New rules in relation to the disclosure of electronic documents in High Court proceedings

A new Practice Direction (PD) and Electronic Documents Questionnaire will apply to the disclosure of electronic documents in multi-track cases started in the High Court on or after 1 October 2010. The new PD and questionnaire have been developed out of a concern that the existing provisions relating to e-disclosure (at paragraph 2A of existing Practice Direction 31 of the Civil Procedure Rules (CPR)) are not effective in forcing parties to litigation, and their lawyers, to address e-disclosure issues properly at the outset of the case.

Recent cases which have highlighted this concern include Earles v Barclays Bank [2009] EWHC 2500 where, although the defendant bank was successful, its costs were reduced by 50% because the court found the conduct of its e-disclosure "fell far below the standards to be expected of those practicing in the civil courts." For more information on Earles and other recent cases in this area, see post.

The new PD and questionnaire have been the subject of lengthy drafting and debate. A previous draft PD envisaged parties completing and exchanging the questionnaire at a very early stage in all multi-track cases, except where otherwise directed by the court or agreed by the parties. Concerns were expressed, however, that the proposed approach was overly-prescriptive. A further working group was formed which concluded that whilst there was a need for detailed rules, the emphasis in the PD should be on getting the parties to agree the scope and extent of e-disclosure, using the questionnaire as a prompt or checklist where appropriate. As such, the questionnaire will now be adopted "if [the parties] find it helpful" (paragraph 10), or if the court orders that all or part of it should be completed by the parties should they fail to reach agreement regarding e-disclosure issues (paragraph 15).

Key areas to note in respect of the new PD and questionnaire are:

• The emphasis on the need to preserve electronic documents as soon as litigation is contemplated

Question 14 of the questionnaire asks each party whether it has given an instruction to preserve electronic documents and if so, when.  It will therefore be important to be able to demonstrate that a litigation hold was put in place at an early stage.  To ensure clients are aware of their obligations, paragraph 7 of the PD provides that as soon as litigation is contemplated the parties' legal representatives must notify their clients of the need to preserve disclosable documents, including electronic documents, which would otherwise be deleted in accordance with a document retention policy or in the ordinary course of business.  In practice, in house lawyers will need to give careful consideration at an early stage with their external advisers (where instructed) as to the location and extent of potentially relevant electronic documents and give the necessary instructions to preserve them.  This may extend beyond documents on individuals PCs to, for example, back up tapes for relevant periods.

The English courts currently draw a distinction between the failure to preserve prior to the commencement of proceedings, and after such commencement. Broadly, unless there is evidence of intentional destruction of documents, a failure to preserve before proceedings are issued is likely to result in adverse cost consequences, rather than adverse evidential inferences being drawn (which may be the position after proceedings have been issued).

• The importance of discussing e-disclosure issues with the other parties at an early stage and attempting to reach agreement

The obligation to discuss e-disclosure issues with the other side prior to the first CMC is now more prescriptive (paragraphs 8 and 9). For example, there is an obligation to discuss the use of technology in the management of electronic documents including the use of agreed keyword searches (ie automated electronic searches to identify relevant documents) and data sampling (ie representative individual documents from a class), as well as methods of identifying privileged documents. The parties must before the first CMC submit to the court a summary of the matters on which they agree/disagree in relation to e-disclosure. If no agreement is likely, the court will intervene and make such orders as it thinks appropriate.

There will also be two additional questions in the Allocation Questionnaire in cases likely to be allocated to the multi-track: (i) "Have you reached agreement ... about the scope and extent of disclosure of electronic documents on each side? If not, is such an agreement likely?" and (ii) "[If not] what are the issues about disclosure of electronic documents which the court needs to address, and should they be dealt with at the CMC or at a separate hearing." This is intended to force the parties to comply with the obligation to discuss in the PD

• The level of detailed information required by the questionnaire

The questionnaire appended to the PD deals in some detail with the technical issues arising in relation to the extent and methodology of a reasonable search (including date ranges, custodians and types of electronic documents); potential problems regarding accessibility and preservation of electronic documents; inspection by electronic exchanges; and finally, expectations of the other side's e-disclosure. The questionnaire, when exchanged with the other side, must be verified by a statement of truth. Use of the questionnaire is encouraged in the PD to narrow the issues between the parties. Its completion may also be ordered by the court. Although exchange of the questionnaire will not take place in every case, it may be important for parties to have regard to its contents, both as a checklist of relevant considerations and so as to be in a position to complete it if ordered to do so by the court.  This is particularly important given the statement of truth which will likely fall to in house lawyers to sign in many cases.

Comment

The previous rules were intended to facilitate co-operation, however, they did not always achieve this. The success of the new PD and questionnaire will depend ultimately on the profession adopting them and the judiciary enforcing them in an appropriate way.

The PD and questionnaire assume a degree of technical knowledge and we believe that improved learning amongst the judiciary and practitioners in relation to e-disclosure will be necessary to ensure success. Without this, there is a danger either that some parties may pay lip service to the PD/questionnaire because they do not understand it; or disproportionate time and costs will be incurred in complying with it, further turning e-disclosure into a 'side' industry.

Some potential uncertainty also remains as to the scope of the new rules. It is proposed that the PD replaces the current PD31 2A.2-2A.5 guidance on electronic disclosure. This leaves a potential lacuna in relation to (a) multi-track cases commenced pre-1 October 2010 (which will be subject to the old guidance yet this guidance will have been removed); and (b) non-multi track cases, where there will be no guidance on electronic disclosure (beyond the requirement to search for electronic documents contained in the commentary to CPR 31.7). It is, in our view, not unlikely that fast track cases (claims up to £25,000) will involve the search for and disclosure of electronic documents. Retaining guidance in such cases, may, in our view, have been useful. The court can, however, make bespoke (e-disclosure) directions in such cases, and are free to adopt the PD in any cases, including those outside the multi-track.

As regards the questionnaire, we consider it will serve as a useful starting point from which to assess the reasonableness and proportionality of the search required, but it should not be seen as a substitute for thorough consideration of the (potentially unique) e-disclosure requirements which arise in each case. Further, formal completion and exchange of the questionnaire without sufficient consideration of whether it is actually appropriate in a particular case, may lead to unnecessary and avoidable costs.