A practitioner’s perspective of eDiscovery in a small matter

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A practitioner’s perspective of eDiscovery in a small matter

Guy Burgess

[email protected]

http://twitter.com/guy_burgess

LawTech NZ 18 March, 2015

mailto:[email protected]

http://twitter.com/guy_burgess

© 2015 Guy Burgess

Just an ordinary, average case…

► What is a “small” matter?

► Draft 2012 HCR – assumption of “non-standard” case:

“where the number of documents to be discovered by the parties is

reasonably anticipated to exceed 200”

► Discovery projects in LawFlow (Feb 2015):

► Average number of documents: 3,596

► Median number of documents: 725

► Up from under 500 two years ago

► Note these are reviewed documents,

not necessarily produced.

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Discovery will keep growing

► Data volumes continue increasing:

► 2014: 108 billion business emails per day

► Text messages, Facebook posts, Tweets

► Word docs, spreadsheets, PDFs

► Collaborative documents

► Video and audio files

► Databases

► Cloud documents

► More complex data sources

► No longer a simple filing cabinet…

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“Small matter” ≠ “easy discovery”

► Small plumbing business shareholder dispute:► Physical documents

► Office desktop computers & servers

► Home computer files

► Laptop files – current and old ones in the back of the cupboard

► Smartphones – txts, emails, voicemails

► Skype chats

► Email: internal server, ISP accounts, cloud accounts (Gmail, etc)

► Files: local files, server files, cloud files (e.g. OneDrive, Google Docs)

► Accounting & invoice records: Xero

► Online banking records

► Online calendars

► Facebook & Twitter pages: company & personal

► Backups & cloud backups

► Same rules apply to all discoveries, big and small (subject to Orders)

► Critical to consider discovery issues early on in order to assess

proportionality - arguably even more important in small matters

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© 2015 Guy Burgess

Proportionality of process

► “Proportionality” of discovery is the touchstone

► High Court Rule 8.2 – process must be proportionate

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8.2 Co-operation

(1) The parties must co-operate to ensure that the processes of discovery

and inspection are –

(a) proportionate to the subject matter of the proceeding; and

(b) facilitated by agreement on practical arrangements.

(2) The parties must, when appropriate, –

(a) consider options to reduce the scope and burden of discovery; and

(b) achieve reciprocity in the electronic format and processes of discovery and

inspection; and

(c) ensure technology is used efficiently and effectively; and

(d) employ a format compatible with the subsequent preparation of an

electronic bundle of documents for use at trial.

© 2015 Guy Burgess

Proportionality of search

► Search for documents also guided by proportionality

► High Court Rule 8.14:

► Note difference between search (r 8.14) and disclosure

(8.7-8.10)

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8.14 Extent of search

(1) A party must make a reasonable search for documents within the scope of the discovery order.

(2) What amounts to a reasonable search depends on the circumstances, including the following factors:

(a) the nature and complexity of the proceeding; and

(b) the number of documents involved; and

(c) the ease and cost of retrieving a document; and

(d) the significance of any document likely to be found; and

(e) the need for discovery to be proportionate to the subject matter of the proceeding.

© 2015 Guy Burgess

Two kinds of discovery order

► Standard discovery or tailored discovery

► Standard discovery is default

► “Adverse documents” test

► Generally considered narrower than Peruvian Guano, but in some

cases may not be much different

(E.g. Radio Tarana v 5TUNZ [2014] NZHC 1870)

► However: “Tailored discovery must be ordered when the

interests of justice require an order involving more or less

discovery than standard discovery would involve.” (r 8.8)

► Presumed to apply for $2.5m+ cases, fraud/dishonest cases, etc

► Or, can be sought: “interests of justice” gives broad discretion

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© 2015 Guy Burgess

Tailored discovery

► May be broader or narrower than standard discovery (r 8.8).

