Law and technology

More information is coming soon on New Zealand’s e-discovery solution - the electronic discovery solution developed right here in New Zealand to support the new discovery rules taking effect on 1 February 2012 (see this earlier post).

One feature is the ability to safely redact PDF documents directly in a web browser.

Redaction is increasingly important in New Zealand civil litigation, given the volume of documents and the propensity for sensitive and/or privileged information to be mixed with other discoverable information. The High Court Rules (current and new) allow redaction of certain information on the grounds of confidentiality and/or privilege. Conditions can be proposed by the disclosing party to protect confidential information – for example, the provision of certain documents (redacted or not) may be made on an “attorney’s eyes only” basis (to adopt the US parlance; in practice it often extends to experts too). Other parties can challenge the proposed restrictions, however this requires them to bring an application to do so, and in practice such issues can usually be resolved without the Court’s intervention.

The new High Court Rules will generally mean that documents must be redacted electronically, in PDF format. In practice, there are 3 key challenges to doing so:

1. Making it easy – ideally, the lawyer will be able to make their own redactions directly on each PDF while viewing it anywhere and any time, without the need to install separate standalone software and without any fuss. In particular, this avoids the  inefficient and obsolete process of printing documents, manually redacting them, and then re-scanning them.
2. Making the redactions permanent and secure – there are many real-world examples of unsafe, or non-permanent, redactions, where an apparently redacted document still allows the underlying text to be easily retrieved (read about a recent example – by a judge! – here).
3. Handling duplicates – there is no point redacting one version of a document, only to have a duplicate produced in original form.

Safe and easy PDF redaction (via the browser) is one of the features of the New Zealand developed e-discovery solution that will be announced soon. Stay tuned for more information in coming weeks.

A pre-announcement:

New High Court Rules (and District Court Rules) promoting the use of electronic discovery come into force on 1 February 2012. Key features of the “default” regime under the new rules include the following:

• Discovered documents must be exchanged electronically.
• Parties must provide a standardised list of discovered documents.
• Documents must be provided in PDF format (unless not possible for particular file types), with the document number as the filename.
• Native files must be provided if requested.
• Parties must take reasonable steps to exclude duplicates.
• Emails and attachments are to be listed separately but sequentially on the document list.

These changes reflect the ever-increasing volume of data (in particular, electronic data) in modern litigation, and the need to effectively and efficiently handle the discovery process.

A New Zealand solution

This new regime requires a new solution. Stay tuned for an announcement of a new web-based electronic discovery system developed right here in New Zealand, that supports the new rules on electronic discovery as well as providing early case assessment and detailed review capabilities. This system has been locally developed over the past several years.

Key features include:

• New Zealand designed and developed system, cognisant of the new High Court Rules on electronic discovery
• Fully managed, web-based solution – no software to install or maintain, and can be accessed on any computer, notebook, or tablet
• Handle projects ranging from a few dozen, up to hundreds of thousands of documents
• Securely access, review and upload project documents anywhere, anytime
• Track discoverability, privilege, confidentiality, and other document attributes
• View common document formats in any standard web browser without the need to install Office software
• Powerful search and analysis capabilities across the document repository
• Generate discovery lists and electronic bundles of documents (native format or converted to PDF, stamped with document numbers)
• Automated handling and de-duplication of Outlook email archives and common document types
• Single-user or collaborative multi-user options (including the ability for clients to upload their own documents)
• Fully locally supported
• Customisable by a local development team
• And much more!

Check back for more information in coming months.

(features described are subject to change before the system is publicly launched)

The Herald recently reported on a lawyer’s “negligent or incompetent” use of the Landonline e-dealing system that was said to “imperil the electronic system” of land titles. The incident prompted another lawyer to warn that the e-dealing system was insecure.

While any improper or irregular dealings with something as important as land titles is a serious matter, is the integrity of the Landonline system – or the concept of e-dealing for land titles generally – called into question based on one, or even several, such incidents? No – at least not before a proper comparison with the rate of mistakes/problems/fraud under the old system before such a comparison is made.

There were of course occasional issues with old, paper-based land title system. It is too early to tell if the new system (which was only fully phased-in in 2009) is, statistically, more or less secure than the old system. In the meantime, the Registrar-General of Land, Robbie Muir, has defended the new system, making the point that an electronic register is more secure than the old paper-based one:

[The old system had] the potential for forgery and the land registry did not have reliable means of verifying the authenticity of land owners’ signatures or establishing that proper identity checks had been undertaken.

Muir is right. The reality is that modern technology is usually far superior to an “ink and paper” equivalent. Technology can implement mathematically-verifiable encryption and validation methods to confirm certain transactions and events have occurred. The idea that mashed-up pieces of wood stained with ink provides superior integrity and efficiency to a well-designed electronic system is quaint, but plainly wrong. Of course, the key requirement in the previous sentence is “well-designed”. A system with crucial flaws may be completely insecure. Replacing a good paper-based system with a poor electronic one is a recipe for disaster.

