The Perfect e-Discovery Solution?

The process of preserving, collecting, reviewing, and producing records is imperfect. Until all information is solely electronic and is automatically classified when created, it always will be.

Theoretically, considering that upwards of 98% of all information is electronic, it should be possible to find each and every relevant record. However, the ever-increasing volume of digital data continues to outpace our ability to efficiently and accurately deal with this information. The reality of limited time and money demands that parties compromise and accept discovery imperfection.

The problem is well documented: The amount of information subject to discovery in litigation continues to grow at almost unfathomable rates as individuals and corporations generate staggering volumes of information. In 2010, approximately 32 billion non-spam e-mails were sent every day — as compared with the 171 billion pieces of mail delivered by the U.S. Postal Service during all of 2010. In addition, social media posts, status updates, tweets, and blogs, produced from data sources such pads, pods, and clouds, all contribute to this ever increasing mass of information.

The time, burden, and costs associated with identifying and producing relevant records from mountains of information is swamping traditional discovery budgets and holding litigants in an expensive dilemma. Further complicating matters, this problem is expected to be solved in the same amount of time it took to produce documents back in the paper days.

There have been many methods developed over the years to “perfect” the e-Discovery process, such as custodian-directed collection, iterative search terms, early case-assessment, visualization, concept clustering and the newest kid on the block, predictive coding. Each of these methods has its own benefits and risks, but none produce a perfect result.

No matter how reasonable the efforts, how cooperative counsel are, or how advanced the technology is, litigants must understand that some documents will be withheld that are not privileged, some privileged documents may get produced, and some relevant documents may never see the light of day.

This is not a new problem. When paper files ruled the world, the challenge was finding critical documents that existed only within a multitude of storage boxes in some dusty warehouse. Today, the problem is almost the reverse: the chance of any single document getting lost is very small. However, having all that digital information at hand results in documents getting lost in plain sight.

Since we cannot locate, collect, and produce every relevant piece of information, what should we do? Our ethical obligations are no different than they were during the days of paper discovery. Somehow, we need to balance the requirement to produce all relevant information against the practical problems of time and expense.

There are no checklists or guidelines that lead to the perfect solution. The best way to manage these imperfections is to admit they exist, take reasonable steps to reduce them, and protect clients against them by seeking agreements that address the inevitable errors. The more transparent this process is, the more likely the parties and the courts can reach reasonable solutions. Maybe someday computers will be wise enough to save us all from ourselves, but in the mean time, the issues associated with filtering down huge amounts of information to manageable pieces will require technical know-how, foresight, cooperation and patience.

Wortzman Nickle’s Training Sessions – Now Accredited by LSUC

Over the past several years, the Susans have worked with a significant number of Canada’s top law firms. Several of these firms have invited us in-house, to speak to groups of litigators and business lawyers about the perils and opportunities inherent in e-discovery, and the benefits of proper records management. Each session is 90 minutes in length. These presentations have evolved over time to keep pace with the changes in technology and approach to discovery.

We are pleased to announce that these Wortzman Nickle education programs have now been accredited by the Law Society of Upper Canada as follows:

• Our e-Discovery program has been accredited for 1 hour toward the New Member Requirement and 0.5 hours toward the Professionalism Requirement for ongoing members.
• Our 90 minute Records Management program has been accredited for 1.5 hours toward the New Member Requirement and 1 hour toward the Professionalism Requirement for ongoing members.

These time-effective and interactive sessions are ideal for a lunch meeting or firm retreat. Call us to discuss bringing these sessions to your team.

Sophisticated software can help lawyers, not replace them

On March 5^th, the New York Times published an article entitled “Armies of Expensive Lawyers, Replaced by Cheaper Software” which discussed the “new e-discovery software that can analyze millions of documents in a fraction of the time, and at a fraction of the cost consumed by human lawyers, even deducing patterns of behaviour”.   It discussed the explosion of electronically stored information, the technology used to analyze that data and how all this has disrupted the legal job market.

The article provided a clear and concise overview of the new systems available to assist legal teams.  However, the conclusion that these technologies will replace “expensive lawyers” misses the mark. All of the technologies mentioned in the article require a combination of machine and human interaction in order to operate. Humans have to “teach” the computer to identify relevant information. As with any educational process, the more highly skilled the teacher, the better the lesson will be. What the technologies will replace are lawyers working at very basic levels without a strong understanding of the case.

Although the new technologies will force lawyers to learn new ways to approach document discovery, the technologies are just one cog in the legal machine. Lawyers still need to understand the content of the documents to build their case. The new systems will help lawyers to zero in on the documents containing the relevant content.

No matter how sophisticated a computer system gets, it can’t make subjective evaluations. The legal process is not black and white – it’s ultimately based on judgement and inference. As a result, it will always require highly skilled talent.

