Litigation Case Management: The Impact of Electronic Evidence on Litigation Preparation and Practice
August 2, 2010
Thomas N.T. Sutton
This article is an abridged version of an article Mr. Sutton presented as Course Leader at Federated Press’ 4th E-Discovery Program: Best Practices and Procedures Relating to E-Discovery, March 1 & 2, 2010, Toronto
The electronic era continues to transform business and society and the volume of electronic information continues to grow. By one estimate, mankind created 150 exabytes (billion gigabytes) of data in 2005. It is expected that mankind will create 1,200 exabytes in 20101. For lawyers, a failure to adapt to the electronic era by developing and applying project management skills and tools to effectively work with clients to manage electronic evidence will be professionally fatal. For those who lead the way in the collection and use of electronic evidence in ways that provide value to their clients, the rewards will be significant. Similarly, clients that develop and implement electronic record management policies and practices stand to benefit the most from their counsel’s litigation project management skills through improved litigation outcomes. Litigation readiness, which includes a client’s and counsel’s ability to effectively locate, preserve and collect electronic evidence and then manage this evidence through to resolution, will have a direct impact on litigation risk assessment, litigation risk management, and litigation outcomes.
The recent amendments to the Ontario Rules of Civil Procedure have brought the litigation process more in line with the objectives and approach of litigation project management. Early case assessment, including an assessment of the parties’ evidentiary needs, is now strongly encouraged. Likewise, several of the amendments reflect a recognition that yesterday’s approach to evidence collection, disclosure and use at trial — an approach that was created when documents were largely in paper format in much smaller volumes — can no longer accommodate today’s technology.
Early Case Assessment and Planning
The objectives of project management — avoiding unnecessary expense, matching the complexity and risk of the matter to the expertise and expense of the available resources, and enhancing the control and management of costs — are meant to ensure that the means are proportionate to the ends. This proportionality principle, so essential to project management, is now enshrined in the Rules.
Rule 1.04(1.1) provides, as an overarching principle of interpretation, that the Court shall make orders and give directions that are proportionate to the importance and complexity of the issues, and the amount involved, in the proceeding. In addition to the general principle in Rule 1.04(1.1), Rule 29.2 expressly requires that proportionality be considered on all motions relating to discovery. When combined, these two Rules now require counsel, clients and the court to consider the following proportionality principles throughout the litigation process:
- whether the time required and expense to produce the information would be unreasonable in light of the importance and complexity of the issues, and the amount involved, in the proceeding (Rules 1.04(1.1) and 29.2.03(1)(a) and (b));
- whether requiring the party to produce the information would cause him or her undue prejudice balanced against the importance and complexity of the issues, and the amount involved, in the proceeding (Rules 1.04(1.1) and 29.2.03(1)(c));
- whether requiring a party to produce the information would unduly interfere with the orderly progress of the action balanced against the importance and complexity of the issues, and the amount involved, in the proceeding (Rules 1.04(1.1) and 29.2.03(1)(d));
- whether the information is readily available from other sources (Rule 29.2.03(1)(e)); and
- the volume of documentation in light of the importance and complexity of the issues, and the amount involved, in the proceeding (1.04(1.1) and 29.2.03(1)(a) and (b)).
The requirement that these principles be considered throughout the litigation process ensures that relevance is not the sole determinant of the obligation to disclose and produce. Relevance is now but one of several factors. The proportionality factors (cost of production, importance of the records, importance of the case, amount of money at issue) are more concerned with pragmatism than with legal rules. Proportionality means that, in an average case with a smaller dollar value, a party’s production obligations should be less onerous than in a case with a larger dollar value or in a case where the interests at stake are of greater importance.
This amendment should, if properly applied, provide some degree of reassurance to clients who have seen legal costs associated with litigation, and discovery in particular, skyrocket in recent years — often in extreme disproportion to the amount or issues at stake in the litigation.
The amendments to Rules 30 and 31 represent a recognition that the old "semblance of relevance" test for disclosure is no longer suited to the digital age, and that without substantive reform, access to civil litigation for individuals and corporations was at risk due to the sheer volume of electronic information that might have a "semblance of relevance." These amendments, which introduce the new standard of "relevance," will hopefully be applied in conjunction with the proportionality principles in a way that brings the litigation process into line with the business and financial realities of civil litigation. Already the court has recognized that the new standard is "stricter" than the old "semblance of relevance" test and may require an evidentiary foundation before a finding of relevance will be made2.
