Reasonable and Proportional Discovery in the Digital Paradigm: The Role of Lawyers and Judges in the Context of the

New Zealand Discovery Rules Judge David Harvey1

Introduction The Digital Paradigm presents many challenges for legal practice. More and more information is stored electronically as we move from the paper-based environment to a digital on-line world. This electronically stored information (ESI) is replacing the traditional hard copy document and this has revolutionary implications for the process of discovery. The Digital Paradigm demands that discovery be a process having regard to the large volumes of material in digital format scattered over many devices and in the hands of many people within an organisation. In this paper I shall discuss the discovery process and the way in which the High Court rules in New Zealand address discovery in the new Paradigm. I wish to first emphasise the need for a new mindset for e-discovery and then outline the process of discovery. I then wish to examine the New Zealand approach to considering a High Court rules and then discuss the checklist that forms the basis for discovery under the rules along with technological implications. A New Discovery Mindset The New Zealand Rules illustrate the necessity for a new discovery mindset. The need for a new approach to discovery was articulated by David Lender and Magistrate Judge Andrew Peck in the following way: “Thus, in order to make litigation more affordable and focused the entire paradigm of discovery needs to change. Litigants and courts should approach discovery differently depending on what is at stake in the case, and how complex the issues are expected to be. There simply is no reason in most cases to produce thousands upon thousands of documents from dozens of custodians, simply because they have touched an issue, when the dispute really centers around a handful of key players who will have most (albeit not all) of the documents that are potentially relevant to the case.”2


LLB (Auckland); MJur (Waikato); PhD (Auckland) A Judge of the District Court, Auckland , New Zealand


David Lender & Andrew Peck, “10 Key E-Discovery Issues in 2011: Expert Insight to Manage Successfully” The Huron Legal Institute available from The Metropolitan Corporate Counsel at <> at p 5. 1

Thus one must adopt a “horses for courses” approach. The extent of discovery will differ from case to case and the themes of reasonableness and proportionality are essential in the approach to ESI cases and disputes. As was said in Rimkus Consulting Group, Inc. v. Cammarata3 “*T+he reasonableness of discovery burdens in a $550 million case arising out of the liquidation of hedge funds, as in Pension Committee, will be different than the reasonableness of discovery burdens in a suit to enforce noncompetition agreements and related issues, as in the present case.” Rimkus emphasised reasonableness and proportionality noting: “*w+hether preservation or discovery conduct is acceptable in a case depends on what is reasonable, and that in turn depends on whether what was done – or not done – was proportional to that case and consistent with clearly established standards.”4 This approach was considered “too amorphous” in Orbit One Communications, Inc. v. Numerex5 Corp. which suggested that that, “until a more precise definition is created by rule, a party is well-advised to ”retain all relevant documents (but not multiple identical copies) in existence at the time the duty to preserve attaches.” However, as new rule systems develop, reasonableness and proportionality are being emphasised, especially in England and New Zealand. In the pursuit of reasonableness and proportionality courts have to be prepared be a) robust and b) set limits to the reasonable search for documents. This may include limiting search terms or methods used. What must be recognised is that, as an aspect of the digital paradigm arising from the properties of digital technologies, it is no longer possible to follow every line of enquiry. It may well be that the “smoking gun “ will be undiscovered. But limitations are necessary to achieve justice at an effort and cost that is reasonable and proportionate to the case. The Obligations of the Parties Part of the new discovery mindset requires a different approach from the lawyers. This brings into the focus the theme of collaboration and co-operation in the discovery process. The objectives of reasonableness and proportionality will be achieved if there is discussion

3 4

688 F. Supp. 2d 598, 613 n.9 (S.D. Tex. 2010). Ibid. p. 613. 5 2010 WL 4615547 (S.D.N.Y. Oct. 26, 2010. 2

and agreement. The Federal Rules emphasise the importance of meet and confer obligations under R. 26(f).6 Courts must insist on effective co-operation and prior discussion of the extent of the search. This is made clear in the Sedona Conference Cooperation Proclamation with its call for “cooperative, collaborative, *and+ transparent discovery” and the expectation that parties will “reach practical agreement on search terms, date ranges, key players, and the like.” The Process of Discovery

An Explanation of the Stages The phased process illustrated in the diagram reflects some of the phases that appear in Court Rules in England and New Zealand. 1. Information Management – the evaluation of how records management programs impact electronic records and E-Discovery 2. Identification – the process of learning the location of all data which is subject to the duty to preserve or potentially disclose in pending or prospective litigation

Meet and confer obligations are also clear and required by Part 31 of the English High Court Rules as well as Practice Direction 31B – Disclosure of Electronic Documents. The New Zealand Rules require a co-operative approach (High Court Rules 8.2) which will be discussed below. 3

Preservation\Collection 3. Duty to preserve arises when a party reasonably foresees that information may be relevant to pending or anticipated litigation 4. Data collection – the acquisition of electronic information (data) – Electronic information should be collected in a manner that is comprehensive, maintains content integrity and preserves form. Processing\Review\Analysis 5. Electronic Discovery Processing – designed to accommodate a wide variety of unstructured data, handle each form in a manner appropriate to its file type and generate output that is structured in accordance with review requirements that often vary with law firm practices, client needs and review technology provider specifications. 6. Document Review – used to identify responsive documents to produce and privileged documents to withhold. Improvements in data storage, database and search technology , and online review functionality are providing increasingly efficient options for handling the volume of data and streamlining the review process. 7. Analysis – process of evaluating a collection of electronic discovery materials to determine relevant summary information, such as the key topics of the case, important people, specific vocabulary and jargon (which can vary significantly between and even within companies) and important individual documents. Analysis is performed throughout the remainder of the process as new information is uncovered and issues of the case evolve. Good technology and techniques are essential to effective analysis. 8. Production – the delivery of responsive, non-privileged documents to opposing counsel. R. 26(f) sets an expectation that the method and format by which e-data are to be produced should be considered and negotiated by the parties early in the discovery process. The New Zealand 2013 Practice Note “The Use of Electronic Bundles in the High Court”7 sets out detailed criteria for production at trial. The Electronic Discovery Reference Model - Discussion The process of discovery is designed to both reduce volume and increase the relevance of data that is to be available for discovery. The first stage in the process deals with information management. A proper information management policy is essential in any organisation even where litigation is not contemplated, if only for the effective and efficient archiving and retrieval or information at some future time. It is perhaps the best insurance policy for any potential litigation to which the organisation may be subject. It is my view that all organisations, and

HCPN 2013/1 (Civ and Crim)


especially large ones where there may be increased litigation risk, must have a proper information management policy and as part and parcel of general legal advice, corporate counsel or the organisation’s solicitors should advise them accordingly. A proper information management or electronically stored information (ESI) policy will pay dividends in the event of litigation and in the inevitable discovery process. This may be demonstrated by a consideration of what may happen in practice. One of the enquiries that a Judge should be making at Case Management Conference or Discovery Conference stage and which counsel must be able to immediately answer is about the document retention policies of the parties. What are the business practices of the parties in relation to the creation, storage and destruction of ESI? Proper ESI management prevents businesses throwing up huge amounts of information in a totally disorganised state, which is difficult to access and makes finding what is required virtually impossible without expensive software and review. Software programs that organise documents as they are generated are not expensive in relation to the huge cost that can be thrown up if such software are not used.8 Proper document management systems means that businesses, particularly those regularly exposed to litigation, will be better prepared for the discovery process by having their ESI well organised and readily searchable. They should create proper and effective information governance strategies. Courts need to look at being less sympathetic in terms of the orders they make and the costs sanctions they impose on such entities when they have taken no steps in this regard. How effective can judicial scrutiny of document retention policies be? In the English case of Timothy Duncan Earles v Barclays Bank Plc9 the judge’s criticism of the successful defendant’s failure to observe disclosure rules, and the costs sanction imposed, led the bank to institute a program of internal training in respect of E-Discovery.10 The next stage in the discovery reference model addresses identification of the data that may be relevant in the proceedings. As I have already indicated, a proper information management policy will assist in identifying the location of data and enable a process by which the collection thereof may take place. It is to be remembered that ESI will reside not only on office computers and servers but also in the Cloud, on PDAs, mobile phones, pagers,

