By: Dr Tristan Jenkinson

The Need for Change

Cases such as Nichia, Digicel and Earles (Discussed in Part Four) fuelled concerns that parties were not sufficiently addressing the requirements of electronic disclosure.

Some saw this to be due, in part, to the failure of parties to appreciate and utilise the newly inserted paragraph 2A within the Civil Procedure Rules (CPR) Practice Direction (PD) 31. Simon Brown alluded to this in his judgment in Earles:

“It might be contended that CPR 31PD 2A and electronic disclosure are little known or practised outside the Admiralty and Commercial Court”.

Lord Justice Jackson, would later comment, more bluntly, in his preliminary report of May 2009 (more on this shortly):

“The steps required by section 2A of the PD have not become widespread practices or expectations. The PD is often ignored. This may be because parties are unaware of it. Alternatively, the parties may be apprehensive about electronic disclosure or its cost”.

Partly due to the perceived failure of the insertion of paragraph 2A to fully address electronic disclosure, a working group was set up, chaired by Senior Master Whitaker (as he then was), to develop a new practice direction specifically focussed on this area.

There were also concerns that the cost of litigation was continuing to increase, despite the changes made by the Woolf Reforms. On this basis, Lord Justice Jackson was asked to prepare a report focussed on reducing the costs of litigation.

In addition, due to the expensive collapse of a number of cases in 2005, a working group was put together to look at improvements to procedures in the Commercial Court.

This article looks at these three interlinked streams and the impact that they had on electronic disclosure.

The Commercial Court Long Trials Working Party (December 2007)

In 2005, major cases in the Commercial Court relating to Equitable Life and BCCI collapsed.

Equitable Life started a £2 billion action against their auditors (Ernst & Young) and a claim of £3.3 billion against former directors, both of which were later abandoned (see for example this article in the Financial Times). The legal costs of the two abandoned cases was estimated to be £45 million.

BCCI (The Bank of Credit and Commerce International) was shut down by the Bank of England in 1991 following allegations of fraud, as well as previous fines for money laundering and related convictions, including that of Abbas Gokal, who was jailed for what was reported at the time to be the “biggest ever banking fraud”.

The liquidators for BCCI, Deloitte, subsequently made a claim against the Bank of England for £1 billion alleging that the Bank (in its role as regulator) had acted with “malicious recklessness” (see for example the Guardian article here). Deloitte dropped the litigation in 2005, after the judge stated that the case was not in the interest of creditors. As a result, Deloitte had to pay the legal costs of the Bank of England, as well as their own – which, combined, amounted to over £130 million (as reported by the BBC here).

These cases were seen as costly mistakes, demonstrating issues within the Commercial Court procedures in respect of large and complex cases. One often referenced point was the 119-day speech (thought to be the longest in legal history) delivered by the Bank of England’s QC, Nicholas Stadlen, in the BCCI case, leading the court through 125 lever-arch files of content (discussed here).

These cases led directly to The Commercial Court Long Trials Working Party being set up in January 2007, in the working party’s own words, “to consider all aspects concerning the management of heavy and complex litigation in the Commercial Court”. The party produced a report and recommendations in December 2007 (a copy of which can be found here).

While the report substantively covers judicial case management and recommends limits on statements (hopefully eliminating 119-day speeches), the report also covers the issue of disclosure, identifying that long and complex statements of case could lead to difficulties with disclosure, and reporting the concern, at Paragraph 6, that:

“… particularly in large scale litigation, the administrative burden and therefore cost of disclosure has grown disproportionately to its benefits”.

The Working Party identified that, in many cases, the extent of disclosure proposed by the parties was only being demonstrated at the point of exchange of lists of documents (or disclosure itself). The Working Party stated that this could result in large numbers of documents being produced automatically which were not relevant:

“All too frequently large numbers of files are disclosed, produced at the trial and then ignored. This is wasteful and cannot be permitted”.

The Working Party also explain that alternatively, relevant classes of information may not be uncovered by the disclosure proposed – leading them to suggest that a more surgical approach was required.