As was noted above, in order to determine the potential relevance of documents that may be in the possession of the client, or that may be in the possession of adverse or third parties, both counsel and client must take the time to carefully define the legal elements of the claim or defence and determine, in a general sense, what evidence will be needed to support or respond to the legal elements of the claim or defence. Once this has been done, Rules 30 and 31 provided a useful starting point for the development of a plan for the preservation, collection, review and production of relevant documents, including electronic documents.
- Who: Rule 31.06(2) requires both counsel and client to identify which individuals might reasonably be expected to have knowledge of transactions or occurrences relevant to the issues in the action. In addition to identifying the potential witnesses in the case, the document custodian list flows naturally from this Rule. Likewise, since this Rule applies to all parties, it is worthwhile identifying individuals from the other parties and non-parties to assist with the development of your own document and information requests and the eventual development of the discovery plan.
- What: Under the Rules, "document" includes a sound recording, videotape, film, photograph, chart, graph, map, survey, book of account, and data and information in electronic form (Rule 30.01(1)(a)). Every document relevant to any matter in issue in an action that is or has been in the possession, control or power of a party to the action must be disclosed (Rule 30.02(1)).
- Where: A document is be deemed to be in a party’s power if that party is entitled to obtain the original document or a copy of it and the party seeking it is not so entitled (Rule 30.01(1)b)) and relevant documents in the possession, control or power of the party’s subsidiary or affiliated corporation or corporation controlled directly or indirectly by the party (Rule 30.02(4)). Having determined the "who, what and where," counsel and client can now begin planning the preservation, collection, review and production process, including issues such as staffing and the retainer of third-party consultants, if necessary.
c) Discovery Plans
The addition of the discovery plan requirement marks an important development in the Rules that, depending on the conduct of counsel and the approach of the court over the next several years, could fundamentally change the cost-effectiveness of civil litigation in Ontario. If this process works as intended, the overuse, and occasional tactical misuse, of the discovery process will be reined in and counsel will focus on producing and requesting only the evidence that is material to the dispute. In particular, the discovery plan process has the potential to reduce, or at the very least, enhance, the value of the costs associated with the preservation, review and production of electronic evidence.
The discovery plan is required by Rule 29.1 and must be updated as the litigation progresses. The Rule requires that the parties agree to the following:
- The Scope of Production: The intended scope of documentary production, taking into account the relevance, costs and the importance and complexity of the issues in the particular action (Rule 30.02).
- The Process for Production: The timing, costs and manner of documentary production by the parties and any other persons with access to relevant documentation (Rule 30.04).
- The Examinations for Discovery: The names of the individuals who will be produced for oral examination for discovery and information respecting the timing and length of the examinations (Rule 31).
- Other Forms of Discovery: Where applicable, a plan for the inspection of property (Rule 32) and/or medical examinations (Rule 33).
- Other Factors: Any other information intended to result in the expeditious and cost-effective completion of the discovery process that is disproportionate to the importance and complexity of the action.
A model discovery agreement has been drafted by the Ontario E-Discovery Implementation Committee (EIC); it can be found at http://www.oba.org/en/publicaffairs_en/E-discovery/model_precendents.aspx.
The discovery plan requirement provides an important early opportunity for the parties to meet and engage in a discussion about the issues and what documents and other information are truly required to either resolve or litigate the dispute. Assuming counsel can co-operate, there are many foreseeable benefits to this process. For example, many of the documentary and other requests traditionally made at examinations for discovery often required undertakings. The discovery plan process now provides an opportunity for these requests to be made well in advance of the examinations. This provides counsel with an opportunity to consider the feasibility of the request (i.e., is the request proportionate) and ensure that relevant documents are produced before the examinations for discovery take place. Likewise, the discovery plan process provides counsel with an opportunity to discuss why particular types of documents or documents in the possession of a particular custodian may or may not be relevant. This has the potential of streamlining the production process by allowing the parties to focus on the production of specific documents from specific "high-value" custodians, while at the same time ensuring that relevant documents that may be in the possession or control of peripheral custodians are preserved in the event that it is necessary to review their collections.
Beyond the inherent value of cooperating with counsel to develop a plan for the litigation, a failure to plan also carries procedural consequences. Where the parties fail to either agree to a plan or update the plan in the face of changed circumstances, the court has the discretion to refuse to grant any discovery relief and may award costs against obstructive parties.