DuPont conducted an internal review some years ago and found that they had produced three years’ worth of data representing 75 million documents, 50 percent of which could have been lawfully deleted at a cost saving of US$12 million dollars. See Oracle White Paper, Lower E-Discovery Costs through Enterprise Records and Retention Management (March 2007) (“Oracle White Paper”) at p 4. (last accessed 5 March 2014) 9 [2009] EWHC 2500 (Mercantile). 10 For discussion see Chris Dale “Costs Penalty for non -compliance with e-disclosure obligations” and “Earles v Barclays Bank reported in The Times (Both last accessed 5 March 2014) 5

digital memory storage devices and thumb drives and will include all forms of communication including audio files, e-mails, inter office memos and social media communications. Once data has been identified it must be collected and preserved. The acquisition of ESI from relevant systems is critical and must be done properly even although the dataset may be a large one. I say this because collection is associated with preservation. Failure to properly preserve data can result in sanctions at a later stage in proceedings once the issue of discovery falls under judicial scrutiny. But the collection of data must be done meticulously and preferably by those who are trained both legally and technologically. It is also important to recognise that collection, performed within the organisation, could well give rise to allegations of spoliation and could be compared with “putting the fox in charge of the henhouse.” It is for this reason that I suggest that identification and collection be carried out by a third party. The next stage – processing, review and analysis – are in the nature of a continuum. The processing phase allows the party to cull data and remove redundant and/or irrelevant ESI. Also at this stage ESI is converted into a format that may enable effective review. This phase will generally involve software tools and the importation of data into other e-discovery software. At the same time the review process is being undertaken, counsel or legally trained people within the law firm will review documents, seeking data that is relevant, relating that data to the various issues in the case and at the same time consider matters such as privilege or confidentiality. Once again this will usually involve the use of software review tools which cuts time and costs in exhaustive manual review. It is a sad fact that even although we are well advanced into the Digital Age many lawyers conduct discovery of electronic materials by printing the material out into hard copy and then engaging in manual review. This cannot be viewed as a cost effective solution and will inevitably result in increased and unnecessary costs which, with the emphasis on proportionality in E-discovery, cannot be condoned. It is at this stage, of course, that the analysis process comes into play and, using software tools, keywords and other forms of search parameters, counsel may analyse data centered upon the data custodian or issue-based relevance analysis. One of the ironies arising from ESI lies in the way in which we confront document review. In the paper paradigm if a party disclosed that it had a building full of lever arch files which were likely to contain relevant documents, no judge would be heard to say that the cost of retrieving and reviewing these documents was disproportionate to the amount at stake in the case, or that the parties would only have to review 60 percent or 70 percent of them. If the paper documents were there, unless some sampling technique could be agreed, they usually had to undergo manual human review - the only sure way of searching for relevant paper documents.

In the Digital Paradigm computer software is used to eliminate a significant proportion of ESI from ever being reviewed by a human. Even in small cases, if all the documentation that was potentially searchable was printed out it would often fill several rooms or even warehouses. Document review is an important aspect of the factual investigation that is an essential part of common law litigation. But because of the way in which digital devices create, copy and store information across numerous platforms, the old methods of manual search and disclosure that characterised the paper paradigm cannot continue in the digital age. And to apply McLuhan’s adage the tools themselves that we have made shape our responses. Or, to put it another way, as Charles Clark said in the context of protecting copyright material in the digital paradigm “The answer to the machine is in the machine.”11 If ESI has not been organised when created, harking back to the importance of document management and retention, parties need to use digital technologies such as predictive coding software along with a number of other solutions to search for and reduce the number of documents that need to be reviewed. These search methods may mean that perhaps as much as 60 percent or 70 percent of the documents identified will never be manually reviewed Counsel and Judges need to gain an understanding of these systems, encourage their use and be ready to direct them in cases of dispute as reasonable methods of search. This is part of the wider theme of judicial activism and judicial education in and awareness of technological solutions for ESI disputes which I shall discuss later. By the time the production phase is reached the volume of data will have been substantially reduced and parties may at this stage start to provide responsive data to the opposing side. Under normal circumstances there should have been communication and a cooperative approach adopted by counsel. In the production phase counsel have a duty to continue to cooperate and act responsibly having regard to the importance of relevance and proportionality. Once the presentation phase is reached the hard work involved in discovery has been completed. Presentation is the culmination of the discovery process where relevant material has been identified and the parties decided on what information will be used at trial. In New Zealand the requirements of the Electronic Bundle Protocol will need to be considered. The New Zealand High Court Rules

Charles Clark ‘The Answer to the Machine is in the Machine’, in: P. Bernt Hugenholtz (ed.), The Future of copyright in a digital environment : proceedings of the Royal Academy Colloquium organized by the Royal Netherlands Academy of Sciences (KNAW) and the Institute for Information Law ; (Amsterdam, 6-7 July 1995), (Kluwer Law International, The Hague, 1996).


Background The New Zealand High Court Rules Committee, in recognition of the issues raised by the Digital Paradigm, recommended changes to the discovery rules which are embodied in the High Court Amendment Rules (No 2) 2011 – the new discovery rules – which make significant changes and additionas to the existing High Court Rules for Discovery and inspection. Several new principles are introduced such as those of co-operation and proportionality. Associated with these principles are new duties that require the preservation of documents, often before proceedings are commenced, and the duty of disclosure of documents when pleadings are filed. The High Court Amendment Rules provide a discovery checklist with which parties must consult and depending on the specific scenario may be required to make standard or tailored discovery. The High Court Amendment Rules also introduced a new listing and exchange protocol with inspection to take place by way of electronic exchange. The new High Court Rules for Discovery came into force on 1 February 2012. What the Rules Provide The new Rules were designed with the intent of reducing the disproportionate costs and delays that can be caused by discovery.12 In addition, the Rules seek to restrict the use of discovery as a tactical tool. The key changes contained in the Rules may be summarised by the following nine observations: 1. Parties must co-operate to ensure that discovery is proportionate and facilitated by agreement on practical arrangements.13 2. Once litigation is reasonably contemplated, prospective parties should take reasonable steps to preserve documents that are reasonably likely to be discoverable 14
12 13

The abbreviation HCR is used for references to the High Court Rules. HCR 8.2. R. 8.2 provides: Co-operation 1) The parties must co-operate to ensure that the processes of discovery and inspection are— (a) proportionate to the subject matter of the proceeding; and (b) facilitated by agreement on practical arrangements. 2) The parties must, when appropriate,— (a) consider options to reduce the scope and burden of discovery; and (b) achieve reciprocity in the electronic format and processes of discovery and inspection; and (c) ensure technology is used efficiently and effectively; and (d) employ a format compatible with the subsequent preparation of an electronic bundle of documents for use at trial.

