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Managing e-files in discovery in civil litigation matters

Feature Articles

Cite as: (2003) 77(7) LIJ, p.38

The move to include electronic files (e-files) as part of the civil litigation discovery process is an international trend gaining momentum in Australia.

By Sandra Potter and Phil Farrelly

E-files can range from emails and word-processing documents to databases and accounting programs. The discovery of such files, as opposed to traditional paper documents, creates new problems, opportunities, advantages and disadvantages. The types of e-files now in general business use include: emails (including Lotus Notes), word-processing documents, spreadsheets, image files, pages downloaded from the Internet (HTML files), presentations (such as PowerPoint presentations), databases, accounting systems, audio and video files and technical drawing files.

WHY DO E-FILES MATTER?

The following factors have led to the increasing emphasis on electronic data discovery:

It’s an e-world
The Gartner Group reports that:[1]

  • 80 per cent of data created in the last 20 years exists in electronic form; and
  • 97.3 per cent of all documents created in 2000 were electronic.

Emails are the dominant form of business communication today. The average white-collar worker sends and receives 30 emails a day and there are an estimated 6.8 trillion emails created each year.

What does all this mean for paper?

According to Paul Molloy of Intacta Ltd,[2] studies indicate that while paper currently accounts for 90 per cent of the information management challenge, this will be reduced to 40 per cent by 2005. However, the actual volume of paper will have increased by 400 per cent.

In other words paper is not going to go away, but neither are e-files.

You can win or lose on an e-file
A number of recent high profile cases have been won or lost on the strength of electronic documents.

A good example is the email sent by Bill Gates to his executives in 1997 asking “Do we have a clear plan on what we want Apple to do to undermine Sun?”. That email was destined to become Government Trial Exhibit 265 in the landmark antitrust case US v Microsoft.[3] It was reportedly only found after effective discovery of e-files had been undertaken.

In fact, an e-file often turns out to be the “smoking gun” of a case, as widely reported in such matters as the Merrill Lynch settlement and the more recent HIH Royal Commission.[4]

The courts say “too difficult” is no excuse
In the past, the task of retrieving and reviewing e-files for discovery was considered too onerous a task. However, this all changed when Sackville J in his judgment in BT v Telstra[5] said: “I accept and appreciate that the purpose of making and retaining backup tapes (is) essentially disaster recovery, rather than archival. Nonetheless, it is feasible, albeit difficult and expensive, for the tapes to be restored and a review process set in place to identify discoverable material ... The fact is that the tapes do contain much material that is relevant to the issues in the proceedings, even though it is technically difficult to retrieve and the task of review is time consuming”.

It would appear that the Court will no longer accept the excuse that retrieval and review of e-files is difficult and time consuming. The question of avoiding large-scale e-discovery is therefore a moot point. The issue now is how you can best harness technology to create workable solutions.

Harper J of the Supreme Court of Victoria advised recently that given the costs and difficulties associated with the discovery of e-files, he expected that the Court would look at each matter on a case-by-case basis until such time as the issues surrounding retrieval and electronic discovery were resolved or at least effectively dealt with.

ELECTRONIC DISCOVERY V PAPER DISCOVERY

The advantages

Uncovering the “non-official” story
Paper is a much more formal medium of communication than email. It is therefore more likely to contain the “official line” in regard to the issues at hand. As with the Bill Gates memo, email messages often contain material that would not normally find its way into a formal letter or printed memo. The effort to uncover such material may prove invaluable to a case.

Email discovery can also pick up the thread of a conversation or message exchange. This can reveal precious information about the “story behind the story”, the flow of information and the role of the people involved in the exchange.

Cost-efficient, time-effective document management
By their very nature, electronic records are easier and more effective to store, duplicate and search than paper records.

Recently developed “interrogation” software is able to automate previously manual processes such as the indexing of documents, electronic number stamping of documents and culling of duplicates. These e-file collation systems maintain the integrity of the original e-files throughout the process.

It can, however, prove initially expensive to convert the available electronic data into a format that can easily be accessed and manipulated. It is therefore vital to formulate a detailed project plan covering all aspects of the discovery exercise. This allows each step to be costed against benchmarks such as document counts. This can be used to ensure that costs remain within budget.

Retrieving hidden information or deleted files
Even standard electronic documents hold a wealth of hidden data, for example:

  • metadata available in Word documents and emails, for example, by whom and when an e-file was created. (It is important that the amount of meta data released to the other side is controlled. The status of meta data as discoverable material in its own right is open to debate.);
  • tracked changes;
  • hidden columns;
  • formulas; and
  • sticky notes.

It may be possible to retrieve “deleted” files from hard disks and email systems. However, the management and technical overhead of going after such information must be weighed carefully.

