We live in an electronic world. Almost all documents are created electronically. The latest statistics show that only 7% of business documents are created other than by the use of computers. That 7% comprises all manuscript notes, letters and memoranda. And, a year from now, that figure of 7% will have reduced again.

Indeed, 70% of documents that are now created in the course of commerce are never printed to paper. The fax machine, which revolutionised commerce in the 1980s, is yesterday's gadget. Today the preferred mode of commercial communication is e-mail. Faxing has given way to scanning and e-mail. In the major financial institutions and corporations almost all communication is electronic.

Three years ago, when preparing a case for disclosure, the proportion of physical documents as against electronic documents comprising the makeup of the disclosure list would have been high. That is a function of the retrospectivity of disclosure. Today the proportion is very significantly lower.

The ease of electronic document retention and the relatively low cost of storage space might suggest that all electronic documents would be retained indefinitely. The reality in the commercial world is rather different. The retention of vast amounts of active data can progressively slow down the functioning of computers. The main culprit is e-mail. Businesses deal with that problem by putting in place purge policies designed to delete redundant e-mails after a relatively short time period has elapsed, normally between 45 to 90 days. Retention beyond that period requires active intervention, whether by the use of e-folders, electronic archiving or (becoming less common) printing to physical files.

Even with these attempts to control the data held by computers, the reality is that the most basic computer has the capacity to retain an astonishing amount of information. A personal computer with an average 20Gb hard drive can store enough data to generate a pile of A4 paper the height of Snowdon. Imagine having to review that many documents! If you assume that each page takes a minute to review, one person working eight hours a day, 300 days a year, would take 29 years to review the contents of that PC. A 60Gb hard drive would take 88 years to review. A 300Gb hard drive (by no means uncommon) would keep a lawyer fully occupied for 438 years.

So what are lawyers supposed to do in 2004 when instructed to handle litigation on behalf of a large corporation or bank? The answer, no doubt, is not to panic and to keep reminding oneself that disclosure should always be conducted with proportionality as the principal yardstick.

A computer database has been held to be a document for the purpose of disclosure. But, even if it is clear that the database will contain documents falling within the applicable test for disclosure, it is impossible to contemplate that lawyers could be required physically to review the entire contents of that database. What is required is a "reasonable search" – but what is a reasonable search if left to lawyers and their clients to work out. No amount of searching through the White Book will produce any guidance on how to handle electronic documents. Moreover, even though a draft practice direction for the use of information technology in the English courts is in the course of being prepared, it will say nothing about how disclosure is to be conducted in electronic media.

The first step is to establish what data the client retains in electronic form, where it is held and what steps are needed to ensure, as far as possible, that relevant documents are preserved. Usually it will be essential to obtain specialist information technology assistance at the outset – often from within the client's organisation. If that assistance is unavailable, it will need to be sought externally.

Parties to litigation have a duty to preserve relevant documents. When litigation is not threatened or in contemplation, there can be no objection to document retention policies that have the effect of destroying documents that might otherwise be disclosable. But what should a solicitor advise when a dispute arises? Should e-mail retention policies be interrupted? Should backup tapes be preserved? What about the buffer memories of printers and fax machines? What about voicemail? The list is endless and there are no hard and fast rules.

The lack of uniformity in dealing with electronic documents by different organisations suggests that, at an early stage of litigation, it would be sensible for the parties' advisers to meet in order to work out a protocol for the preservation, handling, disclo-sure and inspection of electronic documents. If agreement cannot be reached, it may well be necessary to involve the court.

It is tempting to try to limit searches for electronic documents only to active data – that which can readily be found. Unfortunately in most cases this would be the electronic equivalent of looking in only one out of a large number of filing cabinets, knowing that the others were likely to hold relevant documents. It will be necessary to go further in most cases.

In many ways this is unfortunate, not least because delving into backup data can be expensive. In the seminal American case on electronic disclosure, Zubulake v UBS Warburg LLC, it was estimated by the defendant that the restoration of backup tapes would cost $300,000. Recent experience of dealing with the same issue in UK litigation suggests that restoration of backup tapes can indeed be expensive and time consuming, but that the cost will in most medium- to large-value cases be proportionate to the amounts at stake.

Electronic disclosure is necessary. It is a development that is already upon us and it is here to stay. It may well transform the way that disclosure is conducted in commercial litigation and, indeed, in many cases outside the commercial arena. An insight into the way discovery is handled in the US may shine a light on the way that disclosure could be handled in the UK three years from now.

Common practice in the US involves mirror-image copying of hard drives, conceptual searching and filtering and the uploading of data to online repositories. Attorneys can also carry out discovery online from remote locations anywhere in the world using state of the art encryption for security and confidentiality.

Documents can be marked as irrelevant, privileged or placed into other categories. They can be redacted. Privileged notes can be attached by lawyers – notes which remain hidden when documents are electronically conveyed to third parties. Lists of documents can be prepared automatically.

Discovery of electronic documents is granted electronically. Inspection is conducted by searching the database of electronic documentation by interrogating documents and their metadata. Working together with opposing counsel, trial bundles are eventually created in electronic format and used electronically in preparation for and during the course of the trial.

At Linklaters we are already using these methods to handle large volumes of electronic data. Until recently these methods have, however, been the exception and not the norm. Unless unexpected judicial intervention interrupts the development of disclosure practices suitable for the electronic world, it will not be long before dis-closure in commercial cases is almost exclusively electronic.

Mark Humphries is head of litigation at Linklaters.

Legal Week and Kroll Ontrack are holding Electronic Disclosure Seminars throughout June.

For more information about these, or individually tailored workshops, please e-mail: [email protected]