Steps Towards a Uniform Framework for e-discovery (including an update on technology practice notes in civil proceedings)

Transcription

1 Steps Towards a Uniform Framework for e-discovery (including an update on technology practice notes in civil proceedings) Mr David McGrath, Manager Sydney, Potter Farrelly & Associates Background E-discovery has raised significant issues for litigators and their clients, including evidence integrity, preservation of meta data and its forensic value, recovery of electronic documents from backup tapes, the sheer volume of electronically stored information and its impact on the scope of discovery and burden on the parties, and the appropriate exchange of electronic documents. These issues are magnifying obligations in discovery, leading to an increase in the costs of discovery and litigation generally. 1 The Victorian Law Reform Commission s Civil Justice Review Report, launched on 28 May 2008, noted It is clear from a survey of discovery reforms in other Australian and overseas jurisdictions that there is a general acceptance that discovery is essential to the administration of justice, but at the same time it is responsible for significant problems including undue cost, delay and unfairness. 2 In December 2006, the US through the Federal Rules of Civil Procedure, introduced wide ranging measures to tackle these issues. 3 In 2007, both the Supreme Court of New South Wales and Victoria released updates in this area. This year, the Federal Court will do the same. Recent Changes Victoria released an updated version of its Practice Note Guidelines for the Use of Technology in any Civil Litigation Matter No. 1 of 2007 which replaced its 2002 version and applies to all matters. The Federal Court is soon to follow suit with an update to its existing Practice Note No. 17. Guidelines for the use of information technology in litigation in any civil matter which came into effect on 20 Apr 2000 with its new Practice Note (currently in draft form) expected to be published in July. 1 There has been a stream of commentary from leading judges in recent times about the increasing cost of discovery For example, Chris Merrit: E-documents to slash expenses July 27, 2007 Australian IT see for comments by Justice Spigelman. 2 FORM+-+Civil+Justice+Review%3A+Report Chapter 6 Paragraph The Hon M E J Black AC, Chief Justice of the Federal Court of Australia in his paper New Technology Developments in the Courts - Usages, Trends and Recent Developments in Australia presented to The Seventh Worldwide Common Law Judiciary Conference commented The recent amendments to the US Federal Courts Rules of Civil Procedure, effective December 2006, represent an important new development and will be influential elsewhere. They effectively introduce a new regime to cater for discovery of Electronically Stored Information ( ESI ).

2 New South Wales has not updated its current use of technology Practice Note, No. SC Gen 7 Supreme Court Use of technology (SC7) preferring to implement changes instead through Supreme Court Equity Division - Commercial List and Technology and Construction List Practice Note No. SC Eq 3 (SC Eq3). Whilst the changes only currently apply to commercial, technology and construction matters they are likely to be applied to other categories of litigation in due course 4. Each of these practice notes represents a solution to the growing e-discovery issues. Each also breaks new ground in encouraging the use of technology in litigation, particularly in relation to e-discovery; and guiding or directing practitioners on how to take charge of the novel issues presented by the management of electronically stored information ( ESI ). Astute observers, who have familiarised themselves with these changes, will also note that the scope and character of discovery is under review. Naturally, each court implemented a solution which, in its view, is the best possible solution achievable to these issues. Inevitably, there will be differences between the solutions adopted. As we live in a federation, we have an opportunity to compare the various approaches taken. This is valid and informs further development of practice in this area. Further, it is valid to ask whether we can move towards a uniform framework for e-discovery in this country, rather than adding additional layers of complexity by requiring lawyers and legal technology professionals to learn and implement multiple systems for managing information in litigation across different jurisdictions. After all, one of the major aims of these changes is to better manage complexity. Each set of practice note updates will therefore be assessed in accordance with the following key issues: Judicial Management of e-discovery; Pre-Discovery Conferences; Clear Guidance and Support; Currency with practices and technologies; and Scope of Discovery. The assessment will highlight factors in common as well as differences in approach. 4 Chris Merrit: E-documents to slash expenses July 27, 2007 citing Spigelman. J, Australian IT