Is Your Culling Method Reasonable?

A study conducted as part of the 2009 Legal TREC found that conducting enterprise wide automated content analysis returned significantly more relevant documents than employing traditional culling-based methodologies.

To conduct its research, ZL Technologies had two teams – one using content analysis and the other employing manual culling, search through nearly 3 million emails from more than 100 mailboxes of Enron employees.

The results found that culling by first selecting custodians and then applying keyword filters led to incomplete information upon which to base their important legal decisions. The team failed to find 84% of relevant documents and only found four employees storing relevant information. The content analysis team, however, successfully found all relevant documents and identified all 77 relevant employees.

Of course, the above results are based in part on the skill, or lack thereof, of the people who made up the culling group in developing good search terms. This was highlighted recently in Victor Stanley, Inc. v. Creative Pipe Inc. In his May 29 opinion, U.S. Chief Magistrate Judge Paul Grimm faulted the defendant’s keyword search methodology. “[W]hile it is universally acknowledged that keyword searches are useful tools for search and retrieval of [electronically stored information], all keyword searches are not created equal; and there is a growing body of literature that highlights the risks associated with conducting an unreliable or inadequate keyword search or relying exclusively on such searches for privilege review”.

While a less than 100% accurate production is obviously a concern, the test should not be perfection. Instead, the litigator should be confident that the method used in deciding how to cull documents is reasonable. While that means that some records could potentially fall through the cracks, holding one to a standard of perfection is contrary to the concept of proportionality.

Essentially, if you spend too much time being nervous about having a perfect collection and culling process, your results will not be cost-effective or practical. The process must be balanced – err on the side of caution, but with a reasonable approach.

Live From Applied Discovery’s “Understanding Proportionality”

Tuesday morning, Lexis Nexis sponsored a panel discussion on proportionality, discovery plans, and the effects that the new Ontario rules are having on the way litigation is being carried out. The panel consisted of Master Calum Macleod, Kelly Freidman of Ogilvy Renault, and our very own Susan Nickle.

Proportionality was described as one component of a set of rules designed to encourage a cultural change in the legal community. It is no longer acceptable to proceed unilaterally – parties must come together sooner and communicate more often, in order establish a real dialog and focus on the issues at the beginning of the matter, not at the end.

The new rules, and particularly the requirement for a discovery plan, are leading lawyers to develop a better understanding of technology. To be sure, most lawyers will not become techno-geeks, but it is important for lawyers to understand how electronic information is stored and where it likely resides. It is equally important for lawyers to appreciate that discovery has not changed just because documents are stored electronically – in the end, the case will hinge on same handful of documents. The only difference is that those documents will fit on a CD rather than in a banker’s box.

There were many questions from the approximately 90 people in attendance, including dialogue about  the concept of proportionality forcing litigants to think of alternative forms of proof, as some traditional forms of proof may be too cost-prohibitive.

The seminar clearly illustrated that the new rules are having an influence, and will continue to shape litigation into a more manageable, cost effective tool to resolve disputes.

The New Rules: Appealed and Appealing

 The case law continues to build under Ontario’s new Rules of Civil Procedure. Courts appear to see the appeal of not only the amendments themselves, but of the basic principles underlying those involved in discovery, proportionality and reasonableness in particular. 

The Appeal

These basic principles (in part) formed the subject matter of the recent appeal case of Wahid v. Malinovski, 2010, ONSC CanLII 3249, decided on July 7, 2010.  The court was asked to overturn the order of a Master who had ordered Wahid to provide a further Affidavit of Documents and to produce certain relevant document by a determined date. The main grounds for the appeal were that the Master misapplied Rule 29.01, that she failed to apply the “purpose and spirit of the new Rules”, that she misapprehended the evidence regarding the relevance of the requested documents, and lastly, that she failed to exercise her discretion judicially in granting an award of costs. 

The Dismissal

The court dismissed the appeal in its entirety. 

The value of this case?

In its decision, the court confirms that the amendments to the Rules do not negate pre-existing discovery obligations or judicial discretion.  

Pursuant to Rule 30.04(5), the court may at any time order production of unprivileged, relevant documents in the possession, control or power of a party…[n]one of the new Rules amendments hamstring the court’s discretion under Rule 30.04(5) to order production of documents for discovery. (para. 11) 

Further, the basic principles of fairness and efficiency in litigation, and the doctrine of proportionality continue to be endorsed by courts:  

Discovery is to facilitate settlement or, if that is not achievable, to make the trial process more efficient and fair. Concerns about discoveries being unduly long and costly, sometimes turning into fishing expeditions, have stewed in recent years:  see Osborne Report at 59. New provisions were added and certain provisions of the Rules were amended…to streamline the discovery process.” (para. 6) 

Rule 29.2.03 sets out a list of factors to be considered by a court when ordering production of unprivileged, relevant documents in the possession control or power of a party (including time, expense, prejudice, undue interference with the orderly progress of the action, availability of the information or record)…underpinning all of the factors listed in the Rule is the overriding principle of proportionality. (para. 9)

Proportionality: It’s In The Details

When making proportionality arguments in the discovery context our Courts are now requiring the details and they are willing to order litigants to provide them.