… [tailored discovery] can be extended to documents that “may” lead to a train of

enquiry in accordance with the approach set out in Peruvian Guano… More often,

however, the particular categories of tailored discovery will be narrower in scope

than what could have been the case under standard discovery.

Intercity Group (NZ) Ltd v Nakedbus NZ Ltd [2013] NZHC 1054 (10 May 2013) at [15], per Asher J

► Typically requires classification of documents into categories (Sch 9,

cl 3) e.g. by subject heading, date range, key individuals

► Benefits:

► Can define the scope of documents (e.g. by search keywords, restricting

to specified email inboxes, etc)

► Can make discovery proportionate

► Can make discovery clearer (discovering into specific categories)

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© 2015 Guy Burgess

Importance of early assessment

► Radio Tarana v 5TUNZ Communications [2014] NZHC 1870

► Standard discovery had been ordered by consent

► Plaintiff was unsatisfied with defendant’s discovery and sought variation imposing

tailored discovery on a Peruvian Guano basis.

► Judge refused, even though he accepted there were “grounds for suspicion” :► [62] There was nothing in the application, nor in the submissions made, to clarify what was sought by way of

“tailored discovery”. There was nothing to suggest that the parties had sought to co-operate in this regard as

required by r 8.2…

► [65] Notwithstanding this residual discretion, the “Peruvian Guano”-type discovery now belatedly sought by

Radio Tarana is at odds with the new rules, the purpose of which is to streamline discovery. Such orders will be

rare, but they may be appropriate in, for example, cases alleging fraud, where the court has reason to doubt

that standard discovery will suffice to flush out all relevant documents.

► [66] The approach taken by Radio Tarana is also at odds with the approach to discovery taken to date in this

case. As I have noted, the Court has ordered standard discovery at the request of the parties and by consent…

► [72] Further, in my judgment, at this late stage it would be unduly oppressive to require the defendants to now

attend to “Peruvian Guano” discovery. Radio Tarana, by consent, initially sought standard discovery. The

evidence establishes that the defendants have carried out an extensive search to comply with this order. They

have discovered some 4,900 documents, and provided three sworn affidavits that comply with the High Court

Rules as to form, and, on the face of it, as to content… Some limit must be put on the breadth of discovery, and

while there is no evidence before me quantifying the likely time or costs involved, I have no doubt that ordering

“Peruvian Guano”-type discovery now would involve the defendants in substantial additional cost. To belatedly

require Peruvian Guano discovery would, in my view, be oppressive and disproportionate to the matters in issue

in this proceeding.

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© 2015 Guy Burgess

Bringing it all together:First Case Management Conference

► Discovery order typically made at the first CMC (r 8.5).

► Do I want tailored discovery? If so why, and what categories? Can it be justified?

► Can I limit the extent of search?

► Anything else to be covered by the discovery order?

► Checklist in cl 1 of Schedule 9 should be starting point:

► Review the pleadings to identify likely documents

► Where, who, how many, what form - electronic vs physical, particular IT issues (e.g.

unusual file formats, complex databases, old equipment, etc)

► Estimated costs of discovery

► Whether estimated cost is proportionate to sums in issue

► Note duty to confer with other parties on discovery issues before

CMC (r 8.11(1)):The parties must, not less than 10 working days before the first case management conference,

discuss and endeavour to agree on an appropriate discovery order, and the manner in which

inspection will subsequently take place, having addressed the matters in the discovery

checklist in accordance with Part 1 of Schedule 9.

► Remember mutual duties to co-operate, reduce burden of discovery, and use

technology efficiently (r 8.2).LawTech NZ 2015

© 2015 Guy Burgess

Duty to confer: what can be agreed?

► How can we make discovery a bit easier?