Moreover, the term “practical” is at the mercy of the application of “common cents – or sense” by the parties. However, it can be read to require both sides at a minimum to be able to articulate their respective systems specific to the litigation in the proceedings. 14 HCR 8.3. R. 8.3 provides Preservation of documents (1) As soon as a proceeding is reasonably contemplated, a party or prospective party must take all reasonable steps to preserve documents that are, or are reasonably likely to be, discoverable in the proceeding. (2) Without limiting the generality of subclause (1), documents in electronic form which are potentially discoverable must be preserved in readily retrievable form even if they would otherwise be deleted in the ordinary course of business. Counsel should make sure that at a minimum the parties directly involved in the litigation preserve relevant data, which often includes documents and emails. Where the parties systems are not under their direct control, counsel should take reasonable steps to ensure the third parties preserve the documents (i.e., if a client is using Google Apps to send email and author documents. In the third-


3. Parties must make initial disclosure of documents referred to in a pleading or used when preparing the pleading. 15 The disclosure must be made at the time that the pleading is served. 16 4. Parties must discuss and endeavour to agree on an appropriate discovery order prior to the first case management conference. 17 The discovery order must address the matters set forth in the new discovery checklist in the rules. 18 5. At the case management conference, the Judge may dispense with the discovery, or order standard discovery, or order tailored discovery. 19 Where standard
party control situation, counsel should advise their clients not to delete any such emails and documents and contact to resolve additional issues as appropriate.) Id. 15 HCR 8.4.. R. 8.4 provides: Initial disclosure (1) After filing a pleading, a party must, unless subclause (2) applies, serve on the other parties, at the same time as the service of that pleading, a bundle consisting of— (a) all the documents referred to in that pleading; and (b) any additional principal documents in the filing party’s control that that party has used when preparing the pleading and on which that party intends to rely at the trial or hearing. (2) A party need not comply with subclause (1) if— (a) the circumstances make it impossible or impracticable to comply with subclause (1); and (b) a certificate to that effect, setting out the reasons why compliance is impossible or impracticable, and signed by counsel for that party, is filed and served at the same time as the pleading. (3) A party acting under subclause (2) must, unless the other parties agree that initial disclosure is not required, or that a longer period is acceptable, either serve the bundle referred to in subclause (1) within 10 working days from the service of the pleading or apply for a variation of that requirement within that period. (4) If a party fails to comply with subclause (1) or (3), a Judge may make any of the orders specified in rule 7.48. (5) Despite subclause (1), a party does not need to disclose any document in which the party claims privilege or that a party claims to be confidential. (6) Despite subclause (1), a party does not need to disclose any document that either— (a) is the subject of a claim of public interest immunity; or (b) is reasonably apprehended by the party to be the subject of such a claim. (7) Despite subclause (1), a party does not need to include in a bundle served by that party any document contained in a bundle already served by any party or any document attached to an affidavit already filed in court. (8) The bundle of documents may be served either electronically or as a bundle of copies in hard copy form. (9) If an amended pleading is filed prior to the making of a discovery order, this rule applies to that amended pleading if it either— (a) refers to documents not referred to in any earlier pleading filed by the party who files the amended pleading; or (b) pleads additional facts. 16 Ibid. Rule 8.4(4) (see note 4 above) provides that failure to comply with obligations under R 8.4(1) or (3) enables Judge to make an order under R. 7.48 which gives the Judge the power to make any order that he or she thinks just. A non-exclusive list of the types of order that a Judge may make are set out in R. 7.48(2)(a) – (g) (a) that any pleading of the party in default be struck out in whole or in part: (b) that judgment be sealed: (c) that the proceeding be stayed in whole or in part: (d) that the party in default be committed: (e) if any property in dispute is in the possession or control of the party in default, that the property be sequestered: (f) that any fund in dispute be paid into court: (g) the appointment of a receiver of any property or of any fund in dispute. 17 HCR 8.11. R 8.11 provides: Preparation for first case management conference (1) The parties must, not less than 10 working days before the first case management conference, discuss and endeavour to agree on an appropriate discovery order, and the manner in which inspection will subsequently take place, having addressed the matters in the discovery checklist in accordance with Part 1 of Schedule 9. (2) The joint memorandum, or separate memoranda, filed under rule 7.4 must, in addition to the matters required to be addressed under rule 7.4(3), set out the terms of the discovery order that the Judge is requested to make and the reasons for a discovery order in those terms. (3) If the parties agree to vary the listing and exchange protocol set out in Part 2 of Schedule 9, they need advise the Judge only that variation has been agreed, not the details of that variation. 18 Ibid.. 19 HCR 8.12. R. 8.12 provides: Orders that may be made (1) At the case management conference the Judge may, under rule 8.5, make—


discovery is required by the Judge, it entails the production of documents that the party relies upon and documents that adversely affect that party’s, or another party’s case. 20 6. Tailored discovery21 is presumed to apply instead of standard discovery if the costs of standard discovery are disproportionate to the matters at issue in the following situations: a. When the costs of standard discovery are disproportionate to the matters at issue; b. Either party makes allegations of fraud or dishonesty; c. The sums at issue exceed $NZ 2.5 million dollars; d. Where the parties agree to tailored discovery. 22 Tailored discovery can involve more or less discovery than standard discovery. 23 In addition, tailored discovery requires discovery to proceed by category or through a r method that facilitates the identification of particular documents. 24 7. Parties’ have a statutory obligation to conduct a reasonable search for discoverable documents. 25

(a) an order dispensing with discovery; or (b) an order for standard discovery; or (c) an order for tailored discovery, setting out categories (by, for example, subject headings and date periods) or another method of classification by which documents are to be identified. (2) The discovery order may— (a) incorporate the listing and exchange protocol set out in Part 2 of Schedule 9; or (b) vary that protocol; or (c) contain other obligations that are considered appropriate. (3) The discovery order may include specific directions as to the manner of discovery. (4) A discovery order does not require a party to discover electronically stored information that is not primary data. (5) Despite subclause (4), the Judge may order a party to discover electronically stored information that is not primary data if the Judge is satisfied that the need for, and the relevance and materiality of, the non-primary data sought justify the cost and burden of retrieving and producing that data. (6) For the purposes of this rule, primary data means active data and readily retrievable archival data.. 20 HCR 8.7. R. 8.7 provides: Standard discovery Standard discovery requires each party to disclose the documents that are or have been in that party’s control and that are— (a) documents on which the party relies; or (b) documents that adversely affect that party’s own case; or (c) documents that adversely affect another party’s case; or (d) documents that support another party’s case. 21 HCR 8.8. R. 8.8 provides: Tailored discovery. Tailored discovery must be ordered when the interests of justice require an order involving more or less discovery than standard discovery would involve. 22 HCR 8.9. R. 8.9 provides: Presumption as to tailored discovery It is to be presumed, unless the Judge is satisfied to the contrary, that the interests of justice require tailored discovery in proceedings— (a) where the costs of standard discovery would be disproportionately high in comparison with the matters at issue in the proceeding; or (b) that are on the commercial list, or on the swift track (if an order is made under rule 8.5(3)); or (c) that involve 1 or more allegations of fraud or dishonesty; or (d) in which the total of the sums in issue exceeds $2,500,000; or (e) in which the total value of any assets in issue exceeds $2,500,000; or (f) in which the parties agree that there should be tailored discovery. 23 HCR 8.8 – see above Note 10. 24 HCR 8.10. R. 8.10 provides: Obligation of party ordered to make tailored discovery Tailored discovery requires a party against whom it is ordered to disclose the documents that are or have been in that party’ s control either in categories as indicated in clause 3(2) of Part 1 of Schedule 9 or under some other method of classification that facilitates the identification of particular documents.


8. Documents must be listed in accordance with a new listing and exchange protocol set out in Part 2 Schedule 9 of the Rules, unless the parties agree otherwise. 26 9. Inspection of documents occurs by way of an electronic exchange of documents, unless the court orders otherwise. 27 This means that paper documents must be scanned electronically so that electronic copies can be exchanged.

