Justice requires full disclosure of all potentially relevant electronic documents. Lawyers will always take the lead in managing electronic disclosure / eDiscovery. It is impossible to budget for the costs of litigation. Judges making disclosure orders just tick default boxes and leave the parties to get on with it.
Most people with any knowledge of litigation in the UK would nod agreement at all the statements given above. They are part of the fabric of disclosure / discovery, some of the comfortable assumptions which lawyers bring to the litigation process. All were challenged at the Information Governance and eDiscovery for Financial Services conference held at Canary Wharf a few days ago.
Assumptions, of course, derive from all sorts of things – from the way things have always been or because of prejudices based on past experience or even a legend. I had certain assumptions, for example, about the hotel to which I was allocated – a Holiday Inn across the river in Sarf London. I pictured a cheap modern block full of truckers and back-packers, sitting in a wasteland of industrial estates, elevated dual carriageways, roundabouts and car parks, inhabited by gangs whose social interaction is conducted with sawn-off shotguns and knives. The last part of this impression, the prejudices of one who watched The Long Good Friday at an impressionable age, proved to be wrong – that part of London is too desolate even for the gangsters. The rest of it was only too accurate. They need to level the whole area and start again.
That second week in September saw the anniversary of the last time that part of London was razed to the ground – the photograph below shows a Heinkel III at 6.48pm on 7 September 1940, the first day of the Blitz.
The part of the London Docks where modern Canary Wharf now stands lies just off its starboard wing. By the end that night, parts of London which had stood unchanged in essentials for many years were in unrecognisable ruins – and that was the first of many such nights. The docks survived and thrived, reaching their peak traffic in the mid-1960s before containerisation killed them again; later they found a new role as the financial centre which stands there today.
Those of you who have stuck with me over the years will recognise the method here – open with a subject which has only the most tenuous link with electronic discovery and then show it to have closer parallels than one might think. Some of the subjects which came up at the conference potentially bear the same relationship to eDiscovery as that Heinkel bore to London in 1940 – a harbinger of the end of the settled order of things. Like Canary Wharf, however, eDiscovery will reinvent itself.
I don’t imagine that the speakers at the conference pictured themselves as horsemen of the apocalypse. Let me explain why they seemed so to me by reference to the horses which they rode at the conference.
Practice Note SC EQ 11 of the Equity Court of New South Wales
I have mentioned more than once this Practice Note, which was published in March 2012 and which severely curtails disclosure in the often heavyweight proceedings brought before the Equity Court. It seems to me of such potential significance that we had Justice Robert McDougall of the Supreme Court of New South Wales, one of those responsible for drafting and implementing the Practice Note, to come and tell us about it. Senior Master Whitaker represented England and Wales. I was the moderator.
The guts of the practice note say this:
4. The Court will not make an order for disclosure of documents (disclosure) until the parties to the proceedings have served their evidence, unless there are exceptional circumstances necessitating disclosure.
5. There will be no order for disclosure in any proceedings in the Equity Division unless it is necessary for the resolution of the real issues in dispute in the proceedings.
6. Any application for an order for disclosure, consensual or otherwise, must be supported by an affidavit setting out;
– the reason why disclosure is necessary for the resolution of the real issues in dispute in the proceedings;
– the classes of documents in respect of which disclosure is sought; and
– the likely cost of such disclosure.
So, “exceptional circumstances” are needed to justify disclosure before the evidence – pleadings, witness statements, reports etc – is exchanged. There will be no disclosure thereafter unless it is “necessary for the resolution of the real issues” and applications supported by evidence must be made to explain the need for disclosure even where the parties agree.
I am not going to summarise what Justice McDougall said at the conference, partly because I interviewed him afterwards and will point you to the video shortly, but mainly because my focus here is on top-line messages rather than detail. The key message here is that a senior court handling large cases has set its face against any discovery which is not “necessary for the resolution of the real issues in dispute”. The exchange of evidence will show what the real issues are and will make it relatively straightforward, so the theory goes, to identify what further documents, if any, are required. The court works outwards from the minimum requirement, not inwards from the maximum possible collection.
Master Whitaker was just the man to complement this message. He often draws attention to the fact that many jurisdictions have never required discovery as it is understood in the US, the UK and elsewhere. Can we say, for example, that justice in Germany is lesser justice than ours because it does not require parties to trawl through all their documents, challenging each other’s discovery at vast expense with the verbal equivalent of sawn-off shotguns and knives? In saying this, Master Whitaker is not himself denying the value of the principles of common law discovery; his message is that if we – the judges and lawyers – do not find a better way to manage discovery then it will become hard to resist calls for a different model.
His own approach to the management of electronic documents is set out clearly in his judgment in Goodale v The Ministry of Justice, the only real example we have of a judge asserting the authority given to him by the rules to manage the costs of discovery pre-emptively and proactively.
In addition to this message, Master Whitaker took us through recent and forthcoming changes to discovery. These include:
The exchange of information required by the eDisclosure Practice Direction 31B and formalised in its Electronic Documents Questionnaire.
Lord Justice Jackson’s “menu option” which will remove the present default option of standard disclosure and replace it with a set of choices which will make the judges focus on what is really necessary – necessarily requiring the parties to provide the information needed to inform such a decision.
Costs management which will make parties prepare a budget early in the litigation, identifying what is to be spent on discovery amongst other things and, where relevant, identifying different ways of dealing with the cost and time problems.
