The Devil is in the Documents

How many discovered documents are used to real advantage in mediations or trials? How much time and money is wasted on disclosure of documents that will never make a difference to the resolution of the case?

These and other questions are being addressed by the Better Resolution of Litigation Group convened by Justice Byrne SJA.  It seeks to identify problems with the conduct of litigation in the Supreme Court and to find solutions to these problems.  I convene a sub-group that has met in recent months to address Documents and Litigation.  This article expresses my personal views about current practices in relation to documents in civil litigation.

Presently, too many documents are assembled at great cost, resulting in delay and “over-disclosure”

In some cases there is no significant problem in relation to document management and disclosure.  Parties adopt sensible practices, or resolve problems in a way that accords with the objective of the civil litigation: the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense.  However, in many cases too many documents are assembled in hard copy form, electronic form or both.  The result is excessive cost and undue delay.

Why are too many documents assembled?

A number of factors seemingly give rise to the problem of excessive assembly of documents and consequential over-disclosure.  In many cases persons without a proper knowledge of the case or the relevant issues are involved in gathering documents that may be relevant. These voluminous documents are then collected and often electronically scanned.   The initial review may be undertaken by a non-lawyer, such as a paralegal, or by an inexperienced lawyer.  If this person is in doubt about whether a document is relevant (and potentially disclosable) the inclination is to include it.  At that stage it is easier to include a document than to make the hard decision to exclude it.  There also is an element of self-protection.  It is safer to include a document and avoid a later accusation of not having given proper discovery, or to include a document for fear that it might later be suggested or ascertained that the document was important, and that its omission was negligent.

In some cases the disclosure process is misused by defendants to slow down litigation, or by parties to “snow” the other side.  Disclosing too many documents places the burden upon the other party to find the critical documents.  

An old problem made worse by new technology

The problem of an excessive number of documents being dumped on another party in the name of “disclosure” is hardly new.  However, new technology makes it a bigger problem than it used to be.  The volume of documents stored electronically has grown exponentially.  Information technology enables masses of documents stored on servers and in electronic archives to be captured.  The cost of identification, preservation and collection of these potentially disclosable documents is significant.  But it is dwarfed by the cost of reviewing the collected documents. At some stage someone has to actually read the documents.  Often that occurs relatively late in the litigation.  

There may be some scope to use technology to help solve the problem that information technology has exacerbated.  Clever electronic searching devices may thin the forest.  But a forest of largely useless documents may remain.  The use of technology is at best a partial response to a complex problem.  The problem that exists with over-disclosure was not created by technology.  We should not expect technology to solve it.  

The time has arrived to think about the way we deal with documents in litigation.  Document management and “doing disclosure” have become goals in themselves, rather than aids to doing justice.  Worse, the way documents are managed in too many cases actually impedes the objectives of civil litigation:  the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense.

Documents are important but not all documents are equally important

Documents are important to the resolution of most cases.  The credibility of a witness may be tested by reference to contemporaneous documents.  Contemporaneous documents may sink or save a party’s case.  However, the current devotion of time and resources to document management often is at the expense of the proper proofing of witnesses, and an early and hard assessment of whether an individual will be a truthful and reliable witness at trial.  Proofing and testing witnesses in conference is often delayed until disclosure is complete, and somehow it is never quite complete because there are always more documents out there to be found.

Documents are important to ADR.  Settlement is more likely when both parties have a reasonably similar expectation of how the case will be decided if it goes to trial.  In seeking to arrive at this common expectation, mediators and practitioners usually proceed on the basis that disputed questions of fact are likely to be determined by reference to contemporaneous documents (or the absence of them) and the inferences that can be drawn from these documents (or their absence).  

Fewer cases will settle by ADR if parties do not have access to documents held by the opposing party that significantly help or harm their cases.  In theory one could conduct a system of civil litigation without disclosure, or with disclosure only by leave.  However, such a system would generate significant problems, including a reduction in the number for matters resolved by ADR, and there would be routine applications for leave to have disclosure of documents that are likely to make a significant difference to the resolution of the case.

The proposition that documents are important to the just resolution of litigation does not mean that all documents are equally important.  

The view from outside

An alien visiting our planet, or a human being unfamiliar with litigation practices, may question the wisdom of the way we deal with documents in litigation.  The process may resemble one in which a large hole is dug into which an enormous volume of documents is placed.  Then at great expense a small selection of these documents is slowly located from within the mass and brought to the surface.  If the case does not settle at mediation, this selection of documents (often only a small percentage of the mass) becomes the “trial bundle”.  Amongst the trial bundle are a relatively small number of documents which actually affect the outcome of the trial.  An outsider, alien or otherwise, would think that the process is completely inefficient.  