HCR 8.14. R. 8.14 provides: Extent of search (1) A party must make a reasonable search for documents within the scope of the discovery order. (2) What amounts to a reasonable search depends on the circumstances, including the following factors: (a) the nature and complexity of the proceeding; and (b) the number of documents involved; and (c) the ease and cost of retrieving a document; and (d) the significance of any document likely to be found; and (e) the need for discovery to be proportionate to the subject matter of the proceeding. 26 HCR 8.15, 8.16. provides: Affidavit of documents (1) Each party must file and serve an affidavit of documents that complies with this rule, subject to any modifications or directions contained in a discovery order. (2) In the affidavit of documents, the party must— (a) refer to the discovery order under which the affidavit is made; and (b) state that the party understands the party’s obligations under the order; and (c) give particulars of the steps taken to fulfil those obligations; and (d) state the categories or classes of documents that have not been searched, and the reason or reasons for not searching them; and (e) list or otherwise identify the documents required to be discovered under the order in a schedule that complies with rule 8.16 and Part 2 of Schedule 9; and (f) state any restrictions proposed to protect the claimed confidentiality of any document. (3) The affidavit may be in form G 37. (4) Each party must file and serve the affidavit of documents within such time as the court directs or, if no direction is made, within 20 working days after the date on which the discovery order is made. R. 8. 16 provides Schedule appended to affidavit of documents (1) The schedule referred to in rule 8.15(2)(e) must, in accordance with that discovery order, list or otherwise identify documents that— (a) are in the control of the party giving discovery and for which the party does not claim privilege or confidentiality: (b) are in the control of the party giving discovery for which privilege is claimed, stating the nature of the privilege claimed: (c) are in the control of the party giving discovery for which confidentiality is claimed, stating the nature and extent of the confidentiality: (d) have been, but are no longer, in the control of the party giving discovery, stating when the documents ceased to be in that control, and the person who now has control of them: (e) have not been in the control of the party giving discovery but which that party knows would be discoverable if that party had control of them. (2) Subject to Part 2 of Schedule 9, documents of the same nature falling within subclause (1)(b), (d), or (e) may be described as a group or groups. (3) The description of documents for which privilege is claimed under subclause (1)(b) must be sufficient to inform the other parties of the basis on which each document is included in a group under subclause (2). (4) The schedule must include documents that have previously been disclosed under rule 8.4. (5) The schedule need not include— (a) documents filed in court; or (b) correspondence that may reasonably be assumed to be in the possession of all parties. 27 HCR 8.27. R. 8.27 provides: Inspection of documents (1) As soon as a party who is required to make discovery has filed and served an affidavit of documents, that party must, subject to rule 8.28, make the documents that are listed in the affidavit and that are in that party’s control available for inspection by way of exchange. (2) Documents must be exchanged in accordance with the listing and exchange protocol in Part 2 of Schedule 9. (3) If a discovery order exempts a party from giving discovery and inspection electronically, that party must make the documents listed in the affidavit of documents available for inspection in hard copy form, and must promptly make those documents available for copying if requested. (4) A party who has received a document electronically under this rule may, on giving reasonable notice in writing, require the person giving discovery to produce the original document for inspection. (5) This rule also applies to documents listed in an affidavit filed and served under rule 8.20 or 8.21. (6) This rule is subject to the terms of any discovery order made under rule 8.5. Counsel can realize substantial monetary and time savings if they implement a technology system that allows for easy search, extraction and production of documents as set-forth in the statue. Since technology improves rapidly, parties seeking system recommendations can email Daniel Garrie (



In addition to these these nine observations, the Rules impose additional upfront costs on parties, relating to the parties preservation of documents and requiring the parties to engage in dialog sufficient to reach agreement on discovery and inspection issues. These additional cost burdens imposed by the Rules are predicated on the assumption that by requiring these actions early on the parties will realize substantial savings later in the course of the proceedings.28 The New Zealand E-Discovery Checklist in Flowchart Form

Checklist clause 1.1(a) Review pleadings List relevant issues Identify relevant categories of documents

Checklist clause 1.1(b) Hard copy and e-docs Other agents (e.g. lawyers, accountants) Duty to preserve (rules 8.3 and 8.13)

Checklist clause 1.1(c) Volume and ease of assembly Methods Time and cost involved Proportionality

28 It is noteworthy that the reform of discovery rules is not unique to New Zealand. Australia, England, Canada, and the United States have reformed their discovery rules albeit to varying degrees in an attempt to reduce costs and delays and to lessen the tactical use of discovery.


Rule 8.11 and checklist clause 1.1(d) Proportionality Protocol Duty to seek to agreement

Memorandum Rule 8.11
Aim for joint memorandum - If separate, justify position

Technology Use A theme that runs through the new discovery rules is the need for efficient and effective use of technology. In its consultation paper the New Zealand Rules Committee observed that “delay and costs can be reduced by moving to an electronic discovery regime while the efficiency of the discovery process and the ability to achieve a just outcome can be improved”. It was further noted that “technology can provide more accurate solutions which can assist in identifying the most important documents more quickly... the move to electronic discovery does no more than reflect what is happening in the profession in any event”.29 HCR 8.2(2)(c) requires the parties to ensure technology is used efficiently and effectively where appropriate and applies to a number of different stages in the discovery process reflecting the focus of the Rules Committee. Although it is not necessary to use electronic methods to find, identify, locate, retrieve or review documents these methods may in fact help reduce costs in some cases. Thus the use of technology although not mandated is available as an option. Once again, elements of reasonableness and proportionality will come into play. Recognising that the Digital Paradigm imposes new concepts that underly digital information, the Rules include a helpful glossary of technical terms. The glossary defines “metadata” as data about data. It states

Rules Committee Consultation paper: Proposals for reform of the law of discovery including electronic discovery and inspection 2.10 at paragraph 18. 13

“in the case of an electronic document, metadata is typically imbedded information about a document that is not readily accessible once the native electronic document has been converted into an electronic image or paper document, for example, the date of which the document was last printed or amended. Metadata may be created automatically by a computer system (system metadata) or maybe created manually by a user (application metadata) depending upon the circumstances of a case, metadata may be discoverable.” The glossary also defines PDF in the following way “PDF (portable document format) is a file format that enab les documents to be displayed or printed in a manner that preserves the format originally used by the author”. A PDF file may be either a searchable image file or an unsearchable image file. The Rules also differentiate between primary data and non-primary data. Primary data is data that is readily retrievable, whereas non-primary data is generally archival data that is not readily retrievable. Many organisations use backup tapes to make a full copy of an employee’s electronic data for disaster recovery purposes. These backup tapes contain archival data and are not readily retrievable and are not primary data for the purposes of the rules. Another important concept is that of native format. The glossary to the Rules describes native electronic document or native file format as “an electronic document stored in the original form in which it was created by computer software programme”. Lawyers will often create a document in Microsoft word and then convert it into a PDF before emailing the document. This is because the PDF preserves the original formatting and cannot be edited. It also eliminates much of the metadata underlying the word document. The native format of the document in such a case is the Microsoft word format and not the PDF format. Documents can be exchanged electronically either in native format or in PDFs. If emails are exchanged in native format they can be viewed by opening them in an email client. However if emails are exchanged in PDFs an electronic photocopy of the email is created and can only be viewed by looking at the PDF. The discovery check list under Listing and Exchange Requirements states “to reduce unnecessary costs of listing documents parties are encouraged to: a) Use native electronic versions of documents as much as possible; and b) Use the extracted metadata from native electronic documents instead of manually listing documents; and c) Convert documents to image format only when it is decided they are to be produced for discovery; and d) If document images are to be numbered, only number those images if they are to be produced for discovery.”

The discovery check list in addressing the issue of tailored discovery identifies methods and strategies for locating documents. The parties must seek agreement on the methods and strategies that are appropriate to conduct a reasonable and proportionate search for the documents that are identified including the following: a) Appropriate key word searches; b) Other automated searches and techniques for culling documents including concept searching, clustering technology, document prioritisation technology, email threading, and any other new tool or technique; and c) A method to be used to identify duplicate documents; and d) Where the specialist assistance is required to locate documents efficiently and accurately. Technology and Document Review For the reduction of the costs of discovery and to maintain the emphasis upon proportionality it is important to reduce the volume of documents for lawyers to review. Much of the information that may be reviewed will be irrelevant or redundant duplicated information and the solution is to address removing the information prior to starting the review. Technology aided techniques are a solution to reduce the burden and cost and some of the strategy are suggested in the check list. These include: 1) Key Word Searching 2) Concept searching; 3) Clustering technology; 4) Predictive coding or document prioritisation technology; 5) Email threading; 6) Near duplicate identification; 7) Native file review. These technology solutions each require a brief explanation. Key Word Searching is a fairly blunt instrument. Key words create a black or white scenario based upon whether or not a document contains a word or does not. The difficulty with key word searching is that it may result in irrelevant documents being identified because the key word selected may have different meanings or context to what is desired. The important thing to remember with key wording searching is that the construction of the search itself is critical together with an understanding of the limitations of the method. Ideally the construction of the search string or key words should be discussed with other parties so that the key words may be agreed. Because of its limitations, key word searching is not an ideal

