Electronic disclosure: Paying lawyers to look at porn

Imagine that you are checking work on a fairly big project, say a £120m office building. You find that something went wrong towards the end of the job, which means a large amount of work has to be redone. The client is looking for a hefty compensation payment and each member of the project team is trying to find reasons why it shouldn’t be the one to provide it. A court case is looming.

As part of the pre-trial process you will have to disclose any documents you hold that are relevant to the case. Luckily, these days 98% of project documentation exists in electronic form, so all you have to do is spend a couple of boring weekends with your PA putting it on a memory stick before popping it in a Jiffy bag and biking it round to the other side’s lawyers …

Unfortunately, it’s not as simple as that. For one thing there are going to be a lot of documents; Chris Baldwin, a consultant who specialises in project managing the electronic disclosure process for legal firm CMS Cameron McKenna, reckons it takes about a million to organise the construction of a building such as our £120m office. Pretty much all of those are potentially relevant, but to decide how relevant, each has to be examined in some way.

How the process works

In the jargon, digital documents are known as ESI (electronically stored information), and can take many shapes. A court’s standard disclosure form requires you to state which kind of ESI you’re not going to supply, out of the following: PC files, databases, back-up tapes, mobile phones, notebooks, PDAs, flash drives, servers, off-site storage, laptops, handheld devices, emails, calendar files, spreadsheets, documents, web-based applications and graphic and presentation files. Until a few years ago, the parties often came to an agreement to use only the paper files, because neither wanted to wade through all this ESI. Then it became apparent from court cases in America that it was a gold mine of damaging information, and demands for access to as much of it as possible became an important part of pre-trial manoeuvres.

Once the parties and the court have decided what kinds of documents are relevant, and between which dates, the process of collecting begins. This is where each side’s solicitor moves into its client’s offices and uses harvesting software to amass gigabytes of ESI. This is searched using an agreed set of terms to reduce it to a more manageable size before it is sent off to a specialist subcontractor, often in a low-wage economy. Here each document is reviewed by human eyes and indexed according to a set of about 12 criteria, such as time, date, originator and recipient. The words are extracted and put into a common format; irrelevant, duplicated and privileged documents are identified.

By the time this has been returned to the UK, it will have been reduced to about a fifth of its former size: this is the litigation database: the corpus of evidence that will be used to reach a decision. Each side’s lawyers, together with their client and a team of paralegals, go through it in search of evidence that supports their case and damages their opponent’s. Baldwin says the prosecution of Enron involved 150 people working in three shifts around the clock; construction cases tend to require a dozen people working office hours to review something like 300 relevant and 2,000 irrelevant documents a day.

Among the files disclosed was an internal email in which an engineer said: ‘I hope you haven’t issued the drawings yet because they’re wrong’

Tim Tapper, Cyril Sweett

Why are digital files so dangerous?

The files in the corpus can usually be divided into two categories: formal and informal. The formal documentation runs a job, and at first glance it is the same as it was in the paper age: site reports, minutes, allocation sheets. However, ESI tells more stories than paper ever could. Bob Maynard, a partner in Berwin Leighton Paisner (BLP), recounts a case that revolved around whether workers were directly employed. A junior member of the legal team was reviewing an Excel spreadsheet when she noticed from the way the lettering ran that two columns had been “hidden”; as these turned out to list the companies the workers were employed by, a £6m dispute was won there and then.

The informal files, which wouldn’t have existed a few years ago, also tell many tales. Tim Tapper, head of legal services at Cyril Sweett, says: “One of my colleagues was acting as an expert witness in a professional negligence case about an engineer. More than 3,000 files had to be disclosed and among them was an internal email in which one engineer said: ‘I hope you haven’t issued the drawings yet, because they’re wrong.’ His colleague had, and the project team had been working off these drawings, so this didn’t really help its case.” Baldwin says: “We’ve had engineers who’ve said ‘I don’t know why we bid for this, we don’t have the resources’.”