The escalating cost of document management, document review and disclosure in many categories of civil litigation prompts the question:  is there a way to identify and exchange at an early stage the critical documents that are likely to make a difference to the resolution of litigation?

Is it possible to identify critical documents at an early stage in litigation?

By the time litigation is commenced, usually after pre-action disputes in which parties have consulted lawyers and obtained advice, most parties should know the critical documents upon which they intend to rely at any trial, and also know some, if not most, of the documents upon which the other party intends to rely and which are adverse to the first party’s case.  If the critical documents are identified and exchanged in a suitable format at a relatively early stage in litigation then this should facilitate the early resolution of cases which are capable of settlement, and the supervision of those that do not settle and which require case management.

Identifying critical documents

Some critical documents emerge well into litigation when a party, in compliance with an obligation to give disclosure, or in the general preparation of the case, locates a “killer document”.  The killer document may kill the other side’s case or one’s own.  The fact that on some occasions killer documents emerge only through the costly process of digging for documents well into the course of litigation should not blind us to three other realities.

The first is that in many cases most of the critical documents that help or harm a case are known relatively early in the piece, often before the litigation is commenced, and there is no reason why these critical documents should not be exchanged as soon as practicable.  Ideally, that should be done in a form that can be used at an electronic trial (“E-Trial”).  The Supreme Court’s Pilot of E-Trials has demonstrated that large and small trials can be conducted with greater efficiency if documents are scanned into a searchable PDF format and placed on a simple spreadsheet.

The second reality is that “doing disclosure” in the conventional way delays the selection and exchange of many critical documents.

The third reality is the costly search for additional critical documents by the conventional process of document management and disclosure is a good illustration of the law of diminishing returns.  In a bygone era one might justify spending some hours scouring through the other side’s cardboard boxes of discovered documents in search for a few documents that might make or break the case. These days the documents are not usually in a few boxes.  They are often in an electronic format, including repetitious e-mail trails.  The cost of accessing and reviewing them may not justify the small chance of finding something of use.

These and other realities of modern litigation suggest that there must be better ways to identify and exchange critical documents than the present blunt instrument of disclosure conducted in accordance with the rules, followed by the costly process of finding the critical documents from amongst the mass of discovered documents.

One may question whether amending the rules of disclosure is the best way to proceed. Experience has shown that the reform of discovery by introducing the test of “direct relevance” has made little practical difference to the way in which litigation is conducted.  If anything, there has been an increase in the amount of disclosure. In the past one of the biggest vices in litigation was inadequate disclosure.  It remains a problem, as reflected in applications for further disclosure and the late emergence of relevant documents in some cases. However, today a bigger problem is “over-disclosure” notwithstanding the narrowing of disclosure obligations under the rules.

The challenge is to develop practices whereby only critical documents are identified and exchanged. A tentative definition of “critical documents” is the limited number of documents that are likely to be tendered at trial and which are likely to have a decisive effect on the resolution of the matter either at mediation or at trial.  The exchange should occur early in the litigation before unnecessary costs are incurred.  No one pretends that these documents will be the only documents to see the light of day at a mediation or trial.  Documents not known to the parties and which may significantly affect the case may emerge at a late stage in the litigation.  If they do, they can supplement the bundle of critical documents that will be the point of reference for settlement negotiations, case appraisal or trial.  The possibility exists that a “smoking gun” in the form of a new crucial document will emerge late in the litigation.  In many cases, however, the search for a smoking gun is a costly and futile exercise. The documents that win or lose the case will have been known to one or both parties early in the litigation.

If this is so, it seems preferable to develop practices by which critical documents are identified and exchanged early in litigation, to be supplemented, if required, by additional documents if good cause is shown for this to occur.  Such an early exchange is likely to enhance the early resolution of cases which are destined to settle.

New Practices

The early identification and exchange of critical documents can be encouraged by rules and protocols that limit the extent of search and inject principles of proportionality.  Compliance by practitioners with practices that limit costly searches should provide them with protection from professional sanctions.  Failure to comply with these rules and “over-disclosure” should be the subject of adverse costs orders and other consequences.  However, adverse costs orders against parties and their lawyers who engage in over-disclosure is unlikely, in itself, to have a major impact.  The costs associated with seeking such a costs order may be so significant as to deter bringing such an application and an application may not be sought at the end of exhausting litigation.

An important issue is whether a party should be obliged to submit only the documents upon which it relies (unless already submitted by another party), or whether the obligation should extend to documents of which the party is aware which may be adverse to that party’s case.  If there is such an additional requirement then it will be necessary to define the scope of any obligation to undertake a reasonable search, and also to include some process by which there is a suitable assurance that the “adverse documents” that are included are all of the adverse documents about which the party and/or its lawyers are aware.