In the very recent case of Guestlogix v. Hayter, 2010 ONSC 4384 (CanLII), Guestlogix Inc. brought a motion compelling Hayter to provide electronic versions of previously-produced documents. Justice D.M. Brown required that the parties deliver supplementary materials, both evidence and statements of law, detailing the requested format of production, the reasons why Guestlogix required production in that format, and any undue burden imposed on Hayter to produce the data in that format.  Brown J. expressly endorsed the doctrine of proportionality in providing the following directions:

The parties must appreciate that my consideration of the request will be informed by the general principle of proportionality (Rule 1.04 (1.1)), as well as the more specific principles of proportionality applied to electronic discovery through the Sedona Canada principles (Rule 29.1.03(4)). Their materials should address those principles.

In a supplemental endorsement, Brown J. continued:

To those requirements, I add the requirement that the plaintiff serve and file a Proportionality Chart – Document Production, in the format set out by the Ontario E-Discovery Implementation Committee, and the defendants serve and file a responding chart.

The Ontario E-Discovery Implementation Committee precedents, located on the OBA website, continue to be excellent resources for counsel. It is interesting to see courts not only turning to them as precedents, but ordering their use by parties.

For assistance in drafting or arguing specialized motion materials on proportionality, cost-shifting, defensibility of search terms and other filters, and all other production issues, call Wortzman Nickle. We know that the success of your motion is in the details.

Production in the 21st Century – Lessons for Counsel

Recently, Master Short of the Ontario Superior Court of Justice canvassed the present state of litigation document management software and the potential difficulties that must be overcome by counsel working co-operatively. 

The Case

In Apotex Inc. v. Richter Gedeon Vegyeszeti Gyar RT, [2010] O.J. No. 2718, the defendant Ercros moved for a further and better affidavit of documents, including a particularized privilege schedule, and production of all relevant documents in the power, possession and control of the plaintiff, Apotex. 

Apotex moved for assistance in the particularization and the provision of enhanced electronic access to Ercros’ productions. Apotex alleged that the DVD originally produced by Ercros did not sufficiently describe its documents and further, that Apotex had experienced difficulty in retrieving specific documents from it. Ercros then produced its documents in a Summation Briefcase to allow Apotex to import the documents directly into its own document management software. Apotex took the position that was insufficient. 

The Decision

Master Short favoured Ercros, citing the new Rules of Civil Procedure, The Sedona Canada Principles®, and the test for proportionality. Ercros was granted the relief sought, while Apotex’s motion was dismissed. The provision of the Summation Briefcase was deemed sufficient in that Apotex had no further difficulties accessing the Ercros productions.  

Lessons Learned (and to be learned)

Noting that “there are lessons to be learned by the profession on how to deal with what are clearly problems that are contributed to by enhanced modern computing power and software”, Master Short commented favourably on counsel’s efforts in this case to fashion a sensible solution to the problems encountered. The use of electronic production to gain tactical advantage was discouraged: 

The requirement, in part arising from the “equality of arms” component of proportionality, does not mean that a party need provide a computer system to their opponents, but they do need to work together to facilitate the exchange of information and a practical production and exchange of the “bibliographic data” attached to their productions.” (para. 71) 

What does this case mean?

This case stands for a number of interesting and useful discovery propositions, including: 

• In this electronic age, a motion for a further and better affidavit of documents can be brought solely to obtain the court’s assistance in establishing the format in which electronically stored information will be produced along with the format, content and organization of information to be exchanged; (para. 73)  
• Courts expect counsel (to at least attempt) to solve their production problems in a co-operative and pragmatic fashion; (para. 42)
• Electronic production should not be used by one party to gain a tactical advantage over another; (para. 71)
• “Proportionality requires both sides to turn their minds to documents that are not in their direct possession. Often parties simply acknowledge they once had the originals of documents for which they now only retain a “file copy”. The requirement of the Form is broader. Particularly where there are corporate affiliates over which a party has the “power” to obtain copies. Whether listed in Schedule “A” or “C” such documents still need to be identified and produced, if available.” (para. 113)

Records Management and E-discovery Experts: How to Successfully Avoid Trial By Avalanche

Records management policies and e-discovery experts were in the press again in “Beware Requests for E-Discovery: Trial by avalanche set to become norm for legal tacticians”, written by Julius Melnitzer and published on Wednesday, July 7, 2010 in the Legal Post section of the National Post. Of particular interest is that this article captures the view of representatives from both the Canadian and U.S. courts. Their shared view? To save costs and time in e-discovery, companies should develop and implement defensible records management policies and hire experienced e-discovery counsel.