3 Judicial Management of e-discovery E-Discovery Thresholds The Victorian court appears to take the view that the primary responsibility for how it uses technology in the proceeding lies with the parties 5 and that its role is to adjudicate disputes where necessary. 6 Consistent with that theme, the new Victoria Practice Note does not specify a document volume threshold when determining when the Practice Note applied and/or when discovery should be made electronically. Shortly after its release, Sandra Potter, one of the lead consultants on the project, commented that use of the practice note is likely to be appropriate where one or more of the following apply: a substantial portion of the potentially discoverable documents consists of electronic material; the total number of these documents exceeds 1000; there are more than three parties to the proceeding; and the proceeding is multi-jurisdictional or cross border. 7 This approach remains broadly in line with the traditional advisory approach adopted previously in practice notes of this nature. For example, in New South Wales, the existing technology practice note, SC7 also stops short of specifying a threshold volume of documents over which parties must make electronic discovery. Again, the court encourages parties to consider the use of technology 8 and reserves the right to make directions to that effect. 9 Also, in the Federal Court, the existing PN17 also encourages the parties to agree, before commencement of discovery, upon a protocol for exchanging documents and indexes in electronic format when there are 500 discoverable documents between the parties. 10 The contrast between this traditional approach and that taken in SC Eq3 (which I note is post the C7 litigation) 11, represents a true step change in approach. SC Eq 3 provides that all discovery is to be made electronically save by agreement of the parties or order of the court. 12 This is a sure sign that the court perceives that the use of technology for e-discovery by practitioners is insufficient, and that the court needs to be active in making sure it is used appropriately. 5 Para 2.4 states that The Court takes the view that parties and their lawyers have the primary responsibility to agree upon the matters the subject of this Practice Note. See also paras 2.3, 2.5 and Para 2.1 states that the note applies to all civil matters by agreement of parties or court order. 7 See Sandra Potter, Practical Electronics, Lawyers Weekly, 29 March at 11 February Para 9 9 Para Para 4 11 Seven Network Ltd v News Ltd [2007] FCA 1062 (C7 Case) ( 12 Para 28

4 The new Federal Court Practice note is also expected to take a much stronger stance, in that (it is understood) it will be requiring parties to make electronic discovery where the number of discoverable documents is likely to exceed In short, whilst all jurisdictions have increased the scope of matters to which electronic discovery applies, the NSW and Federal Court approaches progress further in this area and are applying an increasing level of judicial supervision to the application of e-discovery. This difference in judicial approach is reflected all the way through the practice notes. Pre-Discovery Conferences Consistent with its more conservative approach to the question of requiring parties to make discovery electronically, the Supreme Court of Victoria in its Practice Note chose not to require the parties to meet to discuss the best way to proceed with technology. 14 This is once again consistent with the previous advisory approaches adopted in New South Wales and the Federal Court With the new crop of issues arising during e-discovery, Justice Black has commented that a key issue for the court is the need to focus the parties early in the discovery process on issues associated with electronic evidence and to also ensure that the court is involved early, before discovery commences. 15 The changes in New South Wales and the Federal Court reflect this view promoting higher levels of engagement. In New South Wales, one of the key changes brought in by SC Eq3 was to require the parties to meet to agree on a number of matters including: the format of the electronic database for the electronic discovery; the protocol to be used for the electronic discovery including electronically stored information; the type and extent of the electronically stored information that is to be discovered; and whether electronically stored information is to be discovered on an agreed without prejudice basis. In the Federal Court, under the new Practice Note, it is understood that a pre-discovery conference will be required to be held before a judge, to enable the parties and court to confer to determine how to manage discovery efficiently in an electronic environment. Any agreement would then be recorded and any outstanding issues resolved within a further period of time. 13 See comments by Seamus Byrne Compliance with the proposed practice note will be mandatory in the majority of matters say those exceeding a certain volume of documents, likely to be 200, after a brief period of grace 14 It does of course encourage parties to consider the use of technology early and, in particular, apply it to discovery. Its also places the initial onus on the parties to agree the matters the subject of the practice note and explicitly provides the right for any aggrieved party to apply to the court. See paras 2.3 through The Hon M E J Black AC,Chief Justice of the Federal Court of Australia in his paper New Technology Developments in the Courts - Usages, Trends and Recent Developments in Australia presented to The Seventh Worldwide Common Law Judiciary Conference

