The need to know

By | 18th May 2010

Sir Humphrey: Now go in there and inform me of their conversation.
Bernard Woolley:
I’m not sure I can do that, Sir Humphrey. It might be confidential.
Sir Humphrey:
Bernard, the matter at issue is the defence of the realm and the stability of the government.
Bernard Woolley:
But you only need to know things on a need to know basis.
Sir Humphrey: I need to know everything! How else can I judge whether or not I need to know it?
Bernard Woolley:
So that means you need to know things even when you don’t need to know. You need to know them not because you need to know them, but because you need to know whether or not you need to know. And if you don’t need to know you still need to know, so that you know there is no need to know.

So, how do we know what we need to know in the field of e-Discovery? Busy litigation lawyers have not got the luxury afforded to Sir Humphrey of a Bernard to put it all into context. There are numerous sources available but where are they?

Pride of place must go to the CPR and recent judgments although it is as well to be aware of the influence of the individuals and bodies we have chosen to call the ‘movers and shakers’.

To assist in knowing where to look for information on the background to electronic disclosure (or what we call Smart e-Discovery) we have been building up the resources section of the Smart e-Discovery blog under the ambitious heading of “All you need to know… ” and, by way of introduction, some of the new sections are referenced in the rest of this piece.

The context of all this is that electronic handling and processing of electronic documents is relevant in all spheres of modern business life not least because of the prevalence of electronic communications in commerce today. It has become one of those apocryphal statistics of the 21st century (that nevertheless has the ring of truth about it), namely that the majority of company documentation is now created electronically and 90% of it is NEVER turned into paper.

There have been a number of developments in this field over the last decade, but since 2008 the trickle has become a flood. For example, whereas it used to be the case that those involved in contentious business advice had no need to understand electronic disclosure, it is now dangerous for lawyers to make this assumption as can be seen from the judgment of His Honour Simon Brown QC in Earles v Barclays Bank PLC where he described a failure to be acquainted with and to abide by the CPR as gross incompetence.

Contentious business takes many forms. It may be regulatory, such as FSA or SFO or EU Commission inquiries, FCPA actions, investigations under the new Bribery Act, public inquiries, employment tribunal cases, competition cases, professional indemnity cases, construction, patent actions, IP issues or just plain commercial litigation and dispute resolution. Arbitration, mediation and other forms of ADR may also throw up the need to manage and search electronic documents.

The context is relatively simple and lawyers should have no difficulty in getting to grips with it. The main two areas are the CPR and the relevant Practice Direction to Part 31 and the case law on the subject.

So what is the current state of play and what is it that those practising in the courts of England and Wales need to know?

The judge in Earles made it clear and in stark terms that PD 31 2A (electronic disclosure) “is in the CPR and those practising in the Civil Courts are expected to know the Rules and practice them; it is gross incompetence not to”.

The Senior Master in Goodale published the draft new Technology Questionnaire in relation to ESI. The questionnaire is currently bogged down in a subcommittee of the Rules Committee and may not now be incorporated into the CPR before the autumn of 2010 but by publishing it in this way in the schedule to his judgment, the Senior Master has sent a powerful message to practitioners that this is the format they should adopt when considering electronic disclosure whether it is formally part of the CPR or not.

Adverse costs consequences may flow from a failure to comply with the Rules. Obvious, but also remember Rule 3.4(2) and the Court’s power to strike out pleadings in the event of a breach of the rules. If Judges made more use of this provision, and soon they may well do so, there would be little need for new Rules. The court already has all the power it needs to police the rules including those relating to e-disclosure.

The courts will give short shrift to parties who fail to comply with the rules and/or take their obligations seriously. Collaboration between the parties and active guidance from the courts are also expected (see Goodale). Parties are encouraged to discuss and agree the extent of the “reasonable search” which is required and how disclosure should be given. Maintaining an open dialogue with the opposition and seeking help from the court where necessary will be key.

Goodale also confirms that the incremental approach to dealing with e-disclosure is preferred. See the section where the Senior Master says that the approach is crude to begin with and then if the numbers justify it may be taken further.

The courts have adopted a policy of name and shame in respect of those who fail to discharge, properly or at all, the duty to disclose in accordance with the CPR. (See the recent cases of Al-Sweady and Sharon Shoesmith).

The courts may be moving towards the development of a type of US style “litigation hold”. This means that organisations may well need to put systems in place to ensure that electronic data can easily be preserved and retrieved when required for review. Prudence dictates that data should be preserved at an early pre action stage to avoid criticism and possible costs sanctions.

Clearly, the whole area of e-discovery/e-disclosure is subject to a process of constant change and refinement and if you want to keep up with all of this you need look no further! We plan to update the resources sections of the blog frequently and if you are curious (on a ‘need to know’ basis, of course!) you could start by referring to any of the following sections:

Case notes
Civil Procedure Rules
ESI Questionnaire
Movers & shakers.