The Practice Direction to Part 31 of the Civil Procedure Rules says that parties should, prior to the first Case Management Conference, discuss any issues that may arise regarding searches for electronic documents. In Digicel (St. Lucia) Ltd v Cable & Wireless Plc [2008] EWHC 2522 (Ch), decided by Morgan J in the Chancery Division on 23 October 2008, the parties failed to take this step. The result was that the defendants were directed to carry out a very costly document-gathering exercise for a second time.
Basis of dispute
The claimants were mobile phone companies operating in seven jurisdictions in the Caribbean. In the period 2001 to 2006 the telecommunications markets in the various jurisdictions were liberalised, and the claimants sought to set up mobile phone businesses. Their case was that five subsidiaries of Cable & Wireless and one other company had deliberately delayed providing interconnectivity with their own networks, and they claimed damages for breach of statutory duty and conspiracy to injure by unlawful means. The Amended Particulars of Claim ran to more than 320 pages, and the Amended Defence ran to more than 830 pages.
On 6 February 2008 Lindsay J ordered each party to give standard disclosure by list, by 27 June 2008. At that hearing there was no discussion of any particular points relating to disclosure.
The defendants served their signed list of documents on 17 July 2008. Their solicitors stated in the list that, as regards electronic documents, there was no central electronic archive or repository for the defendants’ electronic documents and there was no single approach between the defendants as to the management and storage of electronic documents. The defendants had carried out electronic searches in the Caribbean jurisdictions by using ten key words: Digicel, interconnect, interconnection, licence, liberalise, liberalisation, strategy, competing, competitor, competition. The electronic searches in London included all documents containing one or more key words which included the key words used in the Caribbean together with these further key words: Caribbean, CWWI, Jamaica and West Indies. The defendants’ list stated that no search had been made for documents stored on back-up tapes before the current proceedings began. The list stated that back-up tape restoration would have been disproportionate due to the significant time and costs involved.
The claimants contended that the defendants’ disclosure had been deficient in a number of respects and applied for an order for specific disclosure under CPR 31.12:
- the defendants should have searched back-up tapes as well as live e-mail accounts
- the defendants had searched against too few key words
- the defendants should have had searched in the e-mail accounts of a number of additional employees.
The judge was given a detailed account of the manner in which the defendants had carried out the search for documents. Owing to the absence of a central document repository, it had been necessary to carry out the key word searches for each of the various jurisdictions in situ, amongst other places in the e-mail accounts of 85 individuals. The defendants’ solicitors arranged for the documents to be stored in a database, and (following de-duplication and other processes) for the documents to be reviewed for relevance, in an exercise which took some 6,700 hours of lawyers’ time. By this process some 1,140,000 documents were reduced to 5,212 documents disclosed in the defendants’ list, comprising 28,983 pages and 83 lever-arch files. Assembling the documents for disclosure cost some £2 million in legal fees, together with disbursements of some £175,000.
The judge also made reference to the process carried out by the various claimants in giving disclosure, but held that it was not helpful for him to compare the methods adopted by the claimants with the methods adopted by the defendants.
Before dealing with each parties’ contentions, the judge referred to Part 31 of the Civil Procedure Rules, paragraph 2A of the Practice Direction under CPR 31 dealing with Electronic Disclosure, and the Cresswell Report (Electronic Disclosure, report of working party chaired by Cresswell J, 6 October 2004). He drew particular attention to paragraph 2A.2 of the Practice Direction, which states that the parties should at an early stage in the litigation discuss issues that may arise regarding searches for electronic documents, and paragraph 2A.5 of the Practice Direction which states that where key word searches are used they should be agreed as far as possible between the parties. Neither side paid attention to this advice. The defendants did not discuss with the claimants the issues which might arise regarding searches for electronic documents and they used key word searches which they had not agreed in advance or attempted to agree in advance with the claimants. The result was that the unilateral decisions made by the defendants’ solicitors were under challenge and needed to be scrutinised by the court.
If the court took the view that the defendants’ solicitors’ key word searches were inadequate when they were first carried out and that a wider search should have been carried out, the defendants’ solicitors’ unilateral action exposed the defendants to the risk that the court may require the exercise of searching to be done a second time, with the overall cost of two searches being significantly higher than the cost of a wider search carried out on the first occasion.
The judge referred (at [46]) to the fact that the Rules regarding standard disclosure required only a ‘reasonable’ search for relevant documents:
‘Thus, the rules do not require that no stone should be left unturned. This may mean that a relevant document, even “a smoking gun” is not found. This attitude is justified by considerations of proportionality. This point is well made by Jacob LJ in Nichia Corporation v Argos Limited [2007] EWCA Civ 741 at [50] to [52].’