5 Such a conference is intended to produce an agreement between the parties as to the scope of discovery and the determination of the Document Management Protocol. Clear Guidance Default Exchange Protocol The Victorian Practice Note provides for a default standard exchange protocol that all parties may act in accordance with, in the absence of a court order or a mutually agreed protocol. 16 In NSW, SC7 sets out a checklist for the parties to develop a suitable protocol. However if the parties are unable to agree on a protocol then the default options apply as a minimum standard. SC Eq3 does not change this position as it only requires parties to agree on a protocol. Arguably, though, as it endorses a flexible rather than prescriptive approach to discovery to facilitate the making of orders to best suit each case 17 this extends to any orders in relation to e-discovery or the exchange protocol. In the Federal Court under the new Practice Note, it is understood that a default protocol is provided, where discoverable documents are reasonably anticipated to be less than This can be varied by the parties with the approval of the court. Once there are more than 5000 documents, the court recommends that the parties consider the contents of the Advanced Document Management Protocol when agreeing a protocol. Provision of Support/Education The Victorian Practice Note and supporting documents published by the Court are significant resources towards educating the profession about e-discovery and, in particular, some of the issues associated with ESI. As a result, the Practice Note itself was redrafted to make it easier for lawyers to understand. In addition to the standard resources including a technology checklist, guidelines for database fields, a sample document and glossary, further materials were made available to practitioners including Discovery of Electronic Material FAQ, a Draft Protocol Template and a Hardcopy Core Bundle Preparation document on its website 18. In total, approximately 50 pages of materials are available to practitioners. Also, in the region of 40 seminars were conducted in Victoria to educate the profession about the changes. Importantly, the court has made available specialist resources to assist practitioners in the form of an e-master to resolve disputes, and an e-litigation Co-ordinator. The Practice Note also provides some useful guidance to practitioners on costs of e-discovery including the expenses of retaining necessary external service providers to assist the practitioner in navigating the intricacies of e-discovery. 19 Making this level of support and assistance available to practitioners serves the courts' needs in getting better outcomes from the use of technology, and levels the playing field between the large, very well resourced law firms and smaller firms. 16 Para Para Para 3 : The reasonable costs incurred in complying with this Practice Note, including the expenses of retaining necessary external service providers, will be readily treated as being necessary and proper for the attainment of justice or for enforcing or defending the rights of a party within the meaning of Rule

6 In the Federal Court, a lot of time and effort has been invested in the development of detailed protocols and a checklist which will guide practitioners through the decisions to be made in order to extract the most from technology. Similar to Victoria, the volume of information already is likely to exceed 50 pages. In addition, the court has eregistrars available to the parties, and is currently settling a framework to ensure parties and practitioners have access to the necessary expertise to assist them. The Court also intends to facilitate education and awareness in relation to this Practice Note and its Related Materials. It also intends to maintain a register of other suitably qualified persons and organisations that provide consulting, mediation, Document Management and training services to facilitate the implementation of this Practice Note. To the contrary, New South Wales has not produced any amendments to its Practice Note, has not created any specialist positions to assist practitioners, and has not made any resources available to assist practitioners and parties to navigate this area. I suspect that this approach, if continued, will to some extent undermine the outcomes the court is trying to achieve from changes to SC Eq3. Additionally it does nothing to level the playing field between large and small firms. Currency Legal technology practices and technologies are governed by these practice notes and there are a few areas that are the subject of much debate within legal technology circles at the moment. I will touch on three. Document Exchange Format The first is the format in which electronic documents are exchanged. Traditionally, electronic document management systems designed for litigation support settled on an imaging format known as Tagged Image File Format or TIFF. The file format stores images, including photographs and line art in a static image. It was a stable technology at the time hardcopy litigation support software was in its infancy, and quickly became a de facto standard for storing scanned hardcopy documents. A primary benefit of TIFF is its support for redaction or masking of privileged or confidential sections of documents. As a result, the TIFF image format was tightly integrated into litigation support software particularly through viewers, redaction tools and other image management tools. TIFF is a very stable format, and in fact was purchased in 1989 by Adobe Systems which has not further developed the standard since. In 1993, Adobe Systems released a document format called Portable Document Format (PDF) which was designed specifically for document exchange. As this is a standard which has been actively developed by Adobe, it supports increased functionality including the critical full text search component. As a result of this additional functionality, the format has also been in widespread use within litigation support software, alongside the TIFF format. Some litigation support software more actively supports the PDF format than the TIFF format, however most provide wider support for TIFF than PDF. There has been a long running debate within the legal technology industry as to whether the default exchange format should be PDF or TIFF. One of the criticisms of the