► Tailored discovery categories (if applicable)

► Extent of search

► Keyword searches (use with caution)

► Date ranges

► Specific individuals

► Types of documents

► Party codes

► Common author & recipient names

► Individual vs company names for authors & recipients

► Document type codes

► De-duplication / threading issues

► Document numbering

► Redaction protocol – likely redactions, redaction log

► Exchange format – PDF or native

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Beware departing from the Rules too much

► Parties can agree to modify the Listing & Exchange

protocol (Sch 9 cl 4(1) & (2))

► Or… sometimes just don’t follow it

► But beware departing too much:

► Listing & Exchange protocol is very good baseline – very rare to

need to depart

► If another party joins the proceeding, they may not agree to the

non-standard process

► They are rules not guidelines: unless changes are agreed, other

parties have the right to insist on compliance

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© 2015 Guy Burgess

Document collection:Getting the documents from your client

► Two contrasting approaches:

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Client controlled Lawyer controlled

“You’ve got to do discovery. Here are the kinds of documents you’ve got to disclose. Please look through your files and provide them to us.”

“You’ve got to do discovery. Please give us your files and we will review them and determine

which ones are discoverable.”

► Less documents for lawyer to review

► Leverage client’s own knowledge of their documents

► May be more comfortable for client (though it depends on client)

► Puts high reliance on client’s assessment of what is “relevant”

► Might end up being more costly than a more ‘lawyer-controlled’ approach.

► More documents for lawyer to review

► Not practicable in all cases

► More robust process

► Can be easier if issues change / develop, supplementary discovery is required, etc

Optimal?

© 2015 Guy Burgess

Document collection:Electronic vs Paper documents

► Today, almost all “documents” originate electronically

► Word, Excel, PowerPoints, emails, etc

► Electronic versions are far preferable for discovery:

► Discovery is now electronic by default – no need to scan

► E-discovery systems can directly read common document types

► Automatically populate dates, authors, recipients, parent docs

► Full-text & date searching with high degree of accuracy

► Metadata is preserved (e.g. document properties, Excel formulas)

► Easier to detect duplicates

► Smaller file sizes, better quality

► Generally less costly

► Never print & scan back in! (unless there’s a really good reason)

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© 2015 Guy Burgess

Document collection:… but paper documents are inevitable

► Native electronic documents are ideal, but reality is most discoveries

still have lots of paper

► Electronic files often an incomplete record

► Printed documents may contain additional important information, e.g.

signatures, hand-written notes

► Scan each document separately to PDF

► Exception: consider scanning each “document group” (e.g. email plus an

attachment) as one PDF and then splitting later

► Take care when instructing an external print/scan shop

► OCR scanned documents

► Be aware of the limits of OCR

► Very dependent on quality and layout of the scanned image

► OCR is never 100% perfect

► Usually cannot detect handwriting and other annotations

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© 2015 Guy Burgess

E-Discovery software

► A tool to assist with the discovery process:

► Secure, central store for discovery documents

► Review documents for discoverability, privilege, etc

► Generate discovery lists (including supplementary bundles)

► Generate document bundles

► Make sure output is compliant with High Court Rules

► Other useful features

► Search functions

► Tag & link documents to issues

► Redact documents

► Common bundles

► Remote access

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© 2015 Guy Burgess

Should I use an E-Discovery system?

► It is not compulsory to use e-discovery software

► Duty to “ensure technology is used efficiently and effectively” (r 8.2(2))

► But for some cases, it may be efficient to use the office scanner and

manually type a list and prepare a bundle of PDFs.

► However, keep in mind that a “simple” discovery may become more

complicated than expected

► More documents than originally expected; pleadings amended; other

parties joined; new documents come to light; further & better discovery

► The other side may surprise with large volume of documents

► E-discovery software can help manage multiple rounds of discovery

► Benefits beyond discovery:

► Search tools, issues analysis, common bundles, remote access,

document stamping, etc.

