eDiscovery in a small matter

Here are slides from my presentation at Law Tech NZ 2015 held in Auckland on 18 March 2015.  My presentation was on eDiscovery in a small matter, and included some statistics from LawFlow. The term “small matter” is perhaps something of a red-herring, as the High Court Rules and principles for discovery are the same for all cases big and small (subject to orders). But for practical reasons including the all-important touchstone of proportionality, small discoveries often require a more tightly-focused, pragmatic approach.

Managing eDiscovery in New Zealand

Update 25 Feb 2013: All speaker slides are now available at this link.

Last week I presented at the Ernst & Young / E-Discovery Consulting “Managing eDiscovery in New Zealand” conference in Auckland.

The slides for my presentation, “Document Review: Getting, preparing & reviewing data under the new High Court Discovery Rules” are here:

Judge David Harvey gave the keynote presentation, and has also put up his slides:

Handling confidential documents in discovery

By its nature, discovery often involves disclosing confidential documents, or documents containing confidential information.

Confidentiality is usually not grounds for withholding (i.e. not disclosing) a discoverable document. Documents can be withheld on the grounds of privilege (either as codified in the Evidence Act 2006, or the residual common law privileges) or irrelevance, but there is no privilege for “commercial sensitivity” or other such aspects of confidentiality (see ss 68-70 of the Evidence Act for other grounds).

But this does not mean that confidential documents need to be handed over without restriction.

The starting point is relevance, under the “adverse documents” test. If a document is not required to be discovered, then issues of handling confidential information in that document should not arise.

If a document is discoverable, then High Court Rule 8.15(2)(f) permits the producing party to propose “restrictions … to protect the claimed confidentiality of any document”. Rule 8.28(3) then permits the producing party to produce those documents subject to the proposed restrictions. If the receiving parties wish to challenge the proposed restrictions, they may do so pursuant to Rule 8.25.

There are several important points to note:

  1. The confidential documents must be listed as confidential documents in the affidavit of documents (usually ‘part 3’).
  2. The proposed restrictions on the confidential documents must be stated in the affidavit of documents itself.
  3. The producing party is free, within reason, to propose whatever restrictions they consider appropriate, though this should be read subject to the duty to co-operate.
  4. It is up to the receiving party to challenge the restrictions, if they wish. This will usually require an interlocutory application or a memorandum seeking directions (a party that inappropriately claimed confidentiality, or proposed inappropriate conditions, would likely have to pay costs).

What restrictions can be applied?

While rule 8.30(4) limits the use of discovered documents to the purposes of the proceeding only, and prevents extra-judicial disclosure, the producing party still may wish protect the confidentiality of certain information.

The producing party is at liberty to propose appropriate restrictions. Common restrictions include:

  • Redacting documents. While relevant information cannot be withheld on the grounds of confidentiality, non-relevant confidential information could be redacted, making the resulting document discoverable with redactions (“DWR”; the same can apply to privileged documents). For example, a document may be commercially sensitive because it contains sales figures or name of other customers. If sales figures or customer names are not relevant to the dispute, a redacted version of the document omitting that information could be provided (as a Part 1 document).
  • Limiting inspection. Confidential documents are sometimes provided on an “attorney’s eyes only” basis that limits inspection to the receiving party’s lawyers and experts only. This is usually supported by an undertaking from the receiving party’s solicitor.
  • A combination of the above, where redacted versions are made available to the receiving party themselves (without restrictions), and the full versions are available for the receiving party’s lawyers (with undertakings) to inspect in order to confirm the legitimacy of the redactions.

Common sense should prevail

Care should be taken not to claim confidentiality over-zealously. Rule 8.30(4) provides a reasonably robust level of protection to all discovery documents, and it is not necessary (nor appropriate) to claim confidentiality across tracts of documents without an “elevated” need to do so. A robust case should be made.

In practice, most discovery issues of this nature can and should be resolved between the parties on a common sense basis – which is supported to some extent by the duty to co-operate that the new rules impose.

LawFlow – increased project storage

LawFlow has increased the storage allowances for projects at no extra cost. The growth in the discovery document load has really increased massively in recent years, and really highlights the need for effective management tools.

E-discovery often equals big data. Most of the large files in a discovery are scanned PDFs. In some cases, these are hundreds of pages long and over 100MB each. If the original electronic files can be used, storage requirements will usually be much lower compared to a printed-and-scanned document.

 

 

Application of new discovery rules

The new High Court Rules (requiring electronic discovery and changing the relevance test, inter alia) came into force in February this year. Somewhat unusually, though presumably by design, they contained no transitional provisions. This has led to contention in some proceedings instigated prior to February 2012 over which rules apply.

The position appears to be as follows:

  • The previous rules apply to discovery being undertaken pursuant to orders in place prior to 1 February 2012: Premier Events Group Limited v Beattie [2012] NZHC 1025.
  • Unless the Court orders otherwise, the new rules applies to discovery ordered after the commencement of the new rules on 1 February 2012, regardless of when the proceeding was commenced: Karam v Fairfax New Zealand Ltd [2012] NZHC 887, paragraphs 135-136.
  • Where discovery has been completed but no inspection has occurred, the new e-discovery rules relating to inspection, including the requirement of electronic exchange, will apply: McGechan on Procedure, HRPt8Subpt1.03.

LawFlow blog: http://www.lawflow.co.nz/about/blog/application-of-new-discovery-rules

Tailored discovery under the new High Court Rules

A recent High Court judgment of Justice Asher includes some useful comments on tailored discovery and proportionality under the 2012 High Court Rules. While the decisions in Commerce Commission v Cathay Pacific Airways Ltd [2012] NZHC 726 is relatively straightforward, the comments carry weight because Justice Asher was on the Rules Committee that forumulated the new requirements.

The starting point in such a consideration of appropriate tailored discovery orders must be an analysis of the issues. Discovery categories will reflect the issues and will only be ordered for the discovery of documents that are relevant to those issues. Except in exceptional circumstances, these issues will be discernible from a review of the pleadings. Discovery orders that are essentially of a “fishing” nature are not part of tailored discovery. Orders will not be granted where the categories do not relate to a pleaded relevant issue, but rather a non-pleaded issue which might be pleaded should discovery reveal documents that support such a pleading.

Which highlights the importance of getting the pleadings right. It is surprising how much issues can “shift” from those pleaded, especially if insufficient analysis of available documents (usually only your client’s documents, pre-discovery) is carried out before pleading.

(I add that it is also surprising how, occassionally, some practitioners don’t seem overly perturbed by the growing divergence, even to the point of conflict, between their pleadings and their asserted “key issues”!)

Of course, pleadings can be amended, and such amendment is commonplace (in Cathay the Commission was on the 5th version of its statement of claim).

On proportionality, His Honour says:

To determine the proportionality arguments in relation to tailored discovery of particular categories it is necessary to consider the chances of finding relevant documents in the discovery exercise and their degree of relevance. This should then be balanced against the cost of carrying out that discovery process. Broader considerations such as the amount at issue, the resources of the parties, and delay to the proceedings may also be relevant…

It is notable that it is not so much the amount at issue or the resources of the parties that are of primary relevance (though they are still factors), but balancing of the chances of finding relevant documents verus the cost of doing so. As His Honour clearly summarises:

In a decision whether to order discovery under the particular category it is necessary to measure the likely return of relevant documents against the cost of the exercise. If highly relevant documents may be revealed, then a greater cost can be justified.