The problem is that emails are so easy to write, send and forward, and they have an alarming and unhygienic tendency to multiply. James Bessey, a partner in lawyer Cobbetts, gives a rundown of common disasters. These include emails sent to an external party that are exchanged internally before being mistakenly copied back to the third party, complete with “all manner of things that it was not intended it should become aware of”. Another problem with long email strings is that they tend to give rise to others that ricochet around a business. As Bessey says, “That kind of material often contains embarrassing or unnecessarily personalised comments regarding individuals and their performance.”

And where this kind of chatter would once have been made over the phone or down the pub, these days it tends to be in writing. Aidan Steensma, a solicitor at Cameron McKenna, points out that the written word can acquire a forensic weight out of all proportion to the speaker’s intention. In the hands of a barrister, an emotional email fired off from a BlackBerry by somebody halted at a red light can be made to look like an abject confession of guilt.

It’s a pity you sent that …

In the same way as photo labs used to create displays made up of pictures that the customer would be too embarrassed to collect, so many solicitors’ offices and courts contain noticeboards on which emails sucked in by e-disclosure are pinned. One lawyer tells a story about searching the data pile using the phrase “oral assurance”, and pulling up a series of emails between two employees who were discussing their plans for the evening. They then became quite famous in legal circles. Maynard mentions the time he found out an employee was covertly running a business. As Baldwin puts it: “If people haven’t organised their data then we have to collect everything. There are medical histories, attacks on colleagues, job applications – and we’re under a court-imposed requirement to look at it all.”

One lawyer searched the database using the phrase ‘oral assurance’ and pulled up emails between two employees discussing their plans for the evening...

On one memorable occasion, Baldwin was called by a data subcontractor in the Philippines who said one of their reviewers had walked out after coming across hardcore pornography in an email. Work had to stop while the English lawyers contacted the guilty party and said “it’s a pity you sent that … is there anything else we should be looking for?”

Lawyers faced with such personal information may choose to ignore it (as Maynard did with the entrepreneurial employee), but this is more difficult if it occurs on an email that also contains relevant information. Baldwin: “People working long hours away from home tend to blur the distinction between work and social life: emails go girlfriend, project, girlfriend.”

One final point: it pays to avoid profanity. Baldwin says most of the major swear words are common search terms, because people type them when they are emotionally engaged, and writing unguardedly. Underlining Bessey’s point, the head of legal affairs at a major contractor says: “In the past we’ve been copied in on emails by mistake: one from an architect said ‘I don’t know how we’ll explain this fuck-up to the contractor’. That came in handy.”

How do you protect yourself

The irony of all this is that ESI should be cheaper and easier to organise than paper. Baldwin estimates that it costs about 75p a page to turn paper into a file in the litigation database; a digital file is more like 10p. At the same time, the hardware and the software needed to store and manipulate the evidence is getting cheaper. In practice, however, the sheer volume of information makes the process fantastically expensive. In the recent case of Digicel vs Cable & Wireless (C&W), the defendant spent £2m on its electronic disclosure, but without agreeing its scope beforehand. The claimant objected, and the court ordered C&W to do it all again.

Any companies that do not want to pay lawyers to read about their staff’s private lives need to have a set of policies in place before a dispute happens. First, employees have to be made aware that pretty much everything they write at work is disclosable. In the old formula, don’t put anything on an email you wouldn’t on a postcard.

Greg Verhoef, director of stonework firm Szerelmey, says that’s about all firms can do: stifling dissent is as difficult practically as it is questionable ethically. “I don’t want to prevent people from building relationships with others in a project team. We try to employ the best people and trust them.”