► Difficult to shift an existing discovery into a system halfway through

► Decision should be made at outset

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© 2015 Guy Burgess

Some practical tips

► Redactions

► Document types

► Email chains

► Document IDs

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© 2015 Guy Burgess

Redactions

► The Rules expressly permit redactions

► Defined as “the process of rendering part of a document

unreadable… Redaction is typically used to render confidential or

privileged portions of an otherwise discoverable document

unreadable” (Sch 9 glossary)

► “The redacted sections of a document must be blacked out on the

image. Parties may agree that a label or note must be provided

explaining the grounds for the redaction.” (Sch 9 cl 10(1))

► Efficient but sometimes overlooked way to address:

► Documents with mixed privileged and non-privileged material

► Documents with relevant and irrelevant material (including

irrelevant confidential material)

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Redactions for privilege

► Wholly-privileged (relevant) documents do not need to be produced

► List on the Part 2 (Privileged) list

► Partially-privileged (relevant) documents must be produced:

► “If a document contains both privileged and non-privileged information, a

party must make the document available for inspection, but may redact

the privileged information by rendering the privileged information in

the document unreadable” (r 8.28(2))

► In other words, you cannot withhold an otherwise relevant document just

because privilege is claimed over part of it

► Therefore, you should prepare a redacted version

► Sometimes designated “Discoverable With Redactions” or DWR

► Document should be listed in both Part 1 (Open documents) in respect

of the DWR version, and in Part 2 (Privileged documents) in respect of

the original version

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© 2015 Guy Burgess

Redactions for irrelevance

► Often, not all information in a discoverable document is

“relevant”

► The document must still be produced, but the party may

redact out the irrelevant information if desired (as long as

this does not affect the sense of the document or make it

misleading)

► E.g. documents may contain sensitive financial or personal

information. If this is not relevant to any matter in the proceeding, it

could be redacted

► Can be an easier, cleaner solution than claiming

confidentiality and imposing restrictions (r 8.16(1)(c) & 8.28(3))

► But should be used judiciously

► Ideal if pre-advised in Case Management Conference

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© 2015 Guy Burgess

Redactions for irrelevance (cont.)

► Practice has been accepted under 2012 rules:

Minister of Education v IT Architects Ltd [2014] NZHC 1541 (3 July 2014):

[30] The approach to redactions for irrelevance is set out in the judgment of

Hoffmann LJ in G E Capital Corporate Finance Ltd v Bankers Trust Co [1995]

2 All ER 993 (CA) at 994-995… Hoffmann LJ said:

“It has long been the practice that a party is entitled to seal up or cover up parts of

a document which he claims to be irrelevant. Bray's Digest of the Law of Discovery

(2nd ed 1910) pp 55-56 puts the matter succinctly:

‘Generally speaking, any part of a document may be sealed up or otherwise

concealed under the same conditions as a whole document may be withheld

from production … The practice is either to schedule to the affidavit of

documents those parts only which are relevant, or to schedule the whole

document and seal up those parts which are sworn to be irrelevant. …’”

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© 2015 Guy Burgess

Redaction tips

► Generally need to be made on PDF version

► Redactions should explicit and obvious

► Documents should not be redacted, or otherwise modified, in non-visible or subtle

ways, as this risks being misleading, and may even lead to an allegation of

impropriety

► Rules state “must be blacked out on the image” (Sch 9 cl 10(1))

► It can be appropriate to provide a “redaction log” to the other party

► “Parties may agree that a label or note must be provided explaining the grounds for

the redaction.” (Sch 9 cl 10(1))

► Ensure the redaction is “safe”!

► An unsafe redaction simply overlays a black box or other image on the PDF but

does not remove the underlying text

► This is unsafe because the overlaying image can effectively be “peeled off”

revealing the redacted information

► Many public instances of “redaction fails”

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© 2015 Guy Burgess

Document types

► “Document type” is one of the required list columns

► Generally, this need only be a brief description:

► “The type of document being listed, for example, email, letter”

(Sch 9 cl 7(1))

► Some lawyers have a practice of verbose descriptions,

e.g. “Letter from X to Y on 7 July 2010 regarding delays

on the Alpha project”, but this is typically unnecessary

► Note Sch 9 cl 7(1): “Parties may agree to construct a

predefined list for all document types”

► Reinforces view that brief, standardised descriptions should

usually be appropriate.

