It’s the strategy, stupid!

By | 5th January 2010

Let me remind you of the hoary old statistic often trotted out, namely that some 90% of corporate documentation is now created electronically rather than on paper, and over 90% of that is NEVER turned into paper.

Whether the statistics are accurate or not, there can be no doubt that vast amounts of information are now held in electronic form. This leads to questions about the way companies deal with the storage of such information and what arrangements they have for its retrieval when faced with litigation, a regulatory investigation, an arbitration or a Freedom of Information application.

If anyone was in any doubt that a good and sound system of storage and retrieval was required, the doubt should have been banished by the judgement in Earles v Barclays Bank PLC.

I referred just before Christmas to an article in The Times by Grania Langdon-Down [E-disclosure: how good is your filing system? 17th December, 2009], not just because it contained a reference to me and to Millnet (which it does!) but because I had been forcibly struck by several instances in the past few months where litigants have clearly failed to grasp that the world has changed and is still changing in relation to how we manage ESI (electronically stored information). If the statistics are right, there is far more ESI out there than paper and it is therefore an issue which needs urgently to be addressed.

It does not seem to matter whether the litigants in question are companies, banks, individuals, Government departments or other agencies. The plain and simple fact is that there is a lack of understanding about what is required in relation to the preservation and retrieval of information both inside the organisations themselves and also the cases reported in the newspapers and elsewhere often show that advisers appear to be in the dark too.

“Stuck in the photocopier” seems to have been the response by the London Borough of Haringey to the revelation that childcare inspectors failed to produce thousands of pages of evidence in the case of Sharon Shoesmith’s judicial review. You will recall that she was sacked as Haringey’s Children’s Services Director after the death of Baby P. For a fierce denunciation of the actions of Ed Balls, who orchestrated the sacking, and on the button suggestions for the lawyers acting for Mrs Shoesmith, you need look no further than Chris Dale’s blog on the subject [The Baby P case may be the disclosure story of the year, 15th Deecmber, 2009]. Please read it. It is a real corker!!!

The failure to “get it” is not confined to Haringey. The phrase has recently been applied to our elected representatives and their predilection for using taxpayers’ money for a wide variety of purposes outside the definition of what is “wholly and necessarily incurred” in the performance of their duties. It is an inelegant phrase but it seems to capture succinctly the failures to which it is applied.

For my purposes, I wrote last year about the inability of the CPS to “get it” in their failure to prepare/photocopy documents in a timely way (over 6 months) so that the case against five men accused of affray was ultimately dismissed by the judge [Have photocopier, will travel, 3 November, 2009].

My big hope for 2010 is actually quite modest. We have had four reported cases on E-disclosure since the latter part of 2008 (Digicel, Abela, Hedrich and Earles) . We are shortly to see publication of the Jackson review on civil litigation costs and a new Practice Direction to Part 31 and a new Technology Questionnaire.

As a result of these developments, 2010 could (should?) see quite a shake up in the world of e-disclosure. It simply will not be acceptable for the likes of Haringey, the CPS or Barclays Bank, nor anyone else who litigates in our courts or uses our legal system, to continue in the 21st century to deal with disclosure in a 19th century fashion.

Towards the end of last year, we became used to seeing all sorts of claims that 2010 was the year when we would see an explosion in litigation, or that the New Year would be a very good one for litigators. At Millnet, we have noticed a definite upturn in instructions and enquiries about how to deal with mountains of electronic material and it is tempting to think that either the litigation wave has arrived, or that advisers and their clients are beginning to “get it”, or possibly both!

What should we make of all this as we start the New Year? Presumably the cases and the changes in the rules will have many litigation lawyers reaching for their copies of the CPR (on the assumption that they do not access the rules on line!) in order to escape the wrath of judges like His Honour Judge Simon Brown QC.

But while the CPR will make interesting reading for those not yet familiar with Part 31 or the Practice Direction and while we await publication of the Jackson report and the decisions of the rules committees on the new rules, I wonder what busy litigation lawyers will be saying to their clients should be their New Year Resolutions for 2010.

Many journalists and commentators go in for the sport of New Year predictions. Not so many return to the subject to check how they have done after the 12 months have elapsed! I thought I would avoid that trap by not listing a series of predictions nor an amusing “diary” of likely events for the next 12 months.

In an earlier post  [UK firms falling short of EDI readiness, 11 November, 2009] I touched on areas where I thought attention might be directed in relation to the storage and retrieval of documentation.  Now, I am more sure than ever that clients and their advisers should be thinking about matters such as litigation readiness, the operation of litigation holds and getting to grips with e-disclosure. At the very least, why not contact one or two litigation support providers and set up a few meetings to see what is out there? If that were to happen, those who had taken the decision to enquire how their litigation might be conducted more efficiently would not be forced to go cap in hand, and late, to the nearest provider when the time for disclosure is only days away and they have suddenly realised there is a problem. This last approach of course usually means the whole exercise will be fraught for client, lawyer and provider and it will be expensive!

We have heard much about LPO or Legal Process Outsourcing. How about Litigation Process Outsourcing? After all, what lawyers are good at is analysing and reviewing the issues for their clients and advising on the strategies to be followed as a result of such analysis and review. What they are not good at, by and large,  is the process of retrieving the electronic material, processing it and then making it available to their teams, Counsel, experts and others in a quick, reliable and cost effective manner, proportionately and in accordance with the rules and without spending unnecessary time reviewing material which ultimately is not germane to the issues in hand. Lawyers should beware the Digicel scenario of 6700 hours of lawyer time and £2 million in fees, all of which was wasted.

My modest hope for 2010 is that more thought will be given to strategy. I hope lawyers and their clients will think about potential problems before they arise and come up with possible solutions before there is a crisis. Help is often only a phone call or email away and that costs nothing, or nothing compared to the cost of a rushed and complicated exercise at the last moment under pressure from the other side and the courts.

In an era of tightened belts and economic difficulty, Grania Langdon-Down rightly points out that persuading companies to spend now to save later is a thankless task. Her article does, however, refer to the case of UBS which was fined more than $2 Million for getting it wrong in an employment case before deciding to go for a global document management project!

All I am saying is, at least look at strategy for 2010. It might save you millions. It will certainly save you good money and earn you the gratitude of your clients and the courts! What is more, I guess you may well find you and your clients are ahead of the game too.