method of cutting and filtering documents and other automated searches may be preferable. But, under the principles of the rules, if key word searching is to be used it is important to agree an approach with the other side to avoid conflict. I shall discuss further aspects of keyword searching in my discussion of Judicial Approaches to Stages in the EDiscovery Process below. Concept searching means a search that attempts to match results with the query conceptually rather than just by identity or similarity of words and can be useful when large volumes have to be examined and the search attempts to match results with the query conceptually. The methodology is based not upon key words but upon the subject matter of the document paragraph or sentence. Concept searching adds additional information to the very basic key words as it evaluates both words and the context in which they appear. Clustering technology means grouping documents by identifying conceptually alike documents and can bring cost savings in the document review phase. Clustering groups documents by identifying conceptually alike documents and the technology breaks them up into groups of similar documents. The technology is calculated through the mathematical relationship between the text and context of the documents. There is an advantage with this process in that similar issues can be investigated at the same time instead of reviewing different documents throughout the document review set. Predictive coding or document prioritisation technology a means the technology that analyses the decisions of the human review of a sample set of documents. The software then prioritises or ranks the remainder of documents in a larger dataset based on the decisions made on the sample documents which allows the most relevant documents to be identified first. It is particularly useful in the document review process and may produce accurate results especially when there are large volumes. An initial document set can be reviewed by someone knowledgeable about the matter. This person or group will be the lawyer(s) conducting the initial review, thus assisting in making a more informed, consistent and accurate review of information. The same irrelevancy calls are then carried forward to the remainder of the document set based on the results of the sample set. The software then prioritises or ranks the remainder of the documents based on the decisions made on the same documents which allows the most relevant documents to be identified first. An important feature is that the initial review must be carried out by someone with an intimate knowledge of the case at hand. Email threading means the technology that allows the identification of related emails in a thread and can identify the email end point and the unique emails in the thread. Many emails contain earlier message and are constructed in the form of a thread or a chain. As the majority of information for discovery purposes comprise as email , email threading technology is essential to respond to the problems caused by these chains. By identifying the end point of the email chain, redundant emails do not have to be reviewed. Again the benefit of the technology is in the review exercise where parties can focus on the entirety of the email exchange instead of coming across many duplicated parts of the same exchange. The technology allows for parties to move through emails more quickly and allows for accurate assessment if they focus upon the email exchange in its entirety.


Near duplicate identification is not mentioned in the particular methods and strategy section in clause 3(2)(a)(ii) of the check list, but it is an important method to assist in proving the costs and accuracy of the document review. Near duplicate technology identifies documents that have similar content although not an exact duplicate. The technology groups all of the near duplicates together so they can be reviewed at the same time allowing the reviewer to quickly focus on the differences and move through the documents more quickly and accurately. Email threading and near duplicate technology can be used on paper documents as well as e-documents. However the accuracy of the paper documents will depend upon the quality of the text searchable content or OCR – (optical character recognition) when the document is scanned. The check list refers to methods used to identify duplicate documents. Another way of addressing this is by “de-duplication”. This is referred to in the glossary as the process of identifying and removing duplicate documents from a collection of documents so that one unique copy of each document remains. The glossary then becomes quite technical. It states “a cryptographic hash function such as the message digest algorithm five (MDA5) may be used to generate a digital fingerprint for an electronic document. The digital fingerprint of a document can then be electronically compared against the digital fingerprint of any other document to determine whether the documents are exact duplicates. Duplication may also be implemented by using a cryptographic hash function applied to a group of documents. In the paper world the process of duplication required visually sighting documents to ascertain if there were duplicates. The technology makes the identification of duplicates more effectively. Once again it is important that the parties discuss how they should identify duplicate documents. Finally native file review allows lawyers to view documents in the format in which they were intended to be viewed. Spreadsheets and databases for example may only be able to be accurately assessed for their native applications. This can have considerable cost saving, thus emphasising the checklist requirement of reducing the unnecessary costs of listing documents. Converting all documents to PDF prior to the document review (rather than after it) will usually add unnecessary expense to the discovery process. It will usually be more efficient to review documents in their native file format and then only convert the relevant documents to PDF for the electronic exchange of documents. The discovery check list and the listing and exchange protocol do you not, of course, stand alone. The check list in fact is part and parcel of the preparation for the first case management conference (HCR 8.11). E-Discovery Advocacy As I have already suggested, a new discovery mindset is required on the part of counsel. There are a number of ways in which counsel may approach discovery, taking into account


the requirements to meet, consult and co-operate and the emphasis upon reasonableness and proportionality.30 1. Co-operation - True cooperation among parties will minimize the need for court intervention regarding discovery issues, so that the real focus can be on the merits of the underlying case. If there is a disagreement about issues but the parties demonstrate their efforts to cooperate, the court can rule more easily and more effectively, and the court may view parties perceived as reasonable in a more credible light. 2. Involve the Court Early - Early court involvement can help control the cost of discovery and help parties avoid costly mistakes, through guidance and implicit or express approval of protocols, or decisions regarding solutions for problems such as spoliation, among other things. 3. Understand the tools that are available to conduct properly conduct discovery – It is for this reason that I have discussed the use of technology. In the new discovery paradigm it is axiomatic that both counsel and the Judge are fully conversant with the available technology to achieve the goals of discovery – reasonableness, proportionality and relevance. 4. Support arguments or suggestions with proper information - this is associated with item 3 above. Technological knowledge as well as a proper understanding of the legal rules and issues underlying a case is essential in the new discovery paradigm. For example, an assertion regarding the burdensomeness of discovery should be backed up with specific information about the actual costs involved and supporting documentation showing the basis for those costs, such as invoices or vendor proposals. A judge might not understand, for example, why corporate data storage is so expensive, when he himself can buy an inexpensive drive with large capacity. Parties should also be prepared to offer information as to whether there are less costly alternatives. 5. Assist the Court with Expert Guidance – don’t be afraid to reach out to a specialist in the e-discovery field. Even the most even the most sophisticated Judges do not understand all the technical details related to data storage and retrieval or the variety of technologies available to search, analyze, and review information. 6. Emphasise Proportionality and relate to Damages and Defences – Proportionality is directly related to the scope of discovery. Proportionality will be related to a number


These suggestions are taken from “Ten Practical Tips in E -Discovery Advocacy” Huron Consulting 18

of aspects of the case, not the least of which may be the likely recovery . In particular, plaintiffs are likely to be asked their views on the amount of their likely recovery or, in certain cases such as human rights claims, the importance of the issues at stake. Defendants may be asked about their theories of defence. For example, in a class action, whether the defendant plans to defend based on facts related to the named plaintiffs or on a broader basis should affect the scope of discovery and could also affect the number of custodians for whom information is preserved. 7. Minimise Disputes about Privilege - Privilege disputes primarily arise in two contexts: disputes over whether documents are, in fact, protected by privilege or the work product doctrine and disputes related to purported privilege waiver. Both of these issues are best addressed by action before a hearing is actually needed. When the existence of the privilege is disputed, privilege lists come into play, and a court may need to conduct an in camera review. The proliferation of data in today’s world has resulted in commensurately large populations of documents withheld for privilege, which can be a problem for the reviewing court. Mechanically generated privilege lists often do not contain sufficient information for opposing parties (or the court) to determine the privileged nature of documents, and the volume of documents subject to potential in camera review can be daunting. One way to minimize these issues might be to develop a privilege protocol that will limit the number of documents included in a privilege list or potentially subject to in camera review, ideally with agreement from the other side.

8. Use Common Sense – common sense and reasonableness often go hand in hand. In the new discovery paradigm hearings should be conducted with an educational rather than an adversarial perspective, in order to educate judges regarding what makes sense. Most judges are interested in a common sense solution if one is offered. One example that can be helpful in a variety of scenarios is tiered or phased discovery. In a situation where a party is seeking relief to limit its preservation, for example, different degrees of preservation for different custodians might be a creative solution, or short term preservation until completion of the first wave of discovery, after which the parties can discuss whether ongoing preservation beyond that is required. Similarly, when there is a dispute regarding the burdensomeness of discovery, sequenced discovery can be helpful. Once the requesting party has examined what was produced in the first phase, the parties may agree on less future production than was originally contemplated (fewer custodians, unnecessary categories of documents, etc.).


