E-discovery The Basics: From Proportionality to Technology Assisted Review

Transcription

1 MATERIALS / MATÉRIAUX 2012 Competition Law Fall Conference Conférence annuelle d'automne 2012 en droit de la concurrence E-discovery The Basics: From Proportionality to Technology Assisted Review Susan Wortzman Wortzman Nickle Professional Corporation (Toronto) September 20-21, et 21 septembre, 2012 Hilton Lac-Leamy Gatineau, Québec Presented by the Canadian Bar Association s (CBA) National Competition Law Section and the Professional Development Committee of the CBA Présentée par la Section nationale du droit de la concurrence de l Association du Barreau canadien (ABC) et le Comité du développement professionnel de l ABC

2 E-discovery The Basics: From Proportionality to Technology Assisted Review This paper was presented at: The Canadian Bar Association 2012 Annual Competition Law Fall Conference E-discovery The Basics: From Proportionality to Technology Assisted Review September 20-21, 2012 Susan Wortzman T: ADELAIDE STREET WEST SUITE 2020 TORONTO, ONTARIO, M5H 3P5

3 2 E-discovery The Basics: From Proportionality to Technology Assisted Review E-discovery generally refers to the preservation, identification, collection, processing/culling, data analysis, review, and production of electronically stored information. The management of electronically stored information ( ESI ) arises in a variety of contexts including litigation, regulatory and audit matters, and in the ongoing life cycle of a business. While the records being sought in the discovery process have not changed, the prevalence and volume of electronic records has irretrievably altered the litigation process as well as that used in regulatory matters - in a number of significant ways. The purpose of this paper is to highlight some of the key issues surrounding the developing and existing guidelines and best practices that have developed in Canada to provide assistance to those involved with the management of ESI. The key issues that will be considered are the meet and confer process, proportionality, the use of Technology Assisted Review ( TAR ) tools and managing privileged and confidential records. Meet and Confer Process In litigation, counsel is encouraged to meet and confer as early as possible in an attempt to reach an agreement on such issues as: potential sources of relevant electronic records; the appropriate temporal scope of e-discovery; the current retention policies of both parties; the methodology for collection of ESI; the steps that have already been taken to preserve documents; the form in which documents will be preserved and produced, including the information fields to be provided by each party; and timelines for preservation and production

4 3 This differs from regulatory matters including those involving Canada s Competition Bureau ( the Bureau ), where the communication between the parties is not necessarily adversarial. The SIR process allows the Bureau to obtain records and data required for the Bureau's review in a timely and effective manner, and through a more efficient and less formal information-gathering process than that associated with obtaining orders under section 11 of the Act. The Bureau is committed to minimizing parties' potential burden in complying with a SIR, to the extent possible, by narrowing the issues and/or the requirements for records and data. 1 The Bureau s Merger Review Process Guidelines further state that the Bureau encourages the parties to consult with them to: facilitate a more efficient and effective review process for the merging parties and the Bureau; however, realization of these benefits is largely dependent upon the parties' willingness to engage in full and frank communications with the Bureau, and to proactively assist the Bureau in obtaining information required for its analysis. 2 The concept of consultation is also endorsed in the Sedona Canada Principles Addressing Electronic Evidence 3, guidelines that have been adopted in Rules of Procedure in various Canadian provinces and by Courts in Canada. The Sedona Conference was founded in Sedona, Arizona in 1997 for the advanced study of law in large and complex antitrust, intellectual property litigation cases. 4 The purpose of the group was to create principles, guidelines and best practices for developing areas of law, including those relating to electronic discovery issues. By 2002, The Sedona Conference had branched into subgroups called the Working Group Series. Working Group 7 ( WG7 ) or Sedona Canada was 1 accessed on September 5, Ibid 3 The Sedona Canada Principles Addressing Electronic Evidence, The Sedona Conference, January The Sedona Conference, online at: (date accessed: September 26, 2011).

