2013 is well under way and some of the implementations of the Jackson Review will take effect on the most celebrated day of April, ‘All Fools Day’! Although the origins of this day may date back to the Roman festival of Hilaria, to those associated with the legal world this day is not for fools nor will it be hilarious. It will mark the official implementation day of a new Civil Procedure Rules, r 31.5 and Practice Direction 51G for managing cases and their costs, with a significant emphasis on proportionality.
The New Legal Process
Budgets, a report on disclosure and inter-party discussions on disclosure will now be required. Budgeting is not new, but the prescribed form has previously been used only in a limited pilot scheme before. Inter-party discussions were first emphasised in relation to electronic documents in Practice Direction 31B. Reporting on a proposed disclosure plan is new as is the menu of disclosure options menu. Following the rule changes, you will need to consider disclosure much earlier in the process than before, co-operate with your opponents far more than at present and work out how much it is all going to cost in detail and upfront.
The new regime requires the following:
1. Within 28 days after the service of the defence, all parties, except litigants in person, will be required to file and exchange budgets as required by a new practice direction.
2. 14 days before the first Case Management Conference, each party must file and serve a report, verified by a statement of truth, which: [1]
a. states what documents exist or may exist or may be relevant to the case;
b. describes where and with whom those documents are or may be located;
c. estimates the broad range of costs that could be involved in giving Standard Disclosure, including costs to search and disclose electronically stored documents; and
d. states which of the menu options the party is seeking under the new CPR, r 31.5(4) and how it is expected disclosure should be carried out under the new r 31.5(5).
3. Not less than 7 days before the first CMC, the parties must discuss and seek agreement on proposals for disclosure that meet the overriding objective.[2]
Further requirements may emerge as a result of directions by the court or agreements reached at the CMC.
Impact on Practice
In October 2010 the Electronic Documents Questionnaire (EDQ)[3] was introduced. Completing this questionnaire is not compulsory but the questions asked are clearly amongst those you will need to answer in order to complete the report that will now be required on disclosure.
Selecting an experienced technology partner to work with will be essential. You will need technical advice on how best to map a company’s data landscape, identify relevant documents, design the best approach to disclosure and use technology to achieve the best result in terms of quality, time and cost.
The completion of the EDQ should come first, allowing for a sound assessment to be made of what documents are or will be available, where they are, how to get to them and how much work is involved to provide the desired outcome. The EDQ provides an essential checklist for choosing an approach to disclosure, estimating the broad costs associated with it and preparing the report on how disclosure will be approached. The form of the disclosure report is not prescribed, but it will need to be carefully thought through and clearly and succinctly expressed.
Whilst it is not clear how the cost estimates required by the proposed new cost management rules and CPR, r 31.5 will interact with each other, in practice it is likely that the costs estimated in the report (which will be the later document) will reflect the element in the litigation budget allocated against disclosure.
It seems from recent case law (Sylvia Henry v News Group Newspapers Ltd [2013] EWCA Civ 19)[4] that budgets, once approved, will need to be followed or promptly varied and, if they are exceeded without approval, it is unlikely that those costs will be recovered from the other side. The key message here is that more certainty around costs is needed up-front and solicitors will need to have a reliable method of monitoring adherence to budgets. If they don’t, they will be vulnerable in the new world of costs management.
Available Orders and Directions
The current form of CPR, rr 31.5 and 31.6 set out the existing default rules for standard disclosure. A natural consequence of this approach has been that a lawyer is required to review all documents gathered in the reasonable search before handing them over.[5] The new r 31.5 provides additional menu options for disclosure orders[6] and disclosure directions,[7] to allow a more tailored approach in substantial cases.[8] There will no longer be a presumption in favour of standard disclosure. Instead, the court must decide which of the following orders to make, taking into account ‘the overriding objective and the need to limit disclosure to that which is necessary to deal with the case justly’:
- to dispense with disclosure;
- to disclose documents on which a party relies, and request any specific disclosure required from the opponent;
- to disclose documents on an issue-by-issue basis;
- for disclosure on a ‘train of enquiry’ basis (the old Peruvian Guano test);
- for standard disclosure; or
- any other order the court considers appropriate.
Keys to the Warehouse
Some of the options available for disclosure on the new menu of options have a familiar ring to them, such as issue based disclosure, which would limit the exchange of documents to those related to specific issues in dispute. A review and implementation of new rules also guarantees stirring up the proverbial hornets’ nest, and menu option 4(f) does just that; the court may make ‘any other order in relation to disclosure that the court considers appropriate’. Lord Justice Jackson has suggested that one approach might be to simply hand over the ‘key to the warehouse’ after removing privileged documents. In other words, each party hands over all its documents and the other side can choose which ones it wishes to use. This is the opposite of standard disclosure, which requires each party to examine its own documents and (in effect) to pick out the ones that it thinks will help or hinder either side.[9]
This ‘keys to the warehouse’ approach is used in the US for specific cases and was recently discussed in the Review of Disclosure in Criminal Proceedings.[10] It was rejected for criminal proceedings because of the likelihood that it would increase legal aid costs. However, Lord Justice Jackson makes it clear that it is an option to consider an approach in which ‘…each party devotes its resources to selecting what it regards as helpful from the other side’s store of documents’.[11] The idea has seen some acceptance in the UK and, according to Lord Justice Jackson, has been used in the Technology & Construction Court. The power of modern search and review technology makes this approach attractive in an appropriate case.