The fact that the CPR (under 31.5 and 31.12) already allowed for alternative orders of disclosure, if appropriate, was highlighted and the Working Party stated:

“… this power to make more supple orders for disclosure, if necessary issue by issue, must be utilised more often by the court”.

To this end, the Working Party also recommended that a List of Issues be agreed between the parties (or ruled upon) at the Case Management Conference (CMC) dealing with the issue of disclosure, and also suggested a “Disclosure Schedule” which was aimed to be treated as a “Shopping List” for disclosure.

An example disclosure schedule was suggested in the appendices. The appendix sets out each separate issue from the List of Issues, for each issue the claimants request standard disclosure (or an alternative disclosure order, with their reasons) and supply an indication of the classes of documents expected (where possible). The defendants then respond and the order made is then recorded.

Similarly, the Working Party suggested that it may be helpful for a sample “Disclosure Request” form to be developed, allowing parties to outline what they planned to provide and receive.

Whilst a step away from the disclosure process, the Working Party also addressed the use of technology in the courtroom and the scope for “paperless” litigation, stating that “the court must consider at an early stage in a case the scope for using IT, particularly at the trial and particularly in long and complex cases”. They added that a new working party should be set up to develop proposals on how future trials could become paperless, with a specific focus on the new court buildings being built at the time on Fetter Lane (now the Rolls Building).

The recommendations made by the Working Party were integrated into the Admiralty and Commercial Courts Guide (8th edition, 2009).

From Woolf to Jackson

Woolf’s “Access to Justice” reforms of 1998 culminated in the implementation of the Civil Procedure Rules (see Part Two). The so-called Woolf Reforms were considered to be a success, at least in specific areas. Notable successes included an increase in the number of settlements prior to trial, a reduction in the time it took to take a case from issue of claim to trial, and the introduction of new procedure for settlement offers (Part 36).

However, the Woolf Reforms also had a number of perceived failures, including not having the expected impact on the cost of litigation – as Lord Justice Jackson would come to comment, after the implementation of Lord Woolf’s reforms, “the costs of civil justice continued to rise”.

In November 2008, Lord Justice Jackson was appointed by Sir Anthony Clark (Master of the Rolls) “to lead a fundamental review into the costs of civil litigation”. Jackson was instructed to carry out a review and make recommendations “in order to promote access to justice at proportionate cost”.

Jackson’s work included a preliminary report, issued in May 2009 (in two volumes), and a final report issued in December 2009. The recommendations would form what are known as the Jackson Reforms.

Jackson’s Interim Report (May 2009)

The interim report (published in May 2009) spanned two volumes (Volume 1 here and Volume 2 here), totaling almost 700 pages.

Comments with regard to electronic disclosure were focussed on in Chapter 40, which can be found at the start of the second volume, while disclosure in general was covered in Chapter 41.

Chapter 40 – E-Disclosure

Given Jackson’s focus on costs, it is perhaps unsurprising to see him remark that:

“The expense of disclosure, electronic or traditional, has long been a source of concern”

and

“… the sheer volume of potentially disclosable electronic material which is now generated in the course of a project means that disclosure is now becoming an even more expensive process than formerly”.

 Jackson covers electronic disclosure in some detail, laying out the implementation of paragraph 2A (as well as discussing its lack of use – see above).

The report makes a number of suggestions on potential methods to reduce costs, such as discussions (and preferably agreement between parties) at an early juncture – to avoid the issues seen in the Digicel case.

Other suggestions include the use of the disclosure questionnaire (to be discussed shortly), comments on the format of disclosure, and the recommendation that parties obtain estimates on the potential costs of electronic disclosure early in the process.

Jackson also highlights the lack of specific education on electronic disclosure for the legal profession:

“It is understood that there is currently no inclusion of e-disclosure in the professional courses to train solicitors or barristers. There is also no generally available education for judges on the subject. The lack of effective training for all involved in e-disclosure was perhaps the most frequent complaint raised during the meetings with professionals in connection with this chapter. There is clearly a need for better education of all participants in e-disclosure, so that they are aware of the most effective tools available for e-disclosure and how they should be used.”

