High costs and lost documents have given e-disclosure negative press at times. But is it as bad as it is made out to be? Vince Neicho looks at the transatlantic differences and ahead to the changes to come

E-discovery (as it is referred to in the US) or, more accurately, e-disclosure (as it is referred to here, post the Woolf reforms), has received a very negative press, mainly due to the huge costs associated with it. But, when all is said and done, is it really that bad?

In examining this question, we must distinguish between the position in the US and here in England and Wales. Either side of the Atlantic, parties will go through similar steps to preserve, retrieve, process and review their electronic documents. However, US courts have imposed headline-making sanctions in a few cases where the discovery process of electronic documents has gone awry and resulting material has been damaged, compromised, or gone missing altogether. In these cases, the punitive damages awarded have dwarfed the level of compensatory damages awarded for the substantive claim.

Although I am not suggesting that parties to litigation in this jurisdiction should take their disclosure obligations lightly, our courts will not subject parties to significant direct financial sanction. However, where there has been a deliberate attempt to suppress, omit or damage discloseable material, or where litigants do not abide by their disclosure obligations, they can, of course, still expect to suffer damage to reputation, should the court take them to task on their conduct, or to incur the cost of repeating the disclosure exercise. The court can also draw adverse inferences in respect of any damaged or missing material, which could have a profound
effect on a party's prospect of success at trial.

There are other differences between the US rules and our rules, from which litigating parties here can take comfort:

(1) The starting point for US litigants tends to be that metadata (the electronic data about data) is relevant. Given the fragile nature of metadata, this has the impact of increasing the need to ensure it remains unchanged during the retrieval and review stages of the discovery process. It also means that, in many cases, it is necessary for US litigants to engage the services of forensic computer experts to assist with the process.

In England and Wales, the rules and leading cases are silent as to the extent metadata is relevant as a matter of course, although the definition of 'document' within the rules expressly extends to metadata. The Admiralty and Commercial Court goes as far as to say that 'in most cases metadata is unlikely to be relevant'. 

Therefore, it is not always going to be necessary for parties to require forensic assistance when preserving and/or retrieving their documents, unless the litigation includes (or is likely to include) an allegation of fraud, or the authenticity of documents is likely to be brought into question. There will be occasions where forensic assistance may be required to dig deeper or plug any obvious gaps in a party's disclosure. For example, 'delete' does not necessarily mean 'delete' when someone clears out the deleted items folder of their email account. Often, forensic tools are able to mine for such deleted material and bring it back to life. Either way, the metadata will need to be collected, but in the absence of fraud allegations or questions as to authenticity, perhaps any routine changes to it, brought about simply by the process of accessing or retrieving it from the client's system, will be treated rather more sympathetically here, than it might be by the US courts. Wilful attempts to change or destroy the metadata are a different story.

(2) Whereas rules on both sides of the Atlantic embrace the concept of proportionality, the US courts start from a far broader scope. Discovery obligations extend to information that might lead to the discovery of admissible evidence. This is more akin to the Peruvian Guano (Compagnie Financiere v Peruvian Guano Company [1882]) approach that prevailed in our jurisdiction, whereby parties were obliged to discover and produce documents that 'might lead to a train of enquiry',  until the Woolf Reforms introduced the concept of 'standard disclosure' – which means parties are now obliged to disclose only documents that support or harm either side's case. The more targeted 'surgical' approach means that far fewer documents fall to be considered for disclosure here and, thus, costs should be much lower than a similar piece of litigation proceeding in the US.

(3) Generally speaking, US parties are likely to over collect. In other words, the producing party will collect perhaps substantially more documentation than is necessary, and the burden of sifting through to find the actual relevant material falls to the party's legal advisers. In England and Wales, to a point, parties are more likely to collect a narrower set of documents and only those that are likely to meet the disclosure criteria.