5 4 created in Its goal was to create a set of best practice principles for national circulation and application. WG7 included Canadian lawyers, judges and technology specialists who adopted the dialogue, not debate model of the U.S. based Sedona Conference. Together, individuals from across Canada participated in the development of The Sedona Canada Principles, which were published in January of The Sedona Canada Principles consist of 12 principles relating to electronic discovery issues in Canada, along with 43 pages of detailed commentary. The Sedona Canada Principles are all based in the concepts of proportionality 5 and reasonableness rather than perfection, to help guide and assist counsel with discovery. The principle of proportionality has gathered considerable support from the judiciary and the bar, as they grapple with the challenges of discovery and managing ESI. We suggest that all counsel should familiarize themselves with the 12 Sedona Canada Principles, and review the complete commentary and accompanying case law when dealing with a particular e-discovery issue. The Sedona Canada Principles have gained credibility and growing endorsement by Canadian courts. There are numerous cases from across the country adopting and referring to them, and subsequent provincial amendments to the rules of court of many jurisdictions either utilize their language, or expressly reference them as the discovery standard in Canada. The one page summary of the Sedona Canada Principles without commentary (attached) provides a best practices manual for managing electronic evidence in Canada. With respect to meet and confer sessions, Principle 4 provides: 5 Ibid, Principle 2

6 5 Counsel and parties should meet and confer as soon as practicable, and on an ongoing basis, regarding the identification, preservation, collection, review and production of electronically stored information. It is interesting to note that both Sedona Canada and the Bureau recognize the value of collaborative discussion with the goal of developing an efficient approach to managing ESI. This collaboration assists in avoiding misunderstandings and all potentially costly mistakes. In the context of the Bureau, its Guidelines state that by consulting with the Bureau, the parties can: clarify the information requested by the Bureau; discuss who holds the data or information requested; address confidentiality concerns; query whether there are other sources or forms of information that may more directly respond to the Bureau s request; and determine whether a date range can be applied to the data. Proportionality Another key challenge facing counsel when addressing e-discovery in the context of litigation is proportionality. Volumes of electronic data not only affect budgets and time constraints, but in the case of litigation, can deny one s access to justice. In the context of litigation, proportionality refers to the balancing of various factors. Principle 2 of the Sedona Canada Principles provides: In any proceeding, the parties should ensure that the steps taken in the discovery process are proportionate, taking into account; i) the nature and scope of the litigation, including the importance and complexity of the issues, interested amounts at stake; ii) the relevance of the available electronically stored information; iii) its importance to the court s adjudication in a given case; and iv) the costs, burden and delay that may be imposed on the parties to deal with electronically stored information. 6 6 Ibid, Principle 2

7 6 In the litigation context, case law is developing that describes what is a proportionate approach to an e-discovery exercise. A simple example is the case where a million dollars is at stake, however, the e-discovery exercise alone will cost $750,000. In that example, having to go through an expensive e-discovery exercise would be disproportionate unless there are very important issues at stake in the matter. All of these factors must be balanced. In the context of the Bureau, the same balancing exercise with respect to the cost factor is not necessarily applied. However, the Bureau s guidelines do state: these Guidelines outline the SIR process, including a description of the practices and procedures that the Bureau will follow to ensure that the potential burden on parties in responding to a SIR is no greater than necessary, while at the same time enabling the Bureau to obtain information required to conduct its review. The Bureau confirms its willingness to consult regarding: narrowing issues, the approach parties will take to the collection, processing, review and production of relevant information, the scope and methodology used to collect the information. Being able to work with the Bureau on all of those factors best serves both parties. If both the Bureau and the parties are truly looking for limited information, then the organization should only have to collect, process, review and produce what is truly relevant to the Bureau. This ensures that that exercise is proportionate and necessarily involves discussion as to timing, cost, the importance of issues, narrowing issues and the scope of the matter. Those discussions are critical to the ensuring a proportionate e-discovery exercise in the litigation context as well as in the context of a Bureau investigation or review. Technology Assisted Review Predictive Coding Predictive coding has received a lot of attention lately as the magical wand in the e-discovery bag of tricks. However, as with any new technology, there are many proposed uses and marketing claims that are confusing the real picture of how