7 PDF format though is that it does not support, or at least support as well as TIFF, the practice of electronic redaction or masking. Also, multi-page PDF does not support as well as single page TIFF fast page retrieval over web based litigation support systems and in court where a particular page, perhaps in a hundred page document, is referred to. Up until now, the debate has been resolved by making TIFF the default document exchange format and PDF an alternative format. This is the default standard currently enshrined in Victorian and New South Wales practice notes. It is understood that the new Federal Court Practice Note will, for the first time ever, reverse the position making PDF the default exchange format and TIFF an alternative format. The primary reasons advanced 20 for this change appear to be: The ability to text search large collections of electronic documents. The benefit of this feature is enhanced when the majority of documents being discovered are sourced electronically and are text based such as s, word documents, Excel spreadsheets etc. These documents are virtually 100% text searchable whereas document images e.g. photographs or scanned hardcopy do not provide perfect full text searching capability. The recently released PDF format (version 9) actively supports document numbering and redaction. The PDF format is a living, growing technology which will better support both the future technology requirements of litigation support software and scanning, but in particular retains more of the original character of a native document which is converted into an image format for production. 21 Document Descriptions Another developing trend in e-discovery which the new Federal Court Practice Note is understood to pick up on is the use of meta data from electronic documents to describe the documents in a discovery list. In the early litigation support systems, in order to search for a document in a database, it was objectively coded, a process whereby a paralegal reviewed the face of the document for information such as create date, title, author, author organisation, receivers (for letters, facsimiles and memorandums), type (letter, memo etc.). This information, so recorded, also served as a functional document description on a discovery list e.g. Letter from G Harvey of Harvey Norman to J Singleton dated 1/1/2003 re Joke. Unfortunately, it was a time consuming and relatively expensive process, particularly when there were tens or hundreds of thousands of documents to objectively code. For all the challenges that discovery of electronic documents now brings, the upside is that most forms of electronically stored information, particularly s, come with their own descriptive information already built in. For s, this includes date (sent or create), subject, from, to, cc and bcc. For other electronic files, it includes filename, type, name of the folder it was stored in and a variety of dates including date last modified. It is much cheaper to extract this information from the document than it is to have a paralegal review the document and record descriptive information in a database. 20 In discussion with the lead consultant, Jo Sherman. 21 See for a legal feature list.

8 The problem is that this information, particularly for documents other than s, does not provide as full a description of the document as does the objective coding. As a result, the extracted metadata is supplemented by objective coding either before discovery review or actual discovery itself. Where you have a very large electronic document collection it can make more sense, on a cost benefit basis at least, to forego the cost of objective coding and simply discover the extracted meta data. It is understood the proposed Federal Court Advance Document Management Protocol will expressly contemplate this option. The only other potential criticism of this approach is that the document is less searchable in a database. This drawback is, however, more than offset by the requirement that parties provide searchable images. In addition, the overall cost of providing searchable images and extracted metadata is still much lower than objective coding. In New South Wales and Victoria, whilst this option is probably still available to the parties by agreement, the default exchange protocol requires that all exchanged documents be objectively coded. Quick Peeks Quick peeks or clawback discovery refers to a discovery provided subject to a disclaimer that there is no waiver of privilege in any of the materials discovered. It is a practice which has emerged in the United States as a response to a situation where the sheer volume of electronically stored information collected for a discovery review is such that the cost of reviewing each item for privilege is prohibitively high. New South Wales, via the changes to SC Eq3, is the only jurisdiction to explicitly offer an option to parties to agree discovering ESI on an agreed without prejudice basis, without the need to perform a privilege review and without prejudice to an to entitlement to subsequently claim privilege over any information that has been discovered. The Victorian Practice Note is silent on this issue, whereas the only reference to be found in the draft Federal Court Practice Note that I have reviewed was a placeholder buried deep in the pre-discovery checklist under a heading Management of Inadvertent Disclosure and Claims of Privilege. I guess we will have to wait and see the Practice Note when it is published. This is an interesting and contentious practice which will no doubt be cause for considerable debate in the future. Conclusion It is unlikely that we will see a single set of guidelines for e-discovery crossing all jurisdictions in Australia (or even in New South Wales, Victoria and the Federal jurisdiction) just as there is no single set of guidelines for discovery in general, or for the conduct of litigation generally. The best we can do is highlight the strengths and weaknesses of respective attempts to resolve these thorny issues, in the hope that decision makers will continue to aim for improvements. In my view, Victoria ought to consider, as recommended by the Victorian Law Reform Commission recently, taking a stronger position on e-discovery by introducing and enforcing more rigorous case management in this area. In light of some of the novel areas being entered into by NSW and soon by the Federal Court (document exchange formats, document

9 descriptions, and quick peeks ) it may also want to consider a review of its default protocol. Having said this, the court has done very well in terms of providing guidance and making resources available to practitioners and has started addressing a very important area costs! New South Wales, in its changes to SC Eq3 has taken a very strong position on management of e-discovery and encouraging parties to effectively use technology. As this is essentially a pilot scheme (given that it only applies to some lists) the will no doubt factor in feedback to these changes when broadening its application. I think they have undermined what they hoped to achieve from these changes by not providing a framework to better support parties and practitioners. Updates to the technology Practice Note are called for in order to keep up with current practices and continue to promote a level playing field. Finally, the Federal Court has invested a lot of resources and time in getting this next iteration of the Practice Note as right as it can. It will be taking a strong stance on case management of e-discovery, after having addressed the current legal technology practices that arise from the management of ESI. It has taken its time to conduct a thorough review of its existing Practice Note, exchange protocol and associated materials and established a framework to support practitioners including providing them with access to legal technology expertise that they need. Time will tell but it looks like setting a benchmark for further development in this area.