Both Master Calum MacLeod, a case Master for the Ontario Superior Court of Justice in Ottawa, and Judge Frank Maas, a Magistrate Judge of the U.S. District Court for the Southern District of New York, not only unanimously endorsed records management policies, but strictly warned companies of the implications of not having them.

Master Calum MacLeod cautions that such companies will be hard pressed to argue that a discovery request is unreasonable when they have no idea in terms of time and cost what is required to retrieve the information sought by the opposing party. He states:

“Companies without a protocol for managing electronically stored information are in big trouble for a number of reasons. It will cost them a fortune to respond to e-discovery requests; they’re going to have a tough time finding what they need and it will be difficult for them to raise the proportionality argument when they have no idea what’s involved in retrieving the information.”

What are the courts looking for in terms of a sound, defensible policy?  In the words of Judge Maas, “judges are looking for consistency, internal logic and transparency, and in certain cases, a retrieval policy that ensures metadata is not altered.”

With respect to e-discovery expertise, Judge Maas believes that unsophisticated companies are at the greatest risk.  He warns that:

“The difficulty is that these companies try to deal with e-discovery themselves without retaining experienced counsel, and then they end up spending far more money to salvage the situation.”

The view of these experts is that pro-active work saves time and money in e-discovery.  It’s difficult to argue with that theory.  Is your company prepared?

Proceeding With The Proportionality Principle In Mind

A recent decision of the Newfoundland and Labrador Court of Appeal has affirmed that the doctrine of proportionality is alive and well in Canadian courts and further confirms that its application is broad.

In the case of Szeto v. Dwyer 2010 NLCA 36 (CanLII), the Court of Appeal was asked to consider an interlocutory decision of a trial judge ordering answers by the plaintiffs (appellants) to certain interrogatories delivered by the defendant (respondent) in a personal injury claim. Due in part to its analysis of proportionality, the Court ultimately declined to order answers to the interrogatories.

Accepting that “the interpretation and application of a particular rule of court must be undertaken in the context of the rules as a whole and in accord with their underlying spirit and purpose,” [para 52] the court first undertook a significant review of the concepts underlying the doctrine of proportionality. The court confirmed that for rules involving discretion, in this case the rules regarding pre-trial discovery and disclosure, this includes an “application of an underlying principle of proportionality which means taking account of the appropriateness of the procedure, its cost and impact on the litigation, and its timeliness, given the nature and complexity of the litigation.” [para 53]

Although the Newfoundland and Labrador rules of court do not expressly include the doctrine of proportionality (in contrast with most of the other jurisdictions in Canada), the court confirmed that this principle is nevertheless derivable from the underlying purpose and structure of the rules and the approach to their application in the case law interpreting them. It held that the following general principles and concepts are relevant:

1.  The fundamental purpose of the rules of court is to ensure an expeditious and cost effective determination of the merits of each case that is fair to all sides;

2.  The rules cannot be interpreted selectively and in isolation but must be read in conjunction with the rules as a whole;

3.  The rules involving discovery and disclosure by their nature are inherently flexible in their operation and application. They are not intended to have invariable application in every case regardless of circumstance or to dictate a specific result in a particular case;

4.  The decisions made on procedural matters involving the exercise of discretion require a balancing of the interests of each party against the interests of the others with a view to achieving a result that is fair to all sides. 

5.  Individual rules respecting disclosure and discovery have built within them the idea that their invocation may not always be appropriate in particular circumstances. The principle of proportionality underlies the interpretation and application of these rules. The court must always consider and take account of proportionality, in the sense of the appropriateness of the procedure, its cost and impact on the litigation and its timeliness, in the context of the nature and complexity of the litigation. [para 55]

The court concluded that the principle of proportionality applies not only to the parties, but to the court exercising a discretion under the rules. In its decision, the court emphasized that the principle of proportionality has general application to rules involving discretion. It went on to caution that “a party invoking a rule, taking a position or making an application that is ultimately determined to be not in accordance with the proportionality principle should anticipate that there may be adverse costs consequences”.  [para 54]

This case then stands for the proposition that parties and their counsel must proceed with the doctrine of proportionality in mind. More significantly, it assists counsel with understanding how this doctrine may be applied by courts in the context of pre-trial discovery and disclosure.