“E-disclosure is about being clever with the way you do document reviews. It’s about picking the right search terms, using a good provider and having a proper hosting platform.”
This sensible quotation, from RPC disputes head Geraldine Elliott, appears in an interesting article in The Lawyer of 28 July headed Special report: eDisclosure – trials and tribulations.
To my eye, the article includes some implied comparisons which paint a misleading picture: the overall cost of using one technology must be compared with the overall cost of using another or of using none, including the cost of time spent or saved; return on investment must include savings and strategic and tactical benefits, not merely expense over the life of a case; a few extreme examples of egregious disclosure failures do not justify disproportionately expensive disclosure exercises in all cases – that was the American way, and we want none of it here.
With one exception – confusing the word “sanctions” (as in “punishment for default”) with the consequences of that default, namely the entry of a default judgment for the sum claimed, I do not really disagree with the components of the article. Strung together, however, the overall impression is perhaps not quite as its separate contributors intended. As it stands, it reinforces the perception that eDisclosure is simply threatening, technical and expensive. It may be all those things, but lawyers who just conclude that new technology is too expensive without looking at it, who omit half the equation when comparing costs, and who read only the cases in which people screwed up, are unlikely to develop a rounded view.
The article includes interviews with people who are engaged in eDisclosure exercises, and includes discussions about the rule changes and case management strictness, and the different ways in which firms are managing electronic disclosure, as well as some references to cases which have not gone well for at least one of the parties. I focus here on a couple of areas which I would have expressed slightly differently.
Technology-Assisted Review and return on investment
Barrister Damian Murphy of Indicium Chambers suggests that technology-assisted review is not being used as widely as one might expect given its power to cut through disclosure volumes. He is quoted as saying of technology assisted review that “if it was free I imagine everyone would say ‘you’d be mad not to use it'” and that “people don’t think they’ll get a return on investment”.
That may be what they think (and Damian is merely a reporter here of what he hears when he talks to lawyers), but I suspect that many of them are doing the wrong calculation. If you look simply at the licensing costs of litigation software then that is, of course, not “free”. Assuming, however, that you are involved in a case which anyway requires the use of technology, then the proper calculation is the marginal cost of using technology assisted review; since the analytical tools increasingly come bundled with the other and more conventional components of the litigation software package, the TAR licence cost is zero. Those who have dismissed technology-assisted review on this ground may care to get in touch with some software providers and check their price lists; have a demo while you are at it – these tools evolve rapidly, and much of the developers’ focus this year has been on usability.
Damian Murphy is rightly careful to attribute what he says about “return on investment” to the lawyers he comes across rather than assert it himself. The lawyers may say that they can only judge ROI over the full life of the case, and they spurn such calculations because of the assumption that the case will settle well before they see a return. This ignores the strategic and tactical benefits of being on top of the documents promptly as is required by the rules as well as by professional duty. It also overlooks the value inherent in prioritisation which can safely relegate (not necessarily eliminate) large volumes of data, reducing the time and cost of review; review is the most expensive part of the process and one which seriously affects budgets and early decision-making.
There is a price to be paid, because the best value comes from TAR if senior lawyers give the initial input. Since the whole theme of the article is the risks inherent in a botched disclosure exercise, the involvement of senior people will often be justified. Even if you have a cavalier attitude to risk, the opportunity a) to reduce costs and b) to be equipped to participate properly in the case management decision-making seems worth investing in.
The headline disaster cases make poor models
There is one sentence in the article which is potentially confusing. The sentence is this one:
Most recently, Stephenson Harwood clients Toba Trading and Hossein Rahbarian were refused relief from £9.6m in sanctions due to “inadequate” disclosure.
That implies that the parties were punished by being made to pay a very large sum as punishment for “inadequate” disclosure. The sum in question, however, was the amount claimed against them in the proceedings, not a penalty and punishment. Judgment was entered against the defendants in default because of (amongst other things) failure to comply with their disclosure obligations (and, as it happens, has since been set aside on terms which include a payment into court and reimbursement of costs). The entry of a default judgment is serious enough, but it is not quite the same as an enormous fine for procedural failures in the American way (it is not in fact the American way, but they have talked themselves into fearing sanctions at every turn; my mission is to make sure that we don’t invent the same bogeyman here, which is why I bother to correct the impression given in the article).
This distinction between sanctions in the form of a fine (which is what the article implies), and a default judgment as a consequence of failing to comply with deadlines, matters. The real problem with the article is that it implies a linkage between failure to find a few documents, on the one hand, and the consequences of grossly inadequate disclosure, on the other. Damian Murphy is quoted as saying this:
Lawyers are loath to be faced with the prospect of a judge asking them ‘so where’s this document?’ at trial.
That perfectly sensible comment has been unconsciously linked in the article to some extreme examples of compliance failure. A disclosure exercise which “spiralled out of control”, and defendants who had “committed and persisted in deliberate non-disclosure of important documents” are very far removed from a case in which omissions resulted from incorrect decision-making, from the faulty use of technology, or from proper (but perhaps misguided) attention to the rules and cases which require every attempt to minimise unnecessary disclosure. You don’t get “sanctioned” for millions for that.
Proportionality, looking under stones and smoking guns
It is, as the article says, “time to take eDisclosure seriously or face the consequences in court”, but we must not let a few examples of severe punishment for egregious conduct drive out a balanced and proportionate attempt to give disclosure. The fear to which Damian Murphy rightly refers must be balanced against this quotation from Mr Justice Morgan in Digicel v Cable & Wireless:
it must be remembered that what is generally required by an order for standard disclosure is “a reasonable search” for relevant documents. Thus, the rules do not require that no stone should be left unturned. This may mean that a relevant document, even “a smoking gun” is not found. This attitude is justified by considerations of proportionality. This point is well made by Jacob LJ in Nichia Corporation v Argos Limited  EWCA Civ 741 at  to .
Technology-assisted review might have been designed for just this context.
Being clever about document review
I opened with a quotation from RPC disputes head Geraldine Elliott:
E-disclosure is about being clever with the way you do document reviews. It’s about picking the right search terms, using a good provider and having a proper hosting platform.
I would add one or two things to that: RTFR (Read the Flipping Rules); go and see some predictive coding tools and ask for the price list; make sure that your RoI calculations take account of everything, not just the bare cost of getting data into a system. None of this makes disclosure easy, but let’s not surrender to half-understood technology, half-baked statistics and a concatenation of worst-case scenarios.