroused strong views, none clearer than those expressed by Craig Ball in a forthright article called A Good Decision Brings Out the Bullies – a title which tells you which side Craig takes. His analysis takes the key facts, a less-than-complimentary examination of KPMG’s actions, the reasons in forensics and evidence terms why the hard drives which were the subject of the application ought to be preserved, and a sprinkling of references to the rules.

The briefest recital of the facts, for those who are starting here, is that a claim has been brought against KPMG by current and former associates who say they were deprived of overtime payments. KPMG chose to collect 2,500 hard drives used by potential claimants. This, they now say, is costing them significant sums and puts them at risk that the data thus preserved will become subject to legal holds in other cases.

This paragraph gives you the flavour of  Craig Ball’s view:

So, on one side, you’ve got plaintiffs—KPMG employees and former employees—who’d actually used the computers, knew something of their contents and asserted there would be relevant data on the drives (i.e., “usage information, log-in/log-out information, application records, forms, and other contents stored on the laptops in the course of the business day, which would be helpful in showing both the range of hours during which they worked and the substance of their work,” (slip opinion at p. 4, quoting the plaintiffs).  On the other side is a defendant who held the drives at great expense ($1.5 million and mounting), but hasn’t looked at a single one of them and won’t let the plaintiffs look.

The judge’s conclusion, he adds, is that “KPMG’s ongoing burden is self-inflicted to a large extent”

The other sentence which caught my eye was this one:

[KPMG] unwisely employed the old eDiscovery playbook: Trotting out fabulous cost projections on flawed assumptions expecting to persuade the judge to rule by the seat of his pants instead of based on competent evidence.

My interest in this case goes wider than the purely US implications. The present debate in the US about preservation – the trigger, the scope and the duration – makes it relevant to consider what happens in other jurisdictions, none of which burden litigants with the preservation problem which appears as a self-inflicted wound in the US. I have made other references to this recently, prompting comment from Howard Sklar of Recommind (covered in this article) and Philip Favro of Symantec, whose comments appear at the foot of my Sisyphus article.

My interest is not simply that of the ghoul who slows down to look at a car crash on the other carriageway. One of the objections to eDiscovery / eDisclosure which we meet in the UK and elsewhere is that it is seen as something to be avoided because of its disproportionate cost, with the US experience given as evidence, often without much understanding of it. It is used as a kind of awful warning – if you go down to the eDiscovery woods, something terrible will happen to you. It seems important, in combatting this, to draw attention to the peculiarities of US discovery, whilst recognising that they think we are pretty odd too, with our apparently laid-back attitude to things which concern them dreadfully.

It is important also because the UK will, sooner or later, develop more stringent obligations in relation to preservation and legal hold, and there is a risk that once this horse gets out of the stable it will gallop full tilt towards the US model.

This warrants a longer article to which I will return in due course. I will settle today for emphasising one of Craig Ball’s sentences already quoted above. Whatever side you are on in a dispute about the proportionality or otherwise of a particular step in eDisclosure/eDiscovery, you need some hard facts about what will be gained or lost by taking or not taking any particular action. A UK court has an express duty to consider “whether the likely benefits of taking a particular step justify the cost of taking it” [Rule 1.4(2)(h)] and it cannot do that when parties turn up with “fabulous cost projections on flawed assumptions expecting to persuade the judge to rule by the seat of his pants instead of based on competent evidence”. That much is true in any jurisdiction.


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 Discovery, eDisclosure, eDiscovery, Electronic disclosure, Forensic data collections, Recommind, Symantec. Bookmark the permalink.

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