“Most of the major swear words are common search terms, because people type them when they are emotional, and writing unguardedly”

Chris Baldwin, CMS Cameron McKenna Second, draw up a records policy. In response to a client’s query, BLP recently calculated that there were 400 legal requirements relating to the keeping of files, so this will probably have to be the size of a book. First, separate records into categories, then have a detailed policy about each. And make sure you have lots of space: projects files may have to be kept for as long as litigation may take place, which is six years for ordinary contracts and 12 years for those signed as deeds. Third, arrange your project files so that they are easy to harvest, and contain as little irrelevant data as possible. Steensma points out that the mere existence of such a policy helps your case. For example, you may have a rule that every email relating to a particular job must have its name in the subject line. “The project manager can then give a statement that it has been his practice for the past 10 years to do this and make it difficult for the other side to get disclosure of informal emails.” Other examples of good practice are to ask staff to empty their inboxes into standard folders at the end of the day, and to give a project its own email address that all correspondence is copied to. And the minute you think you may be about to get into litigation, send a holding letter to your staff telling them not to destroy any relevant documents. You should also postpone IT upgrades: if they go ahead and documents are lost, it will look as though you’ve destroyed evidence. Fourth, if you do get in a dispute, choose a lawyer that is up to speed on the dangers and opportunities of ESI. Steensma suggests requesting the firm’s standard booklet on e-disclosure. You can also ask whether they employ a specialist consultant, and you should certainly take note of how much the lawyer is talking about ESI in your preliminary consultations. In the longer term, the way forward may be to create a shared set of documents at the project’s inception. These do exist on the largest projects but are as common as hen’s teeth elsewhere. Baldwin says: “In a perfect world there are people who’d like to develop systems that would hold all the critical documents in a central repository.” This would go a long way to creating the litigation database before the dispute begins; and the greater transparency inherent in such a system may even make it less likely that a dispute happens in the first place. Why don’t the courts do something? Meanwhile, the courts have done little to help the parties control their expenses. Steven Whitaker is senior master at the Royal Courts of Justice, which means he is, among other things, in charge of setting the directions for how parties manage their cases for settlement or trial. He is trying to formulate these to help parties keep their costs under control, and the C&W case has certainly focused attention on the problem, but little progress has been made so far. In 2005 a small addition was made to the court’s practice direction on e-disclosure, but Whitaker says it received little publicity and failed to take into account the practical difficulties of searching, disclosing and inspecting these files. He says: “There is now growing awareness of the problem of e-disclosure, and the fact there is little guidance to decide what constitutes a reasonable search for documents. Most other jurisdictions – America, Canada, Australia and Singapore – provide a better roadmap.” Earlier this month, he tackled the problem of making e-disclosure more pragmatic in a case brought by opiate-dependent prisoners against the Ministry of Justice (in which the ministry refused to disclose any ESI). He has also developed a standalone practice direction and questionnaire that he hopes will make the process clearer. The former will set out the court’s expectations and guidelines, while the latter is intended to help the parties agree on the scope of their searches, and therefore how much money they spend (see the online version of this article for links to the case and the questionnaire). “They should help people decide what level of search and disclosure is reasonable,” he says. The High Court’s Civil Procedure Rule Committee is now considering these proposed changes, with a decision expected in the summer. If all goes well, the new practice direction should be in place by October 2010. When that is in place, it should help prevent any repetition of C&W. But the obvious point is that if costs are held to an agreed level, the firm with the best organised files is going to be at an advantage in the trial. E-disclosure, like chance, favours the prepared mind. The IT manager’s view Gary Dalton, head of IT at architect Purcell Miller Tritton, takes us through his document management system We use an application called Conisio. We’ve had it in place for about five or six years. It’s folder-based, and any emails or documents get filed under the relevant project folder. Even all post gets scanned. This means that when any information is required, or any correspondence needs to be traced, we can do so easily through a quick search. We also have a built-in firewall, which means we can prove that a specific email was sent out, and a mail controller that registers an acknowledgement when an email is received on the other end. I haven’t been involved in a dispute when we’ve had to disclose these documents, but it would be quite easy for us. We have internal and external training for using the system, as well as making everyone aware that it’s office procedure and that they need to do it. This applies to all our staff across all our offices, in the UK and abroad. We also have a limit on how many emails each person can have stored. We’re aware that all these procedures can be time consuming, so there are always office managers on hand to help keep up to date if it’s getting to be a burden. We also recommend that emails should be professional, and we’ve never encountered a problem before where there has been a blurring of boundaries between personal and professional. Those companies that don’t take a stringent approach to their data do so at their own risk.