The proposal to have critical documents submitted or exchanged may be subverted if an excessive number of documents are submitted.  It will be necessary to ensure that the process involves the submission and exchange of critical documents, not simply documents that are directly relevant.  In order to prevent the process from becoming unwieldy it may be necessary to limit the number of documents.  A default position may be to require no more than a specified number of documents being assembled and exchanged unless the Court otherwise directs. In any event, it should be clear that only critical documents are to be submitted and exchanged, namely documents which are likely to be tendered at trial and which are likely to have a decisive effect on the resolution of the matter either at mediation or at trial.

Subject to contrary directions, the documents should be exchanged after pleadings close. 

At the time these critical documents are exchanged a party should provide a statement that:

(a) sets out the extent of the search that has been undertaken to locate critical documents;

(b) draws attention to  any particular limitations on the extent of the search which were adopted for proportionality reasons and give the reasons why the limitations were adopted, e.g. the difficulty or expense that a search not subject to those limitations would have entailed or the marginal relevance of categories of documents omitted from the search;

(c) certifies that documents that are adverse to the party’s case and that have been located by the search, or which are otherwise known to the party, have been included.

Proportionate steps

Parties and their lawyers should ensure that disclosure and document management steps are proportionate, taking into account matters that include:

• the nature and scope of the litigation
• the importance and complexity of the issues
• the amount of money at stake
• the relevance of electronically stored information and its probable importance to the court’s determination of the live issues in the case
• the cost associated with the proposed steps
• the delay that is likely to result from carrying them out.

Documents and Judicial Case Management

Excessive judicial management of document management in cases which do not require judicial intervention will unjustifiably add to the costs of the parties and be an additional burden on an already scarce public resource: available judicial time.

However, judicial intervention in cases that require specific directions in relation to document management and disclosure should occur sooner rather than later.

Directions about documents that suit the individual case

If a party seeks to supplement the critical documents, whether by a formal process of disclosure or otherwise, then a case for this should be made out.  This should include, amongst other things, an estimate of the likely cost of locating, assembling, reviewing and providing such additional documents.

Parties should only be put to these costs if a case is made for such a course.  In a particular case the Court may direct that the costs associated with locating, assembling, reviewing and providing such additional documents be paid for by the requesting party.  The Court may order that the requesting party pay those costs in any event.  Alternatively, if the supposed benefits of disclosure of those additional documents are not demonstrable then the costs of the exercise should remain with the party that requested them (whether that party is successful or not).  These and other directions in the nature of “cost shifting” are necessary to ensure that the costs associated with document management and disclosure are not unduly burdensome.

Before approaching the Court to make specific directions in relation to disclosure and document management, the legal representatives should meet to discuss their proposals.

In formulating and submitting directions the parties should have access to standard document protocols that are developed by the Court in consultation with practitioners.  Parties should be encouraged to consult and agree upon directions that are appropriate to the particular case and, in doing so, select options from such a “menu”. 

The parties may agree, or the Court may direct, that the matter will proceed to trial on the basis that the critical documents, or the critical documents supplemented by a limited number of specified documents, and that these will constitute the “trial bundle”.

A particular case may warrant a direction similar to the Fast Track Discovery Direction in the Federal Court.  It provides:

The benefit to lawyers

Unfortunately in too many cases lawyers spend too long on soul-destroying (and costly) review of irrelevant documents.  This cannot be good for their emotional health, and I suspect that the burden of document management and document review alienates some of our best and brightest law graduates from a career in the law.  Professor Richard Susskind and others have remarked that the future of the legal profession requires lawyers’ talents to be directed at tasks that clients value: analysis and judgment. 

Too many lawyers spend too much time handling and reviewing thousands of documents which will never make a difference to the resolution of cases. The professional life of lawyers and the practice of litigation will be improved if we can find better ways to reduce the burden of document management.

Conclusion

Increasingly, irrelevant documents are routinely and electronically assembled in a process that resembles a vacuum cleaner collecting every possible document from a client’s database, most of which are dumped on the other side in the name of making disclosure.  At some stage the lawyers then have to find the truly significant documents within this mass. 

The early identification and exchange of critical documents is an important objective to the just resolution of disputes at a minimum of expense.

The personal views expressed in this piece are designed to stimulate discussion about how we can improve practices.  Practical problems include how we define what I have described as “critical documents” and how a party can reasonably determine which documents will be “adverse” to a party’s case.  The development of new practices will not be a simple task.  However, the escalating cost of “doing disclosure” and current document management practices cannot be sustained in the long term.

Improvements will enhance the delivery of justice.  They also should enhance the professional lives of lawyers.  Rather than being absorbed in reviewing irrelevant documents, lawyers can focus on the documents that are likely to make a difference, and the strengths and weaknesses of the witnesses whose evidence will win or lose the case.  Lawyers can direct their energies to what they do best, and what clients value the most: analysis and judgment.

Justice Peter Applegarth