8 7 these tools can assist to make the e-discovery process more efficient and ultimately reduce costs. In a nutshell, predictive coding involves the application of sophisticated artificial intelligence that permits the computer to make suggested determinations based on human interaction and the content of documents. All predictive coding incarnations basically involve a review lawyer coding a subset of the records in the collection. The system examines the decisions made by the reviewer and identifies properties of the records that it can use to automatically make determinations. As the reviewer continues to code records, the system predicts what the reviewer will code. When the system s predictions and the reviewer s actually coding coincide (within reason), the system has learned enough to make confident predictions on its own. Predictive coding is being applied at several stages in the e-discovery analysis and review processes: Culling: In this mode, a lawyer who is an authority on the matter makes relevance decisions on a subset of the records. Once a sufficient number of records have been reviewed (typically a few thousand), the system applies its predictive analysis to the entire set to cull out the records most likely to be relevant. These records can then be subjected to the normal, manual review process. Subjective Coding: The predictive coding system examines the subjective coding decisions made by lawyers as they manually review records. When a sufficient number of records have been reviewed, the system will start to make coding suggestions for subsequent records to assist the lawyers. Review Quality Control: Along the same lines as predictive subjective coding, the system uses the subjective coding decisions made by lawyers to predict how documents should be coded. However, instead of suggesting codes for unreviewed records, the system will apply the predictions to all manually coded

9 8 records and identify those records where its predictions and the actually coding diverge. This will enable reviewers to zero in on documents that may not be coded correctly. Prioritization of Records for Review: Predictive coding can also be used to prioritize records in a review. Once a sufficient number of records have been manually reviewed and coded, the system can group un-reviewed documents based on its coding predictions. The review project manager can then group together all documents likely to be coded relevant, for instance, and assign these to be reviewed first. Predictive coding technology is also being considered in several electronic records management solutions to permit automatic classification of records, removing the burden from individual users. This technology is being incorporated into more and more e-discovery software systems, and may soon become a standard way to cull and review electronic data. Managing Privileged and Confidential Information E-discovery involves a heightened or special risk of inadvertent or unintended disclosure of privileged or confidential information due to the volatile nature of ESI. The increased volume of ESI also augments this risk. Referencing Principle 9 of the Sedona Canada Principles: During the discovery process parties should agree to or, if necessary, seek judicial direction on measures to protect privileges, privacy, trade secrets and other confidential information relating to the production of electronic documents and data. 7 Parties will always wish to identify privileged communications in Bureau matters and parties will also likely wish to identify confidential information and trade secrets. 7 Ibid, Principle 9

10 9 Counsel can discuss measures to protect their clients from inadvertent or unintended disclosure of privileged documents. Also, from the client s perspective, with respect to confidential records, whether or not the confidential information must be provided to the Bureau is a question of relevance. However, when conducting large scale reviews, counsel must ensure that if confidential information is being transmitted to the Bureau that they are well aware of that information and make their client well aware of it as well. What is critical is that counsel ensure that their client s confidential information is known to their own clients before it is released to a third party. Conclusion While Bureau matters differ from litigation matters, many of the principles and suggestions that are espoused in the Sedona Canada Principles apply equally to responding to a SIR issued by the Bureau. In fact, both the Bureau s own guidelines and the Sedona Canada Principles are essentially practical guidelines for counsel to assist them in managing electronic evidence. The concepts of conducting meet and confer sessions, having a proportionate process to manage both the costs and the efficiency of an e-discovery project are always practical considerations. These guidelines should all direct counsel to respond to requests, investigations, litigation or audit matters in a timely, cost effective and proportionate manner.