I ended the session by making it clear that the effective abolition of discovery was not amongst my ambitions – I am, I said, merely the messenger of changes such as those now in force in New South Wales. So far as I am concerned, contemporaneous documents are often the only way of proving or disproving what a witness says (see HHJ Simon Brown’s QC’s judgment in Earles v Barclays Bank for an analysis of this), and the lawyers will want to go through those documents anyway, whatever the rules require. They will want, too, the opportunity to challenge their opponents’ discovery – what is needed is a mechanism for controlling those who see a happy coincidence in a perceived duty of “zealous advocacy” and the profitability which comes from taking every point.
Barclays Bank – taking discovery in house
Rule changes are not the only challenge to the pleasantly profitable task which lawyers have made of electronic discovery. Whatever steps the courts and rule-makers may take, a more immediate remedy lies at the hands of clients who are beginning to see that lawyers are adding great cost to the process, often for relatively little value. One does not need to accuse lawyers of expanding the task to suit their profit figures – incompetence and inefficiency will suffice as reasons for considering alternative approaches.
Emma Quinn of Barclays Bank, in a session led by Graham Ashworth of Symantec, took us through the steps which Barclays has taken to control the costs of electronic discovery. Barclays looked at the costs which they had incurred in this aspect of litigation (that itself makes them different from most companies who do not even know what their spend was last year). That set the target – assuming reasonable consistency in the number and scale of contentious matters, any reductions from the spend of prior years represented money saved to the business. It also represented money lost to lawyers and, once the cost of software licences had been paid for, to eDiscovery providers. Emma said that it took Barclays six months to cover the costs of its Clearwell licenses and 18 months to get back the costs of setting up the infrastructure needed to bringing as much eDiscovery in-house as possible.
Again, I do not intend, for now at least, to add detail to this. Barclays makes no secret of what they have achieved, and it cannot be long before other companies investigate this route for themselves. You do not need to do it on the scale of the Barclays venture – a few key internal appointments, a couple of master service agreements with technology providers and a good relationship with providers of managed review services will reduce overall costs and divert significant chunks of work away from the lawyers.
Dominic Regan on the Jackson reforms
As I have mentioned above, Master Whitaker touched on the main changes to eDiscovery due to take effect in April 2013. Professor Dominic Regan amplified on these points and touched on others in a session which I moderated – not that Dominic needs much in the way of moderation when it comes to talking of the potential impact of the Jackson reforms.
Once again, I stick to what I see as the central points out of many good themes which Dominic covered. The existing judicial duty to manage cases actively has been emphasised, both by Sir Rupert Jackson’s criticism of case managing judges in his report and by the focus on informed decision-making which permeates the part of the reforms which follow from the report. The obligation placed on the parties to agree a budget and to say how they intend to manage disclosure should give the court all the information it needs to make a proportionate decision. The “menu option” liberates them (not that they were ever actually constrained) to make a case management order fine-tuned to all the circumstances of the case. If this is not enough to encourage lawyers to prepare properly for case management conferences, the new rules include a provision designed to encourage compliance with court orders.
Dominic’s view is that litigation lawyers are only now beginning to focus on the practical effect of the rule changes. A new set of skills and attributes will be required – of budgeting, transparency, cooperation and project management. None of this is new, in the sense that lawyers have been bombarded for years with advice and warnings about the need to acquire new skills of this kind – we all receive far too much well-meaning advice, much of it soft-edged and sounding too obvious to need recital. It may not seem like that, however, when a judge starts questioning you about your budget or when the client invites you to share his risk by litigating on a contingency basis – another of the innovations which Dominic told us about, and one which you can do only if you can predict and control costs.
And the walls came tumbling down
The conference sessions described here covered three separate challenges to the present way of litigating. The rule changes, and specifically the budget obligation, will come in April 2013. It will not take much longer, I think, for significant numbers of clients to question whether their commercial objectives are served by the manner in which their present lawyers approach disclosure obligations on their behalf. The rule changes emphasise the potential for tailoring disclosure to the needs of the case and that will leave nowhere to hide for the kind of lawyer who likes to “proceed with the procedures” at whatever cost; clients will either change their lawyers (perhaps giving part of the job to non-lawyers) or, as Barclays have done, take more of the task in-house.
The New South Wales idea, that we can largely dispense with disclosure, is a little further off as a threat – I call it a “threat” because so many law firms depend on the billing from very broad disclosure exercises to remain profitable. Its effect will be to challenge the idea that we need to start from the maximum scope and work inwards when common sense says that we should work outwards from the minimum required to prove or challenge a case.
When dawn broke on 8 September 1940, parts of London which had stood unchanged for years had gone. Worse was to come, both in the ensuing days and weeks and further off when the V1 Doodlebugs came (I saw my first one of those at the Washington Air and Space Museum last week). Only the rubble-filled outlines of streets and buildings remained. In time, as I have said, a prosperous new city replaced the ruined one, its fortune made by trading financial instruments rather than commodities.
The practice of civil litigation faces something similar. The bombs and Doodlebugs come in the form of new rules, rival business models, and pressure from clients, leaving only the outlines of the old way of doing things. The survivors will be those who adapt, adding the new skills of budgeting, project management, risk assessment and the use of technology to their legal skills. The profession we have now looks like the London docks did just before those Heinkels turned up; the new profession which results could look like Canary Wharf does now.