9. Suggest Solutions When Spoliation is an Issue - When there has been spoliation of evidence, the injured party’s first instinct is often to move for sanctions, which may sometimes be appropriate. However, as an alternative or at least as a fallback position, it can be a good idea to suggest remedial measures. From the perspective of the party accused of destroying evidence, offering to take steps to remedy the situation as best possible makes good sense – it demonstrates good faith and gives the court the option of a less severe penalty. Examples could include finding other sources for the lost information, even if those sources might not otherwise have been discoverable, using forensic experts to reconstruct data, extra depositions or other forms of discovery, and more. Because these measures can be costly, it is likely that the party in the wrong will be required to bear the expense. These measures should be requested as early in the case as possible. Courts often see spoliation sanctions requests after the discovery period is closed, at the point at which the ability to reopen the issue and level parties’ positions is limited. This puts the judges in a difficult situation 10. Know the Law Applicable in the Jurisdiction – in litigation involving multi-national disputes or parties, discovery issues may arise in a number of jurisdictions. There may be subtle distinctions in discovery rules between national jurisdictions and in some countries, such as the United States, there may be differing rules between states and even between Federal circuits. In addition, understanding the case law in the relevant jurisdiction will help parties structure their arguments to address each aspect of the appropriate analysis (for example, whether there was spoliation, the party’s efforts to preserve, whether curative options are available, the level of culpability, and the actual nature and degree of prejudice caused by the spoliation). Judicial Involvement I have gone into some detail about principles that lie behind new discovery regimes and the issue of electronic discovery and some of the techniques and tools that are available because I want to provide a context for what I consider should be a higher level of judicial involvement in the E-Discovery process than merely hearing arguments and making a decision from time to time. Because of the requirements of reasonableness and proportionality, and because EDiscovery is a process that goes through a number of stages, judicial involvement is important in ensuring that the parties remain on the road. If they should depart from the established procedures it may well be difficult for a judge to require them to roll back to a particular point. Thus judicial superintendence and discipline will assist in keeping the parties and the process focussed.


The Rationale for Active Judicial Involvement The central issue in almost all discovery management is the determination of scope. A common theme of all the discovery rules is securing the just, speedy, and inexpensive determination of the case. In a recent article published by the University of Kansas Law Review, Professor Steven Gensler and Judge Lee Rosenthal argue that many of the eDiscovery challenges facing lawyers and litigants could be addressed in a more efficient and cost-effective manner through “active case management” by judges. According to Professor Gensler and Judge Rosenthal, a meaningful Federal Rules Rule 16 conference with counsel can enable “the court to ensure that the lawyers and parties have paid appropriate attention to planning for electronic discovery.”31 Case Conferencing is not restricted to the United States and is a feature of most discovery regimes in the Common Law world. In the United States a reference in the Rules to the “administration of proceedings” has been construed to recognize an affirmative duty of the court to exercise the authority conferred by the rules to ensure that civil litigation is resolved not only fairly, but also without undue cost or delay. As officers of the court, counsel share this responsibility with the judge to whom the case is assigned. Thus, in the United States the reference to “administer” is designed to enable judges “to elicit better cooperation when the lawyers and parties fall short.” Indeed, such a reference, when coupled with the “stop and think” certification requirement from Federal Rule 26(g), should give judges more than enough of a procedural basis to remind counsel and clients of their duty to conduct discovery in a cooperative and cost effective manner. To facilitate efficient and cost-effective discovery, judges must require lawyers to take their obligations to meet, confer and co-operate seriously and to submit a meaningful discovery plan at the case conference that addresses ESI issues likely to arise in the case. In New Zealand the goal is for there to be a consent memorandum. If there is not, there has to be an explanation why. In this way, the judge may well be able to identify a potential dispute and defuse it at case conference level, rather than at a full hearing. Things Judges Should Do a) Judges should encourage parties to narrowly target requests for ESI. b) Judges should evaluate whether the costs of complying with the requests are proportional to the benefit of complying. With this in mind, judges may i) need to impose limits on discovery; ii) encourage or order standard, tailored or staged discovery;


Steven Gensler and Judge Lee Rosenthal “The Re-Appearing Judge” *2013+ 62 University of Kansas LR 849, 858-9. 21

encourage or order sampling to determine the relevance, need, and cost of more expansive discovery; or iv) shift costs from the producing party to the requesting party, particularly when information that is not reasonably accessible must be produced. c) Judges need to help ensure that ESI is produced in a usable form, and they may need to clarify the procedures to be followed if privileged or protected information is inadvertently disclosed. d) Judges should help parties balance the need to preserve relevant evidence with the need to continue routine computer operations critical to a party’s activities, and enter preservation orders as appropriate. In the end, judges a) must actively manage electronic discovery, b) raise points for consideration by parties rather than waiting for parties to present disputes that can delay a case, add to its costs, and distract from its merits. Such active management can help ensure the expeditious and fair conduct of discovery involving ESI. Effective case management lets judges work to devise practical solutions to pressing problems and to shape cases toward pre-trial preparation that is reasonable and proportional to what each case requires. I shall give a more focussed example of judicial activity in the in the context Early Case Assessment phase of the E-Discovery process below. Judicial Education and Technological Awareness As well as active judicial involvement in the discovery process there must be a judiciary or a cadre of judges who are informed and educated as to the technological aspects of ESI and EDiscovery. To effectively manage discovery issues, judges must understand the relevant technology at a level that allows effective communication with attorneys, parties, and experts. As important as judicial education in new technologies is that of counsel education. If lawyers do not get a handle on E-Discovery and ESI issues early in the case, or do not manage E-Discovery processes well, the consequences can be disastrous to the client and counsel.32 Handling Disputes Armed with the powers that are provided in the new Rules and Practice Directions, assisted by checklists and questionnaires and with a good working knowledge of the various technologies and technological solutions that are available the Judge is equipped to deal



See Re Fannie Mae Litigation No.08-5014(D.C.D.C2009) discussed in Gene Albert “E-Discovery: How to Do it Wrong (and Right!)” (last accessed 7 August 2013). 22

with concerns that the parties to litigation may have about the scope, extent or methodology of E-Discovery. Because of the powers that Judges have to manage the process of discovery, dispute resolution need not be confined to the Courtroom but may take place at Case Conference level – a careful, surgical and penetrating enquiry by the judge into the various steps that counsel may or may not have taken to fulfil their obligations, all conducted against the backdrop of reasonableness and proportionality. The E-Discovery Reference Model discussed above illustrates some of the main stages where careful inquiry may avoid unnecessary, expensive and time consuming Court hearings. It could help Judges identify where errors may be taking place in the discovery process and why it is that disputes are arising. It increases judicial awareness of what process the lawyers should undertake in E-Discovery. Judicial Approaches to Stages in the E-Discovery Process I want to examine three areas where Judges can avoid, manage or decide on disputes and how technology can assist. These areas are Early Case Assessment, Document Custodians and Aspects of Keyword Searching. I will close this section with a summary of a possible agenda for a Case Management Conference. I hasten to emphasise that the technologies discussed are not necessarily endorsed and are used for illustrative purposes only. There are many E-Discovery technologies available on the market and address different aspects of the process. While it is not necessary for Judges to be aware of specific brands, there must be an awareness of the technological concepts, process and science that underpins the various products. 1. Early Case Assessment The process of coming to grips with the discovery implications of a case early is sometimes called 'early case assessment' (ECA). As part of the early case assessment process, counsel will identify what discovery is needed, identify key witnesses and data custodians, construct factual timelines and determine the strengths and weaknesses of the case. In the United States such assessment is done in the first 60-120 days of a case and communicated in various forms with the client, opposing counsel and the judge. The objective of this proactive approach is to a) b) c) d) develop an early strategy for the case, realistically evaluate the case, determine the cost and budget to prosecute or defend, and identify business practices that might be modified to minimize litigation exposure in the future.