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© 2015 Guy Burgess

Email chains (threads)

► Complications can arise over email chains and “embedded replies”

► An email with one or more replies

► Sch 9 cl 8(2): “all individually discoverable emails must be listed separately”

► But does this mean each reply contained within a chain has to be separately listed?

► Pre 2012-Rules required each reply in a chain to be listed separately

► Todd v Shell (2008) 18 PRNZ 1026 at [29]:

► “I accept that each email constitutes a document for listing purposes. That characterisation

does have unfortunate consequences in creating work”:

► This is still be the case under 2012 Rules

► See NZX v Ralec Commodities [2014] NZHC 376

► However, in that case it was said that replies should not have been included “without testing

each of them for their stand-alone relevance”: Ralec at [29]

► Generally, each discoverable document should be listed separately even if “embedded”

within another – but this can create extra work.

► A good idea to reach agreement in advance with other parties. Ralec is an example

where the parties took different approaches, resulting in an interlocutory dispute

► Easiest approach: agree that parties may list one or more emails per thread, as

convenient

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© 2015 Guy Burgess

Document IDs

► A unique number for each document (Sch 9 cl 7(1))

► Should be sequential and in logical order, e.g. chronologically (Sch 9 cl

7(2))

► Should use agreed party codes, e.g. XYZ.0001, ABC.0001 (Sch 9 cl 7(1))

► Supplementary lists must run sequentially from last number used in

previous list (Sch 9 cl 7(5))

► My tip: Keep It Simple

► Avoid complex numbering regimes to order / group documents

unnecessarily

► Can cause headaches with supplementary lists, documents that fit into

multiple categories, etc

► Documents get renumbered for Common Bundle anyway

► If grouping is required, E-Discovery systems usually provide better ways

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© 2015 Guy Burgess

List requirements

► Documents must be listed in a “single, continuous table

or spreadsheet” – sch 9 cl 6(1)(b)

► Beware systems that produce multiple table

► Table must have the following fields (sch 9 cl 6 & 7):

► Document ID

► Date

► Document type

► Author

► Recipient

► Parent document ID

► Privilege category

► Typically an Excel spreadsheet or Word table with those columns,

which is scheduled to Affidavit of Documents

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© 2015 Guy Burgess

Exchange requirements

► AKA Inspection or Production

► Generally at the same time as list is produced

► May be exchanged via USB stick, DVD, portable hard drive, etc.

► Documents must be provided electronically:

Sch 9 cl 6(1)(b): “Parties are required to … exchange documents electronically by way

of … multi-page images in PDF format (or another format if agreed)”

► Permits native exchange, but parties often exchange PDFs in first instance

► Documents must be multi-page – not one-document-per-page

► PDFs can be stamped with their Document ID

► Native file format may be used for certain files

► Excel documents (XLS, XLSX) often produced natively

► Other file types not readily converted to PDF

► The file name for each individual document must be “Document

ID.pdf” (Sch 9 cl 11(3))

► Include an electronic version of the list with the actual documents.

► Excel / Word / HTML / CSV

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© 2015 Guy Burgess

Conclusion

► Discovery can still be one of the most expensive parts of

litigation

► The Rules provide substantive ways to manage discovery

► Proportionality is the touchstone

► This is being enforced by the Courts (e.g. Radio Tarana)

► Particularly important for small matters where discovery

can quickly become disproportionate

► Onus is very much on lawyers:

► Consider discovery issues as early as possible

(certainly before the first Conference)

► Take advantage of the Rules – can we make discovery easier?

► Take advantage of technology

LawTech NZ 2015

A practitioner’s perspective of eDiscovery in a small matter

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