In conclusion, Jackson remarks:

“In every substantial case where documentation is held electronically, consideration must be given to the problems involved with and the costs of e-disclosure. The electronic material may be so extensive that it is impracticable to print all documents out and then to proceed with conventional disclosure. In that event there is no alternative to e-disclosure.”

Chapter 41 – Disclosure

Jackson discusses the practicalities of disclosure in some detail, covering much of how CPR Part 31 is used and interpreted. Again Jackson raises the growth and expense of electronic disclosure, with a focus on early discussions becoming a theme:

“Further, and perhaps more importantly, the parties do not enter into meaningful dialogue at an early enough stage. A large amount of costs can therefore be wasted if the disclosure exercise is not done with sufficient forethought, Digicel being a prime example.”

Jackson lists a number of “Perceived Difficulties” with the disclosure process as it then was, which are worth reading – their titles are listed below to give an indication of the content:

• Growth of electronic communications
• Consequential costs
• The obligation to search for and identify disclosable documents remains ostensibly the same as the pre-1999 procedure
• Duplicative disclosure
• Lack of co-operation
• Failure to follow agreed procedures
• Specific disclosure applications
• In some cases, lack of adequate and continuous case management by an informed Master/Judge

Jackson then discusses ten proposals for consideration as to potential changes to the approach to disclosure – I will cover these when discussing the final report.

As part of the efforts in relation to addressing the issues in disclosure, a working group was set up to review one of the ten proposals – the so called “menu option”, whereby there would be no default position on disclosure (i.e. standard disclosure would be abolished) and for each case the parties would discuss at the first CMC how disclosure would be approached.

The Questionnaire

Also covered in the interim report is the work of Senior Master Whitaker’s working party (at 40.2.10):

“There is currently a working party, led by Senior Master Whitaker, drafting a new practice direction and a questionnaire for parties to litigation to complete. It is anticipated that these will come into effect in about October 2009.”

Jackson explains that the questionnaire is designed to have a dual purpose. Firstly, to assist parties with scoping and reaching agreement as to the extent of a “reasonable search” and secondly to provide information on the underlying data infrastructure, should any applications in respect of disclosure later be required.

Goodale and the Electronic Documents Questionnaire (November 2009)

As Jackson covered in his interim report, in addition to drafting a new practice direction to advise specifically on electronic disclosure, Senior Master Whitaker’s working party were also developing a questionnaire for parties to complete with respect to the data that they held. It appears that the working party took on comments made by the Long Trails Working Party and their comments with regard to their “Disclosure Schedule” and “Disclosure Request Form”.

Prior to the acceptance of the draft practice direction (by the Civil Procedure Rule Committee), in November 2009 Senior Master Whitaker included a copy of the ESI Questionnaire (as it was then called) in his judgment in the matter of Goodale v Ministry of Justice (a copy of which can be found on Bailii here).

The judgment is an important one in the context of the history of electronic disclosure, not just because it contains a copy of the questionnaire itself (Prior to PD31B), but because of the commentary on electronic disclosure, and the case management demonstrated by Whitaker, regarding which Whitaker himself says:

“By exercising sensible case management at this point, the court may avoid putting the parties to an expensive application for specific disclosure of other documents, at a later stage of the proceedings”.

Whitaker starts the order with a discussion of the problem of electronic disclosure, echoing points made by Jackson about the increase in volume of electronically stored information (ESI) and the difficulties with electronic data.

Whitaker explains:

“Disclosure is a tripartite exercise of search, disclosure, and inspection, and the problem… is often for a party to gauge the scope of a reasonable search… how the parties and (if disputed) the court determines what the scope of that search of ESI should be, how it is going to be made proportionate and how it is going to be carried out correctly first time”

and

“An ill considered search for ESI may produce far too few documents for review but more likely will produce such volumes that human review of every document is neither proportionate nor practical. Because of this a substantial industry has developed to handle the identification, collection, reduction and organisation for review of ESI. Often, this is carried out electronically, with technology aiding and supplementing human review.”