New Technology’s Role
Technology Assisted Review (TAR), Intelligent Review Technology and Predictive Coding are all different names for technologies which have emerged recently and which learn from the decisions reviewers are making on documents, and apply that learning for the analysis of other documents. These technologies are utilised to unlock key insights into a case earlier, drive efficiency and accuracy in the review process and reduce the time spent on human document review.
This is no small subject but there is one aspect of this new technology that has the potential to work with the new CPR, r 35.5(4)(f) and that is Intelligent Categorisation (IC), which automatically identifies and categorises the documents that are most likely to be relevant to a case. There are generally four steps to this process prior to any documents being produced to another party:
1. Train: Lawyers designated as ‘trainers’ review a sample of documents (‘the training documents’) and determine whether they are responsive, privileged or belong to some other pre-defined category.
2. Learn: The Intelligent Categorisation technology analyses reviewer decisions to identify and bring forward documents that are most likely relevant and suggests categories for documents not yet reviewed.
3. Evaluate: The Intelligent Categorisation technology produces analytic reports which determine whether a statistical confidence threshold has been reached.
4. Validate: A sample of the automatically reviewed documents is reviewed for quality control.
The sample of documents (whether selected by the technology or lawyers) is evaluated and reviewed by lawyers and the technology will, based on the categories applied, suggest the most appropriate categories to apply to remaining and unreviewed documents. The evaluation and validation of a sample provide the quality control.
In the new era for high level litigation, the expense of traditional, linear (ie item by item) document review has become economically impractical and this is the driving force behind the development and adoption of new technologies like this. Such technology also helps in accurate budgeting and creates a trail to justify revision should it be necessary.
Let Technology Take Some of the Burden
Lawyers will undoubtedly wish to assess documents before handing them over to other parties and exclude privileged material, something Lord Justice Jackson acknowledges in his implementation lecture.
Technology can assist with the identification of privileged documents. Keyword searching can be carried out prior to review and further checks can be carried out in an Early Data Assessment Database, but what then?
Where parties have agreed to review their own documents and propose using Technology Assisted Review etc to reduce the burden and costs, they might hand over a limited set of training documents to the other side after they have been reviewed, rather than the keys to the whole warehouse. If you choose to use these technologies to select documents that support the other side’s case, your approach might come under attack, so to ensure defensibility you could show the other side the training documents so they can confirm the composition of the sample set and that the categorisations made by human trainers are reliable.
Alternatively, parties may simply agree to hand over the keys to their entire warehouse of documents. Once you have the other party’s warehouse of documents, it is up to you to use whatever means you have to find the relevant documents quickly. There is no requirement to produce them to the other side until you reach the stage where trial bundles are created for the court. You might therefore agree with the other side to use Technology Assisted Review, Intelligent Review Technology or Predictive Coding to do this and collaborate on how to calibrate the technology to ensure a result both sides can rely on. Initially, you would need to agree on how to create the training document set. After that, human reviewers would read the training set and mark documents as privileged or relevant. One approach to ensure neutrality might be to use an outsourced document review provider to carry out this review.
Once the parties agree that the human review on the training set has been conducted with the right degree of accuracy then the technology could automatically apply their thinking to the whole warehouse of documents and suggest which documents are relevant and disclosable, subject of course to human quality control. The benefit of an approach like this is likely to be significant cost savings as the documents will need to be reviewed only once and not by both sides for disclosure and technology will be able to bear the burden of much of the review work. Of course, the process of analysing documents to build your own case is another matter and each party can decide how best to do that. If privileged documents are found when documents are handed over to the other side (whether that is a training set or the whole warehouse) despite the use of keywords to filter them out prior to the documents being reviewed, a claw back agreement should be put in place ensuring that the documents remain privileged in the event of inadvertent disclosure.
Keys to Success
Openness and increased collaboration between opposing parties’ representatives will be key in this new transparent and cost-controlled disclosure regime and will be essential if Technology Assisted Review etc is to be used effectively and defensibly.
James Morrey-Jones is a Discovery Services Consultant at Kroll Ontrack. Tracey Stretton is a Legal Consultant at Kroll Ontrack. Mark Surguy is a Partner at Eversheds.
[1] CPR, r 31.5(3)(a)
[2] CPR, r 31.5(3)(b)
[3] Practice Direction 31B, para 10
[4] In this case, the Costs Judge disallowed costs which exceeded the budget. Although the Court of Appeal over-ruled this decision given the circumstances of the case, it noted the following in relation to the new cost management rules expected to be introduced in April: ‘Read as a whole they lay greater emphasis on the importance of the approved or agreed budget as providing a prima facie limit on the amount of recoverable costs. In those circumstances, although the court will still have the power to depart from the approved or agreed budget if it is satisfied that there is good reason to do so, and may for that purpose take into consideration all the circumstances of the case, I should expect it to place particular emphasis on the function of the budget as imposing a limit on recoverable costs.’
[5] CPR, r 31.7
[6] CPR, r 31.5(4)
[7] CPR, r 31.5(5)
[8] Jackson, Rupert, Review of Civil Litigation Costs, December 2009 at Chapter 27, p 277 and 2.6
[9] Jackson, Lord Justice, Controlling the Costs of Disclosure, Seventh Lecture in the Implementation Programme, The LexisNexis Conference on Avoiding the Resolving Construction Disputes, 24 November 2011 at 4.7
[10] Lord Justice Gross, September 2011 at 135
[11] Jackson, Lord Justice, Controlling the Costs of Disclosure, Seventh Lecture in the Implementation Programme, The LexisNexis Conference on Avoiding the Resolving Construction Disputes, 24 November 2011 at 4.7