(4) Timing is an important issue, too. The discovery exercise in the US tends to be more of a one-off, upfront exercise that takes place early in the process. Because the wider disclosure collection in England and Wales typically takes place much later in the proceedings, rather than wait for the full disclosure exercise to produce the material to base the case on, it is necessary for parties to carry out a preliminary review of potentially relevant documents early, to produce the pleadings and then to re-visit the document collections to satisfy their disclosure obligations.

(5) Meet and confer – or, at least confer. The US has introduced a formal meet and confer session, where the parties are expected to do just that, with a view to discussing how they should each approach the discovery process and, to enable that to happen, also to disclose details of relevant aspects of each party's IT set-up and infrastructure. In other words, where are the documents and what is involved in retrieving them?

Our rules currently provide that the parties should co-operate and agree the scope of disclosure, the format of documents on exchange and provide details of each other's systems. Until recently, however, the obligation has been largely overlooked and, indeed, many litigators did not even know that it existed. It is buried away in paragraph 2A of the Practice Direction to the Civil Practice Rules (CPR) part 31. It has been the subject of a number of recent conferences on the e-disclosure and document management circuit, along with the need for co-operation between the parties, and the signs are that judges and masters are now beginning to insist it be complied with. The judgment of Mr Justice Morgan in the Digicel case (Digicel (St Lucia) v Cable & Wireless [2008]) makes frequent reference to the need for co-operation between the parties on disclosure issues. The concept also featured in the judgment of the unreported Abela case. The need for parties to genuinely co-operate with a view to limiting and agreeing the scope of disclosure and the logistics as to how it should be approached will be further enforced and highlighted by the introduction of the new Practice Direction and the e-disclosure questionnaire.

Dirty word?

If it is accepted that it is necessary to carry out an element of document retrieval and review early on, to enable advice on merits, the drafting of robust pleadings, or, perhaps, the negotiation of a settlement from a position of strength, what is the true cost of e-disclosure? Is it the cost of the exercise as a whole? Or is it just the cost of the additional steps the parties had to take to fulfil their disclosure obligations, beyond the efforts and costs already expended to enable the drafting of solid pleadings?

Add to this the 'new' co-operation between the parties and perhaps disclosure need not be such a dirty word after all – at least not in all cases.

Different, but almost the same?

Great emphasis has been placed on the concept of co-operation and the important role it can play in containing the cost of e-disclosure. Indeed, members of the US judiciary are very interested in our treatment of the e-disclosure process.

Excellently stage-managed by Chris Dale, independent consultant and founder/leading light of the e-Disclosure Information Project (which is doing admirable work in bringing our judiciary up to speed with e-disclosure developments and awareness/consequences of orders they are frequently being asked to make), many of us were fortunate to witness key members of the English judiciary speak jointly and, on many topics, as one with key members of the US judiciary. Senior Master Whitaker and designated Mercantile Judge, His Honour Judge Simon Brown QC, were joined on a panel at a recent conference with US Chief Magistrate Judge Paul Grimm and US Magistrate Judge John Facciola. The US judges shared some of their experiences of e-discovery issues and the interplay with active case management. Perhaps surprisingly, they were of the view that there are many elements in the CPR that might usefully be deployed in the US. Such was the interest shown in the CPR generally, it is intended that the US/UK dialogue should continue. If Judges Grimm and Facciola are able to bring their significant influence to bear, who knows, we might find that, in future, there will be considerably more in common between the two transatlantic systems.

Containing costs
In his preliminary report on the Review of Civil Litigation Costs, Lord Justice Jackson devotes an entire chapter to e-disclosure. Ably assisted by barrister Alison Potter, Jackson has carried out deep research into the nuances of e-disclosure and its associated cost, and he refers to the forthcoming e-disclosure questionnaire and re-drafted practice direction. I am sure that both, together with active case management by Judges and Masters, will be welcome additions to help control e-disclosure costs.

Vince Neicho is a litigation support manager at Allen & Overy and a member of the working group led by Senior Master Steven Whitaker.