The details of the case itself are not particularly of relevance. Suffice to say that the claimants were looking for information that they believed would support their case, the majority (if not all) of which would be held by the defendant, specifically by four identified custodians.

Whitaker stated “[t]here should be disclosure of electronically stored information. It is clear that documents created by these four witnesses exist which are likely to support the claimants’ case and damage the defendant’s. The only question is how we go about finding them.”

He then ordered that the defendants should complete the ESI Questionnaire, stating:

“The parties should consider their obligations under PD 31 2A to “… discuss any issues that may arise regarding searches for and the preservation of electronic documents. This may involve the parties providing information about the categories of electronic documents within their control, the computer systems, electronic devices and media on which any relevant documents may be held, the storage systems maintained by the parties and their document retention policies.” and the defendants must also complete the questionnaire in the schedule below as a means of providing the claimant and the court with the necessary information in a structured manner, should there be any further application for directions on disclosure.”

The ESI Questionnaire as it appears in Goodale would eventually become the “Electronic Documents Questionnaire” or EDQ, which appears as a schedule to the completed Practice Direction 31B (here).

The EDQ document itself is not complex and, despite the potential that its days are numbered (potentially to be replaced by the DRD as part of the New Disclosure Rules if they are more fully rolled out), it remains a key document relating to electronic disclosure and its usage in the Courts of England and Wales.

The Final Jackson Report (December 2009)

Jackson’s final report was published in December 2009, you can find a copy of it here. Disclosure, and electronic disclosure are covered in Chapter 37.

The Options for Disclosure Reform

The options for disclosure reform that Jackson raised in his interim report are revisited here. Jackson summarises them as below:

1. Maintain the current position with standard disclosure remaining the default disclosure order.
2. Abolish standard disclosure and limit disclosure to documents relied upon, with the ability to seek specific disclosure.
3. Introduce “issues based” disclosure akin to the approach being trialled by the Commercial Court.
4. Revert to the old system of discovery with the “trail of enquiry” test.
5. No default position with the parties and court being required to consider the most appropriate process for disclosure at the first case management conference (“CMC”). This option has generally been referred to as the “menu” option.
6. More rigorous case management by the court, including greater use of sanctions against parties who provide disclosure in a haphazard manner, or late, or ordering the parties to agree a constructive process and scope.
7. Use of experienced lawyers as disclosure assessors in “heavy” cases to identify which categories of documents merit disclosure.
8. Restrict the number of specific disclosure applications and/or raise the standard to be met.
9. Reverse the burden of proof in specific disclosure applications, with the costs of the disclosure exercise being met by the requesting party unless documents of real value emerge.
10. Allocate a single judge at the outset of substantial cases to enable him or her to become more familiar with the facts and procedural history.

Though he identifies ten approaches, Jackson did not recommend any major changes in approach, save for a recommendation with regard to option (e) – the “menu option”. Part of the lack of recommendations made by Jackson, are because of the work performed by Senior Master Whitaker’s working party.

The Senior Master’s Working Party and Draft Practice Direction

Lord Justice Jackson refers to the Working Party and the draft Practice Direction, highlighting some of the main points of the draft.

Significantly, Jackson states:

“In my view, the substance of this practice direction is excellent and it makes appropriate provision for e-disclosure. On the assumption that this practice direction will be approved in substantially its present form by the Rule Committee, I do not make any recommendation for procedural reform in relation to e-disclosure.”

Understanding

One of the areas that Jackson highlights is that of understanding and training:

“The important point which has been stressed by many respondents is that judges, solicitors and counsel need to acquire (or have access to someone who has) a much more detailed understanding of the technology available and how it functions. Both practitioners and judges need such an understanding, so that the court can manage the litigation properly and keep the costs of e-disclosure within sensible bounds.” …“lawyers need both education and training in respect of e-disclosure. They need education in the broad capabilities of the ever developing software systems and in the variables which make one software system different from another. They also need training in how to make the best use of whatever software systems are adopted.”