“Early” means (in addition to its more generally accepted meanings) any point at which a party’s decision-making will radically affect the scale and cost of what you do later – that is, it ought to be a continuous process in which “early” means “not too late”.33 Chris Dale considers that ECA is an intellectual task rather than a technological one. “* W]e see too much plodding from A to B without application of mind to the objective of clients or courts. E-Discovery is not a specialist science – it may involve new skills, but it is no more (and no less) than the discovery of evidence required by the rules.”34 Every consideration of E-Discovery must be achieved through the Rules and must accord with legal principle. At the same time there are occasions when technology is of considerable assistance in the ECA phase of a proceeding. Early Case Assessment Technologies Early Case Assessment is less about categorization and more about search. Not all documents need to be classified and categorized as part of a disclosure process; a party only needs to find the relevant documents to justify its case and reach a favourable settlement. The problem is that a party does not always know which words or issues to look for. ECA tools quickly gather, de-duplicate and search ESI as a first pass to provide and early analysis of the amount and content of ESI. A party does not need to classify all documents or reduce the document set, but can just focus on finding the relevant documents and analyze these. With the right search tools, a party can ignore the rest – at least for the time being. Forensic-based approaches to E-Discovery may provide the ability to conduct advanced searches for relevant ESI before collection allowing counsel to conduct a focussed early case assessment. With a proper ECA counsel may preview the available evidence, analyze merits of the case, develop a strategy and effectively negotiate search criteria with opposing counsel during the meet and confer process, thus fulfilling the objective of effective co-operation and discussion. Key criteria for an ECA solution include the potential to:

Chris Dale “Digital Reef Panel at the Masters Conference – Early Case Assessment: is it working?” EDisclosure Information Project 30 October 2011 (last accessed 7 August 2011). 34 Ibid. 24

1. Gain insight and understanding of potential keywords, volumes of data and costs to eliminate the collection and processing of non-relevant data. 2. Test search criteria and analyze document responsiveness before data is collected. 3. Identify custodians with potentially relevant data that should get a legal hold notice. 4. Formulate a comprehensive case strategy and ensure business processes are minimally disrupted. 5. Identify potentially relevant data sources and get metrics on potentially relevant data versus total data volume. 6. Sample and test search criteria and privilege criteria before data is produced to opposing counsel.35

Having access to this data as soon as possible can enable litigants to make informed decisions about case progress at the earliest stages of a case, reducing risk and cost across their eDiscovery processes before investing significant time and money into the matter. There are many aspects and levels of sophistication in the tools that are available for ECA. Once again, issues of reasonableness and proportionality will come to the fore. For example some ECA technologies perform data analytics and generate reports that show custodian names, date ranges, email domains, key concepts and other insights into a large data set. The data analysis and reports can be used by counsel to make decisions regarding next steps for their case. Predictive Coding technologies are designed to provide a faster way to separate potentially responsive from non-responsive documents by applying document review decisions made on a subset of documents across a larger data set. On the surface, data analytics and predictive coding sound like they will save money and time. However there are potential problems in applying these solutions. For example, Predictive Coding technologies often save the most money and time only after clients spend a lot of money on upfront ESI processing. The elaborate data analytic reports created with Early Case Assessment technologies are usually available only after the data has been processed at a high per GB rate. Predictive Coding works best if litigants skip traditional culling methods such as keyword searching and date range filtering that might shrink the data set prior to higher cost processes. Because Predictive Coding costs are typically calculated based on the size of the data set, skipping the data culling steps will keep the data set large and the processing costs high.

Patrick Zeller “Early case assessment – What you don’t know can (and likely will) hurt you” Inside Counsel 12 August 2011 (last accessed 7 August 2013). 25

The size and composition of data sets involved in litigation can often be a reliable indicator of the time and monetary risk involved in defending or settling the case. Most ECA software now works on the model of significantly reduced rates to ingest data into their ECA platform. Inside that platform you can then learn what is there, but then look to cull and filter information to get down to the information you really want, thus reducing the GB rates significantly going forward. To reduce Predictive Coding costs, just the 'text' from files can be used to reduce the per GB rate of having to process the full size of the files - this can considerable reduce costs. The important point is that in coming to an E-Discovery dispute a judge is going to have to be aware of the various technologies that may be available for ECA and evaluate a party’s compliance, taking into account reasonableness and proportionality. 2. Document Custodians36 An aspect of the Digital Paradigm is that information may be spread across a number of locations and upon hundreds of devices in an organisation. The larger the organisation, the greater the level of complexity in ascertaining who has what. An important part of the answer to this problem lies in a proper and effective document management system within an organisation. An ESI Content Map is a report of an organization's electronic data sources for use as a litigation management tool and may address differing approaches to document management in an organisation. It will include the names of custodians, the type of information included, backup policy, location and other information helpful in determining if a repository is reasonably accessible for legal purposes. The map should include understandable information that counsel needs to competently identify, preserve and collect ESI required for discovery related to litigation or a governmental investigation. Additionally, a well-maintained ESI content map can help counsel demonstrate that a company has been proactive regarding its discovery obligations.


I am grateful to Gene Albert and his very helpful paper E-Discovery: How to Do it Wrong (and Right!) – see above n. 21. 26

Discovery Volume An important part of early case assessment is to determine how much potentially discoverable ESI exists, how much is reasonably assessable, and the volume of page equivalents to deal with once a review begins. Attorney review costs are primarily page and document driven. A surprising number of page equivalents can exist on drives and storage media like CDs, DVDs and flash drives.


An increasingly popular technique is to do a quick analysis of what is in an ESI collection. As mentioned above, it is critical to understand early on in an E-Discovery project how much work must be done to be able to properly staff and construct accurate project timelines. Clients also require budget estimates and need to be able to make review decisions, and determine whether and how to proceed with litigation, with overall costs in mind.


Raw or partially processed ESI can be analyzed relatively inexpensively (compared with full ESI processing) to obtain the following information early in the process as a 'Quick ESI Analysis":   What is the approximate distribution of file types in the data collection? What is the approximate distribution of file dates in the collection? Discovery productions are often limited by file creation dates and this can show how the data collected will be reduced by date limitations. What persons are identified as authors in the files (from email and file metadata)? This shows if the collection identifies custodians that have not previously been identified, of if previously suggests custodians are represented in the data collected to date. How many pages are likely to be converted from the data collected?

3. Keyword Searching Like all technologies, keyword searching has it place and purpose in the overall scheme of EDiscovery. A court should look carefully at whether keyword searching, particularly in big cases, is appropriate and whether more sophisticated techniques and software should be used. Judges should not decide on keywords without evidence of the number of “hits” particular terms throw up.37 The UK Practice Direction warns against the dangers of keyword searching. In “10 Key EDiscovery Issues in 2011”38 David Lender and Magistrate Judge Andrew Peck observed: “Following on decisions by Magistrate Judges Facciola and Grimm, Judge Peck’s decision in William A. Gross Construction Assoc. v. American Manufacturers Mutual Ins. Co., 256 F.R.D. 134, 134, 136 (S.D.N.Y. 2009) (Peck, M.J.), constituted a “wake up” call to the Bar, as follows: This Opinion should serve as a wake-up call to the Bar in this District about the need for careful thought, quality control, testing, and cooperation with opposing counsel in designing search terms or “keywords” to be used to produce emails or other electronically stored information (“ESI”) … … Electronic discovery requires cooperation between opposing counsel and transparency in all aspects of preservation and production of ESI. Moreover, where counsel are using keyword searches for retrieval of ESI, they at a