The defendants resisted the application for further disclosure. Their first contention was that the question of what was ‘a reasonable search’ had to be decided in the first instance by the solicitor in charge of the disclosure process, and that, when a court is asked to review the decision made by the relevant solicitor, it should adopt a standard of review which reflects the degree of latitude given to the solicitor and the subjective character of the decision. This should lead the court to reach a conclusion different from the solicitor’s conclusion only in a case where the solicitor’s decision was outside the band of permissible reasonable decisions, alternatively, the court should adopt the approach of an appellate court reviewing an exercise of discretion.
Morgan J rejected this contention (at [51-52]). The task of deciding what is required by a reasonable search is a task given to the court by the wording of the Rules. This task can be carried out by the court either in advance of the search being done or with hindsight, where a search has been carried out and its extent is challenged by the other party.
The first question for the court was whether the defendant had carried out a reasonable search. It did not follow that the court would then order the defaulting party to carry out the search which it should initially have carried out. It was open to the court to conclude that a further search would be disproportionate as regards cost and the likelihood of revealing anything worthwhile (at [53]).
The judge went on to consider the various categories of further disclosure sought by the claimants.
Restoration of back-up tapes
The defendants opposed the application for restoration of back-up tapes. They said that they had already spent a considerable amount of time at great cost in giving the disclosure that they have given, and that the work of restoring the back-up tapes which existed would be very elaborate, beset with difficulty and with no certainty as to what could be recovered. They said that the cost of the exercise would be prohibitive, and that it was unlikely that anything very much would be found in addition to that which had already been found.
The judge held that a reasonable search had not been carried out, as the defendants had failed to search back-up tapes for e-mail accounts of various individuals. However he declined to make the order sought by the claimants:
‘69. It seems to me to be inappropriate to make a simple order that the defendants restore the identified back-up tapes so far as necessary to identify and search certain e-mail accounts. An order in those terms does not address the possibility that restoration might not be possible or that it might emerge that restoration is only possible at an utterly prohibitive level of cost. The order does not address the possibility that it might be possible to recover, say, 90% of an e-mail account with comparative ease but the remaining 10% would involve difficulty and cost of a different order and magnitude. I remind myself that the Practice Direction stresses that the parties should discuss perceived problems and cooperate in resolving them. That seems to me to provide a key to the proper way forward.
ORDER IN RELATION TO BACK-UP TAPES
70. Accordingly, in relation to the restoration of back-up tapes for the purpose of identifying and enabling a search of the e-mail accounts of the 7 individuals, I will direct, first, that the parties’ solicitors meet more or less straight away to discuss how this can best be done. This meeting can be attended by LDM on behalf of the defendants and any expert available to the claimants. The discussions at that meeting should be minuted. Following such a meeting, the defendants should embark so far as reasonably practicable upon restoration of the back-up tapes for the purpose of identifying and enabling a search of relevant e-mail accounts. I will not, at this stage, order that the defendants should permit the claimants to have an observer present at the attempts which are made but I will require that the defendants’ solicitors report to the claimants’ solicitors at relatively short intervals, say every 10 days or 2 weeks, on the rate of progress. The parties’ solicitors will be expected by the court to cooperate fully with each other, to maintain a dialogue and for there to be questions and answers passing between them as to whether anything further can be done or should be done. I will give the defendants express liberty to apply so that if the claimants continue to require that further steps are taken which the defendants say ought not to be taken then the defendants can seek appropriate direction from the court.’
Additional key word searches
The claimants identified 34 additional key words which they said the defendant should have used in their searches. This list was reduced in the course of the hearing. The judge considered each additional key word, and decided that eight of these should have been included by the defendants in a reasonable search (at [92]).
The defendants protested that a further search would have to be carried out in situ in the various territories, that further searches were likely to throw up many further documents which would be largely irrelevant, and that it would be a burdensome task to review manually so many documents. The judge nevertheless held that the defendant must carry out this task (at [94]).
E-mail accounts of additional individuals
The claimants contended that the e-mail accounts of 16 additional individuals should be searched. At [95] the judge agreed.
Conclusion
The facts of the Digicel case raise many of the points which those involved in e-disclosure exercises commonly have to deal with:
- difficulties arising from the absence of a single document repository, especially where documents are located in multiple jurisdictions
- failure by the parties’ representatives to initiate discussions before giving disclosure
- the contention that it would be disproportionate to require a second search for electronic documents
- restoration of back-up tapes
- insufficient key word searches
- searching the e-mail accounts of insufficient individuals.
These points have now been authoritatively dealt with Morgan J in a reported judgment which highlights the consequences of failing to deal with electronic disclosure in accordance with the guidance set out in the Practice Direction to CPR 31.
A working party set up by the Civil Procedure Rules Committee is preparing a Questionnaire for use by the parties in exchanging information prior to giving electronic disclosure. If this is adopted, this should help to avoid the problems which occurred in Digicel.
Clive Freedman, Barrister, 3 Verulam Buildings, and a Trustee of SCL.