Technology is, and for a long time yet will be, subjected to a double standard when compared with a non-technical equivalent. For example, there are thousands of instances of mail stolen from letterboxes, mail-rooms and post offices each year. Generally, none of this is particularly newsworthy. However, if an ISP has some emails “stolen” by a hacker or staff member, it would likely be reported. In the same vein, credit card fraud is common in the physical world, yet often reported with alarm if the same thing happens online.

The recent incident with the e-dealing system highlights this. As Robbie Muir points out:

Given the large volume of land transactions registered each year, there will inevitably be isolated cases where things go wrong. The same was true of the paper-based system. However, under the Landonline system it is possible to quickly establish what has occurred and who is responsible.

Some lawyers I know or have dealt with – young and old – remain curiously uncomfortable, and even suspicious, of email, electronic data, online dealings, and the like. On several occasions I have had lawyers refuse to correspond by email supposedly because of “problems previously encountered” with this new-fangled technology. So I send them emails, and they reply with snail-mail and faxes (yes, in 2010).

A particular hang-up is the occasional insistence on “originals”. Back in the days when important documents were drawn up by hand (really important documents were on goatskin parchment), it was fairly obvious what was the original document, and what was a copy. The need for requiring an original was clearer. And when there is a piece of paper, it is usually easy to tell whether it has been physically signed, photocopied, or had a computer printed signature applied. But with electronic files, concepts such as the “original document” quickly lose meaning, as does the need for an “original” and signing at all. However, a suitable “original” (if insisted upon) can usually be made by printing off a file and signing it. Whether this is necessary at all – other than for “ceremonial” purposes – is questionable.

It comes down to the perceived comfort of having a piece paper – something physical that can be put into a folder and filed in a filing cabinet. But the reality is that digital documents and digital signatures are capable of achieving a much higher level of security than a signature.

As my last post was on the subject of company records, I should mention that the NZ Companies Office is far and away the best company registry website around. The main search pages may be getting slightly dated now, but are still great and gradually being updated, with a major overhaul apparently planned (IIRC from the “roadshow” they did last year).

One very simple thing at the top of my wishlist: ditch the pop-up results frames! Allow us to open results in new tabs (without post-backs)! As you can see I don’t ask much. Also the “watchlist” notification function which I understand is planned will be VERY useful. And while I’m making a list, a historical shareholders function would be useful, albeit of limited use because (unlike changing directors) not every shareholding change is required to be filed.

Best of all (from a tech-perspective) it allows XML web service integration for free, which is brilliant (I have used it, and still do, on several projects, even gratis developer tech support is provided [if you ask nicely]) albeit with the requirement that a confidentiality agreement is signed regarding the XML schema. I don’t quite see why that is necessary (not that I’m at liberty to discuss it…) but perhaps the Open New Zealand initiative will take up the matter. They have also been very active with new media (e.g. on Facebook and Twitter) which is great to see and a model for other agencies.

By contrast, the UK, Australian, and Hong Kong equivalents are terrible (in ascending order of awfulness). The information is there, you just need to pay for it and/or go via a third party. In 2007 I tried talking to a Hong Kong official about automated web-service access to the Hong Kong register… well, the fact their homepage still refers to IE5.0 and Netscape 6.0 gives an idea of the responses I got.

Kudos to the NZ Companies Office, which should be a model for other public sector registers.

I’m sure the story about the unfortunate “fudge this” comment accidentally left in a set of company accounts is familiar to many lawyers, especially those involved in litigation (or M&A, when rounds of revised documents are flying through the small hours).

This latest example is embarrasing but really not too bad. The real mistake was using the word “fudge”. Anyone who has helped put together (or dissect) accounts and other reporting data knows that occasionally something does need to be a “best estimate” (a more advisable term).

In litigation a lawyer’s job often involves poring over documents, looking for mistakes, inconsistencies, and things that are generally helpful to your client’s case. Much money and sweat is expended on discovery and hoping to find the elusive smoking gun. It does happen, but in my experience unless it’s an outright admission of guilt/breach/bad faith/etc (or something similar), it’s usually not as damaging as it might at first seem.

It’s more productive to focus on the links between documents and “data mine” what you already have (or can get easily). Many lawyers on the other side of major disputes I’ve been involved in have done a terrible job (apparently, based on the results) of data mining their material.

But in terms of what’s in the documents themselves, far better (or worse) than a simple comment, can be tracked changes left in a document. These are great because they record the exact changes made to specific words, the user who made the change and the time. I recently had a situation where this was especially useful in proving certain negotiations between a first and second draft of a contract. There are stories of clients (and lawyers) being caught out by some unmerged tracked changes, or Word’s less-understood “versioning” feature.

The upcoming changes to the District Court Rules make the old discovery process obsolete. It is no longer necessary for the parties to disclose all relevant, non-privileged material. But thanks to email, litigants tend to have far more of the “other side’s” documents than ever before. And thanks to electronic documents, tracked changes and the like, there is more data in the documents than ever before. It will be interesting to see how the new DC discovery process goes, and whether it results in litigants focussing more on data mining what they have, in preference to wrangling over what they don’t.