See William A. Gross Constr. Assocs.. Inc. v. American Mfrs. Mut. Ins. Co. (No. 07 Civ. 10639, 2009 WL 724954 (S.D.N.Y. March 19, 2009)). 38 Above n. 14. 29

minimum must carefully craft the appropriate keywords, with input from the ESI’s custodians as to the words and abbreviations they use, and the proposed methodology must be quality control tested to assure accuracy in retrieval and elimination of “false positives.” It is time that the Bar – even those lawyers who did not come of age in the computer era – understand this.” Even if the steps suggested in the William A. Gross decision are followed, keyword searching will produce less than 50% of responsive ESI. There are more sophisticated search tools available, such as clustering and concept searching techniques instead of or in combination with keyword searches that may be considered. We are not aware of any published judicial decision addressing these tools …” With this strong caution in mind, keyword searches may still be helpful, especially at the ECA phase of litigation. How can a party go about doing better than just brainstorming keyword terms? A mixed approach should be undertaken, sampling and testing returns for different proposed search criteria. This provides a quantitative approach to estimate how many documents will be returned with different keywords. The next step is to take a sample of the returned disputed keywords and determine, through manual review, the percentage of relevant documents brought back with the search. This approach involves the construction of superior search keywords through an iterative methodology of keyword searches on a representative sample and then manual review of returned documents from the sample to develop an expanded list of keywords. An approach like this helps to give magistrates and judges a better basis to include or exclude disputed search terms. In William A. Gross Constr. Assocs.. Inc. v. American Mfrs. Mut. Ins. Co.39 the magistrate judge complained that he was in the "uncomfortable position" of having to construct a search term methodology without sufficient input from the parties or the relevant custodian. He ruled that in addition to DASNY's proposed terms, the search should incorporate the names of the parties' personnel involved in the courthouse project, but rejected a much expanded keyword list without more justification. He criticized the parties search term methodology as "just the latest example of lawyers designing keyword searches in the dark." All keyword searches are not of like quality. Judge Paul Grimm recently wrote "while it is universally acknowledged that keyword searches are useful tools for search and retrieval of ESI, all keyword searches are not created equal; and there is a growing body of literature that highlights the risks associated with conducting an


Above n. 27 30

unreliable or inadequate keyword search or relying exclusively on such searches for privilege review."40 Keywords are often negotiated very early in the case. But as the case evolves new issues and keywords inevitably will be identified. As this will involve more expense for the responding party, going back and negotiating more keywords may be difficult. Before allowing this without consent a court may want to know why proposed keyword additions were not identified earlier. This supports the importance of the iterative process of sampling and an early case assessment to understand the case issues and potential case keywords as early as possible. "[F]or lawyers and judges to dare opine that a certain search term or terms would be more likely to produce information than the terms that were used is truly to go where angels fear to tread. This topic is clearly beyond the ken of a layman and requires that any such conclusion be based on evidence that, for example, meets the criteria of Rule 702 of the Federal Rules of Evidence."41 This thinking suggests that there may need to be greater use of experts in the area of keyword validation and the resulting Daubert challenges as part of cases involving disputed E-Discovery methodology. Thus we have a situation where rather than reducing disputed hearings arguments about keyword searches, the construction of a keyword search becomes a specific form of dispute. This results in Court ordered keyword search parameters based on expert evidence of a highly technological nature. The only input from the parties is from an adversarial position and although the result may well be a compromise it may still not achieve the ultimate goal of locating relevant documents within the reasonable and proportional requirements. Indeed, one wonders whether, in light of other more defined search techniques, an evidence based dispute about the parameters or definitions of a keyword search may indeed be reasonable and proportionate. The rules require a co-operative approach by counsel and this should be encouraged at Conference level rather than allowing the matter to escalate to a hearing about the parameters of a keyword search.

40 41

Victor Stanley. Inc. v. Creative Pipe. Inc.. 250 F.R.D. at 251, 256-57(D. Md. 2008) United States v. O'Keefe, 537 F. Supp. 2d 14, 24 (D.D.C. 2008) 31

Agenda Items for a Case Conference Early party agreements on E-Discovery issues are an essential element of all E-Discovery systems under consideration in this paper. This starts with the co-operative meet and confer requirements and extending to the “discovery plan,” the consent memorandum relating to discovery or, in the US, the discussion with the Court at the Rule 16 Conference. Courts are expected, and in my view are obliged, to facilitate agreements and manage and resolve – discovery disputes involving ESI where needed. Resolution is much more effectively achieved at the case conference level that embarking upon a hearing which may have the effect of stalling the proceedings.42 Parties are often unable to agree on meaningful E-Discovery arrangements at an early stage. This is where early case assessment comes in and where early judicial management can be an advantage.

Other Case Management Topics for Discussion


In the US Rule 16(b), as amended, speaks of reviewing “any issues about disclosure or discovery of *ESI+ and courts have ordered parties to engage in “cooperative discussion to facilitate a logical discovery flow” to ensure that discovery is proportional to the specific circumstances of *a+ case.”


Topics can include some or all of the following, depending on the case:          Scope and extent of ESI anticipated to be sought Steps to preserve potentially relevant information Anticipated numbers of custodians and sources other than active data Identification of “inaccessible” sources Search methodology The “form or forms” to be used for production Privilege logs Plans for managing post-production claims Timing (including phasing) of discovery

This is addressed in England and New Zealand by the Questionnaire/Checklist and in New Zealand Courts expect party agreements on key issues. The prime directive lies in The Sedona Principles which urge parties and their counsel to address the matter by cooperative efforts, as reinforced by the Sedona Conference Cooperation Proclamation, which challenges parties to adopt a culture of cooperation in discovery.43 Conclusion The court has a role to play in assisting parties with the discovery exercise. The court is in a good position to stand back and take a non-partisan view of what is reasonable and proportionate. Its role is to help the parties frame a reasonable and proportionate search and if necessary rule on it. In order to do this the court needs to be asking questions about the date range of the issues, who the key custodians of documents are, what sort of documents or media are the most important, how accessible the documents are, and how much will it cost to get at those that are not readily accessible. The key stages in the disclosure process where the parties are most likely to seek the court’s guidance in resolving a particular dispute are as follows: 1. Less is more – where the party with the most to disclose is require to disclose as much as possible by the party who has the least to disclose. Master Whitaker suggests a staged approach and a narrowing of the search as much as possible after considering the component parts of the search regime.44 2. Agree upon a search methodology – this is where aspects of an understanding of the technology by judges and lawyers comes to the fore. It is at this stage that there will possibly be disputes about keywords or whether more sophisticated search methods like predictive coding should be used.


Sedona Conference Co-Operation Proclamation July 2008 (last accessed 10 August 2013) 44 Steven Whitaker “International Developments in E-Discovery” above n.10. 33

3. In considering what technology should be used, the issue of whether a particular method is reasonable and proportionate and whether review should be restricted to a corpus of documents When it comes to a hearing the enquiry must be limited and focussed. A careful and critical analysis of the issues raised by the pleadings must be the first port of call for the judge in considering what discovery orders should be made. Two recent decisions of Asher J in New Zealand45 emphasise the importance of a disciplined and focussed approach by both judge and counsel. Although the cases do not involve E-Discovery technologies the focussed approach on issues raised by the pleadings informed by the fundamental principles of reasonableness and proportionality makes it clear how discovery disputes should be handled. The nature of information in the Digital Paradigm forces us to approach discovery in a paradigmatically different way from what went before. The Rules of Court provide a framework within which discovery may take place. The Rules reflect the need for flexibility of approach. Given the importance of co-operation and consultation, reasonableness and proportionality and the requirements for case management conferences and judicial supervision this paper has argued that there is a greater need for judicial activism throughout the discovery process. No longer can Judges consider themselves to be like cuckoos in a clock, popping out to deliver a decision and then retiring to await the next dispute. In a time of paradigmatic change, judicial behaviour must itself be paradigmatically different. There is scope for this within the various rule systems for E-Discovery. It is up to Judges to grasp the opportunity and become involved at all stages of the process in an active, creative and purposeful manner.


Intercity Group (NZ) Limited v Nakedbus NZ Limited [2013] NZHC 1054; Commerce Commission v Cathay Pacific Airways Ltd [2012] NZHC 726. The same same staged and rigorous analysis was adopted by Master Whitaker in Goodale v Ministry of Justice [2009] EWHC B41 (QB) 34

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