Jackson subsequently recommended that electronic disclosure should “form a substantial part of (a) Continuing Professional Development (“CPD”) for solicitors and barristers who will have to deal with e-disclosure in practice and (b) the training of judges who will have to deal with e-disclosure on the bench.”

The Menu Option

Lord Justice Jackson discusses that a clear majority of those in the industry (who took part in the discussion phase) saw a need for a change of approach, specifically for large commercial cases, and that the support was for the menu option, whereby no default position on disclosure would exist, and the most appropriate approach to disclosure for these cases would be decided at the Case Management Conference.

As discussed above, the interim report assigned a working party specifically to look into the menu option and how this might work. That working party (which differs to that head up by Senior Master Whittaker) drafted a new rule for CPR Part 31 – rule 31.5A.

Jackson’s report provides a copy of the draft rule, which was aimed at Disclosure in “a substantive case”, though Jackson himself admitted that “[t]he draft rule will require revision”. This was due, at least in part, to inconsistencies with the drafting of the new rule and the drafting of the new Practice Direction (by Senior Master Whitaker’s working group).

Final Recommendations

The two main recommendations made by Jackson in relation to electronic disclosure are: the above change to insert a new rule, 31.5A into the CPR, and, secondly, that electronic disclosure should be a major part of Continuing Professional Development for solicitors and barristers who work on cases involving electronic disclosure in practice, as well as relevant training for judges who would have to deal with the subject in court.

Practice Direction 31B (October 2010)

As discussed above, a working party, led by Senior Master Whittaker, involving many industry experts and practitioners, was tasked with drafting a new practice direction, with a specific focus on electronic disclosure.

The Practice Direction itself states its purpose to be “to encourage and assist the parties to reach agreement in relation to the disclosure of Electronic Documents in a proportionate and cost-effective manner”.

The draft was widely held as a success, gaining praise from Lord Justice Jackson who, as discussed above, declined to effect any major procedural changes due to the content of the new Practice Direction.

Implementation

The draft was not quickly accepted for publication, however. It was originally expected that the draft would be accepted in October 2009.

When Lord Justice Jackson published his final report in December 2009 he explained that:

“At the time of writing (December 2009) the Rule Committee is considering and refining the draft. The intention is that the practice direction will be finalised soon and will be brought into effect in April 2010.”

The delays were due to debate within the Civil Procedure Rule Committee which reportedly viewed the draft received as overly prescriptive. The debates led to a further working party being formed to investigate if any new guidance should be implemented at all.

One of the points for debate was the EDQ.  As discussed above, the EDQ was to be included as part of the new Practice Direction. In the original drafts, put together by Master Whitaker’s working party, the aim was for the questionnaire to be compulsory in at least some cases (see for instance https://hsfnotes.com/litigation/2010/09/16/rules-relation-disclosure-electronic-documents-high-court-proceedings/ and/or https://www.scl.org/articles/1768-disclosure-the-proposed-rule-changes ). In the final, published version, the Practice Direction stated that “In some cases the parties may find it helpful to exchange the Electronic Documents Questionnaire”, though the court could still order parties to do so.

Practice Direction 31B was implemented in October 2010, and the existing Practice Direction 31 was renamed Practice Direction 31A.

Preservation of Documents

As discussed in Part 4, the judgment in the Earles case identified that there was no duty to preserve documents prior to the commencement of proceedings. The guidance changed with the implementation of Practice Direction 31B, which specifically stated at Paragraph 7 that as soon as litigation is contemplated, legal representatives must notify their clients of the need to preserve documents which may need to be disclosed. The paragraph explains that this includes documents “which would otherwise be deleted in accordance with a document retention policy or otherwise deleted in the ordinary course of business”.

