Date 1 December 2010
The last 10 years have seen a revolution in the way that people communicate. Increasingly, documents are created, transmitted and stored electronically. This proliferation of electronic material creates three main challenges for litigants and their legal advisers:
1. The Civil Procedure Rules (“CPR”) require parties to disclose to each other all documents which are relevant to the dispute. A document is very widely defined as being “anything in which information of any description is recorded”. This includes emails, voicemails, text messages, posts on social networking sites and metadata (namely information stored in a document about when it was created and edited and by whom). A document is relevant if a party intends to rely upon it or if it supports or adversely affects any party’s case. In even a small organisation, there will therefore be a huge volume of potentially relevant documents - a very daunting prospect.
2. The CPR oblige litigants to undertake a reasonable search for what are often described as “adverse” documents. This does not mean that no stone should be left unturned. What is reasonable depends upon the nature and complexity of the case as well as the amount of money at stake – the CPR’s overriding objective is to deal with cases justly, which involves adopting a proportionate approach and saving costs Electronic documents may only be accessible at significant cost and parties may not even know exactly how much electronic data they actually have and where and how it is stored.
3. Once a reasonable search has been carried out and relevant documents have been identified, those documents need to be made available for inspection by the other side. How can this best be achieved when documents are stored electronically, whether on devices such as laptops, smartphones or blackberries or on servers, back up systems or databases?
The headache for litigants is twofold - can you be confident that you yourself have complied with your obligations to carry out a reasonable search and disclose all relevant documents and how sure can you be that your opponent has also done so?
On 1 October 2010, a new Practice Direction 31B (“PD31B”) was added to the CPR. PD31B applies to all cases commenced on or after 1 October 2010 and which are or are likely to be allocated to the multi-track (essentially cases of £25,000 or more). Its purpose is to “encourage and assist the parties to reach agreement in relation to electronic documents in a proportionate and cost-effective manner”.
Central to PD31B is the need for parties and their legal advisers to be open and co-operative with each other about electronic disclosure at an early stage. The key points are:
• As soon as litigation is contemplated, the parties’ legal advisers must notify their clients of the need to preserve potentially discloseable documents;
• There must be discussions between the parties in advance of the first case management conference (“CMC”) with a view to reaching agreement on the use of technology and the disclosure of electronic documents.
• As a result of these discussions, the parties should submit to the court a summary of the matters on which they agree and disagree in relation to electronic disclosure so that the court can give directions or order a separate hearing to decide the unresolved issues.
• The parties are encouraged to exchange the Electronic Documents Questionnaire attached to PD31B and verify such a document with a statement of truth.
• If a party gives electronic disclosure without first discussing the approach to be adopted with its opponent, the court can order such a party to repeat its search or take additional steps – this is likely to be at its own expense.
• PD31B contains detailed guidance on the factors that may be relevant in determining the extent and reasonableness of a search for electronic documents. Simply using keyword searches or other automated searches will rarely be sufficient. However, a party will need to justify the request for electronic disclosure of documents which are not readily accessible.
• There should be a consistent approach to listing documents in a party’s disclosure statement
• There should be co-operation at the outset as to the format in which documents are to be made available to each other on inspection, This should ordinarily be in the document’s native format i.e. the form in which it was originally created.
To a certain extent, PD31B standardises what was already good practice. Addressing up front with your opponent where to look for documents, how to search through the various sources of potentially relevant material for relevant documents and how to make such items available for inspection should save time and costs in the long run. Typically preparing one’s own disclosure and then reviewing and challenging the other side’s disclosure are often the most time consuming and expensive parts of the litigation process
From a practical point of view:
• Revisit your document retention policy if you have one. PD31B emphasises that the obligation to preserve documents as soon as a dispute is contemplated includes preserving electronic documents which would otherwise be routinely destroyed as part of a company’s document retention policy. You will not get any sympathy from a judge if relevant documents are destroyed and indeed, an adverse inference from such destruction may be drawn.
• If you don’t have a document retention policy, give serious thought to developing one. Not only do they help minimise the risks described above they can also deliver savings in terms of electronic storage costs and make accessing business article data much simpler and cheaper.
• Involve your IT specialists at the outset. They will the best people to advise on how documents are stored, in what manner and where, how such documents can be accessed and searched and give you an idea of the volume of potentially relevant documents. The IT specialists should remain involved throughout the disclosure process and particularly in the pre-CMC discussions with your opponent about the parameters to be adopted for electronic disclosure, completion of the electronic disclosure questionnaire and the disclosure statement. Their input will also be invaluable in making documents available for inspection and to look critically at the disclosure given by you opponent to identify any gaps.
The requirement to co-operate is underlined by the court’s willingness to impose costs sanctions on a party who fails to engage in such discussions and then provides electronic disclosure in a manner which it has unilaterally selected. Here are some recent examples:
• In Earles v Barclays Bank [2009] EWCH 2500 (a case pre PD31B), the Judge found that the successful party’s conduct in relation to electronic disclosure (including at the pre-action stage) “fell below the standards to be expected of those practising in the civil courts” and reduced the amount of costs that the successful party could recover from its unsuccessful opponent.
• The court was also very critical of the parties for failing to agree keywords in advance of undertaking electronic disclosure in Digicel (St Lucia) Ltd v Cable & Wireless plc [2008] EWHC 2522 (another pre PD31B case). The Judge a strong message that parties may have to repeat expensive searches for documents (at their own cost) if it transpires that there has been no co-operation as to the ambit of the search.
It will therefore be a brave and potentially foolish litigant who refuses to engage in proper discussion with its opponent about electronic disclosure. Ignore PD31B at your peril.
If you would like more information or advice relating to a specific matter, please do not hesitate to contact Clare Mackay on 01727 798025 or by email at clare.mackay@salaw.com or any member of the Commercial Dispute Resolution team.
© SA LAW 2010
Every care is taken in the preparation of our articles. However, no responsibility can be accepted to any person who acts on the basis of information contained in them. You are recommended to obtain specific advice in respect of individual cases.