Lastly, and perhaps most importantly, Rule 29.1 also requires that the parties consult and have regard to the Sedona Canada Principles of Addressing Electronic Discovery. This represents an important recognition that electronic evidence is no longer something that is only engaged in a few cases. It is now essential and expected that counsel and clients will plan for the preservation, review and production of electronic evidence. As is discussed below, for the parties to be able to comply with this requirement, the parties and their counsel must first, on their own, answer several key questions relating to electronic evidence before meeting opposing counsel to devise a discovery plan.
Litigation Project Management and Electronic Evidence
Because the growth of electronic documents and communications happened so quickly, and often in an organic as opposed to a structured way, counsel and clients have often been ill-equipped, both organizationally and conceptually, to efficiently locate, cull and review the electronic documents. Some counsel and clients have adapted or are adapting. Yet, despite these efforts, the sheer size of the document collections that need to be reviewed for relevance, privilege, confidentiality and privacy continues to pose a mounting challenge. The key to meeting this challenge is early and effective project management.
As was noted by the Honourable Coulter Osborne in the Civil Justice Reform Project Report, there are four key issues relating to electronic evidence:
- Scope: When fulfilling an obligation to search and disclose documents, to what extent must a party search for and disclose information found in all electronic sources?
- Preservation: What measures should parties involved in litigation, or imminent litigation, follow to ensure that all relevant electronic data is preserved to avoid subsequent potential tort litigation (i.e., allegations of spoliation)?
- Review: What procedures should be adopted to review, efficiently and cost-effectively, electronic documents to determine which documents are relevant and which are not?
- Production: Under what circumstances should parties produce documents electronically (rather than in hard copy)? In what electronic format should they be produced? Should documents in hard copy be produced electronically3?
As was noted above, early case assessment allows both counsel and client to define the client’s objectives, define the legal issues in the case, and determine, in a general sense, what evidence will be needed. This information provides the context in which counsel and client can then determine what steps will be necessary and proportionate to deal with these four issues. A helpful Annotated E-Discovery Checklist (with suggestions on how to minimize e-discovery costs), drafted by the Ontario EIC, can be found at http://www.oba.org/en/publicaffairs_en/E-discovery/model_precedents.aspx
Determining the "who, what, where" for the preservation, collection, review and production of relevant documents is the lawyer’s responsibility, but the source of the information needed to answer the "who, what, where" is the client. For electronic evidence, it is essential that counsel understands, certainly in advance of agreeing to a discovery plan, but ideally at the outset of or before litigation strikes, the client’s business and how it manages its paper and electronic documents.
For external counsel, the nature of electronic evidence reinforces the need to "know your client." Unless the client is retaining your firm as counsel for the first time, it is not good client service to get to know the operational side of your client’s business after litigation has commenced. In the electronic age, external litigation counsel must:
- understand the client’s approach to document creation, storage, recovery and review;
- understand the client’s approach to litigation preparedness and management;
- have an internal team structure in place to ensure continuity and institutional memory about the client’s approach to documents and litigation preparedness and management; and
- regularly ask about the client’s objectives, expectations and plans in these areas, listen and provide insight and experience, provide advice to the client, and configure legal services accordingly and build on this shared knowledge once litigation has commenced.
McCarthy Tétrault Notes
Clearly there is no "one-size-fits-all" solution. The work plan and the discovery plan will depend on a number of factors, including the importance and complexity of the legal issues, the amount involved, the reputational or business risks involved, privacy concerns and other client goals.
When combined with litigation project management skills and tools, the recent amendments to the Rules present an opportunity to rein in skyrocketing litigation costs and bring all counsel in line with the electronic era. Whether clients receive the full benefit of these amendments depends on the extent to which they take the opportunity (and assistance, where needed, from external counsel) to consider their discovery strategy and approach to document management in general. Those that do should expect to see some of the cost savings and efficiencies the amendments were designed to achieve.
1 The Economist, February 25, 2010, "The Data Deluge"
2In Pederson v. Shtulberg, 2010 ONSC 335 (S.C.), Master Muir stated that the new test should be "stricter" than the old one and proceeded to determine relevance based upon the legal issues and a clear evidentiary foundation demonstrating relevance. It seems that simply relying on the pleadings to establish relevance, which was generally enough under the old test, will no longer be enough to establish relevance except in the clearest of cases.
3Civil Justice Reform Project Report, pages 61 to 62