Early Discussion and Cooperation

At paragraph 8, the Practice Direction lays out that there must be discussions about technology and the management of electronic disclosure prior to the first CMC. Paragraph 9 extends this, stating that for some cases (such as complex cases) discussions of many factors relating to the disclosure process may be appropriate, prior even to proceedings being commenced.

To assist with these discussions, the finalised Questionnaire (which appeared in draft in Goodale) appears, with the new “Electronic Documents Questionnaire” moniker.

Reasonable Search Guidance

The Practice Direction contains some guidance information regarding the reasonable search that must be carried out, one key point to this is explicitly identifying the accessibility of documents as a consideration.

Keywords and Automated Searches

While it is identified that keywords may be reasonable, it is flagged that using keywords, or other automated search techniques, on their own could lead to failures, recommending that they should be combined with other techniques, such as manually reviewing specific categories, or taking other steps to justify the data set identified for production.

Form of Production

The form of production is covered, with the Practice Direction stating that:

“Save where otherwise agreed or ordered, electronic copies of disclosed documents should be provided in their Native Format, in a manner which preserves Metadata relating to the date of creation of each document.”

This was a point discussed in a previous article on the eDiscovery Channel in an article entitled Potential Drawbacks of Non-Native Disclosure.

Overall

Like the EDQ, the Practice Direction is not a complex document. It covers a number of key points and acts as one of the best pieces of legal guidance on electronic disclosure. It should be recommended reading for anyone in the industry.

Update to CPR 31.5 (April 2013) “The Menu Option”

In the April 2013 updates to the CPR, a final version of the drafted “menu option” rule 31.5A was added to CPR Part 31. It was actually inserted as 31.5, entirely replacing the original rule 31.5 (which simply stated that an order to give disclosure meant standard disclosure, that the court (or the parties, by agreement) could dispense or limit standard disclosure. A copy of the original Rule 31.5 can be found here.

The updated 31.5 now included the “menu option” which had been under development by the working group under Lord Justice Jackson.

The menu option dispensed with the concept of automatic standard disclosure, and placed an obligation on the parties to supply a large amount of information regarding the potential scope of disclosure. Parties now had to supply, not less than 14 days before the first Case Management Conference a report which:

• Describes briefly what documents exist or may exist that are or may be relevant to the matters in issue in the case
• Describes where and with whom those documents are or may be located
• On the case of electronic documents, describes how those documents are stored
• Estimates the broad range of costs that could be involved in giving standard disclosure in the case, including the costs of searching for and disclosing any electronically stored documents
• States which direction for disclosure is being sought

In particular, requests could be made for:

• an order dispensing with disclosure
• an order that a party disclose the documents on which it relies, and at the same time request any specific disclosure it requires from any other party
• an order that directs, where practicable, the disclosure to be given by each party on an issue by issue basis
• an order that each party disclose any documents which it is reasonable to suppose may contain information which enables that party to advance its own case or to damage that of any other party, or which leads to an enquiry which has either of those consequences
• an order that a party give standard disclosure
• any other order in relation to disclosure that the court considers appropriate

Directions could also be requested in relation to how electronic disclosure would be undertaken, and, in addition, CPR 31.5(9) specifically relates back to Practice Direction 31B, affirming that this will apply in relation to electronic documents.

Summary

The various reports, recommendations and working parties resulted in the creation of the new Practice Direction which was specifically written in relation to electronic disclosure, a questionnaire to help guide the disclosure process, and a Civil Procedure Rule updated to sit in line with these and offer specific alternatives to standard disclosure.

Driving much of this were the concerns on the rising costs of the disclosure process – What could possibly go wrong?

Costs continued to increase.

In May 2016 Sir Terence Etherton (who become Master of the Rolls shortly afterwards in October 2016) established a working group headed by Dame Elizabeth Gloster to investigate the “widespread concerns expressed by court users and the profession regarding the perceived excessive costs, scale and complexity of disclosure”.

The work of this working group will be discussed in Part Six.