Culling duplicate files – reduce your files by up to 60 per cent
Culling files is one of the great advantages of the electronic discovery process. Technology solutions can automatically cull duplicate files. This type of process simply looks for files that match to a factor of 100 per cent. Even at this setting it is possible to cull more than 50 per cent of the original collection. This allows fewer documents to review, therefore shortening preparation time and potentially reducing the overall costs of the matter. (Note that most systems do not delete the duplicates, they hold them off to one side so they can be manually reviewed if necessary.)

The disadvantages

Resistance
E-file software and management solutions are relatively recent phenomena. As with anything new, there is likely to be resistance to their use.

File conversion issues
Converting large volumes of material to standard file formats such as TIFF or PDF is not always an easy process.

Cost management issues
The volume of data available electronically is often significantly higher than the available hardcopy material. E-file counts can quickly rise into the hundreds of thousands of items.

It is therefore important that caution is exercised to ensure costs do not become disproportionate in relation to the overall value of the matter at hand. Careful culling and strict filtering rules can assist with the reduction of the overall collection before the conduct of an electronic discovery process.

Preserving the integrity of evidence
Ensuring that electronic data is not accidentally altered or deleted can be challenging. For example, every time a computer is turned on about 400 system updates occur on the hard drive (e.g. accounting records are automatically updated, the date changes to that day’s date etc.).

Verifiable forensic processes must be followed to ensure that the information is captured in an unaltered state and that it remains that way when it is processed and stored for the purposes of discovery. This process must be verifiable to the parties and the Court.

DEALING WITH E-FILES

Traditionally, lawyers have printed out and processed e-files in the same way they processed hard copy documents.

However, this has proved to be an expensive and inefficient process. In some cases, printing out the messages compromises the integrity of e-files. It also negates most of the benefits of dealing with soft copy information.

Ideally, when e-files are being prepared for use in the discovery process they will follow this generic workflow:

  • initial review of documents, categories, mailboxes etc. using keyword searching and culling techniques;
  • automated indexing;
  • automated recording of item attachment relationships (e.g. if an email was sent with an attachment);
  • automated item numbering;
  • automated culling of duplicate files (de-duplication of data); and
  • conversion of files into an appropriate format.

Law firms need to assist their clients to develop a strategy for extracting files held on hard drives, back-up tapes etc. and there should be a process for extracting information from the e-files (e.g. decompress compressed files etc.). E-files can be found in email systems, PC hard drives, file servers, floppy disks, CD-ROMs, DVDs, memory sticks, handheld devices (such as palm pilots), backup tapes, WORM drives and mobile phones.

Some of the issues in collecting and extracting e-files include:

Built-in “macro programs”
These programs may alter the information stored in a document based on choices made by the author. Document templates of this type are in common use and in such cases the electronic version may bear little resemblance to the hard copy on file.

Knowing the choices an author made becomes the key to recreating the original document. More sophisticated document management systems will store these choices for audit purposes.

File compression
Many companies use “file compression” to save space on their systems, especially when they archive electronic files. These files must be uncompressed and transformed back to their original state before they can be processed in an e-discovery exercise. Access to the original compression program will be required.

Passwords
More authors are choosing to protect their documents and emails with passwords or electronic signatures. Without the password or signature the document cannot be opened or printed. There may have been a central record of such passwords and signatures but it is unlikely in the current market. This type of central control will become more prevalent as businesses become more security aware.

Automatic dates/signatures
Many documents have some sort of automation, e.g. auto dates, auto signatures, formulas. This automated information may be significant and its integrity needs to be preserved.

Document management systems
Many organisations now use proprietary document management systems. These systems not only store the original document but also maintain each working version. These early versions may contain potentially valuable information that would not be evident from simply looking at the final document. They can be retrieved through the original document management system or suitable agent software.

Loss of access to documents
Lost access to documents can be an issue. For example, back-up storage hardware or software may have become obsolete, rendering back-up data inaccessible.

File format issues
There are hundreds of file types and formats in use by business. Fortunately most relevant files fall within the gambit of Microsoft Office. However, you may come across less common formats, especially in matters involving historic computer files. The original programs that created these files may be long gone. Without access to these programs the data is as good as lost.

There are specialist services to assist but there will be times when there will be no choice but to procure the original software and load the data into its original format.

PREPARING E-FILES FOR COURT

The Supreme Court of Victoria’s Practice Note 1 of 2002 does not specifically deal with the management of e-files in discovery, but it does cover “documents” for discovery, whether they are in hard or soft copy. (Refer to cls 10-16 for further information.)

The annexures to the practice note take a generic view of the type of documents to be presented in the Court. The standards outlined are open enough to allow for hardcopy or electronic documents although there are some specifics. It should be noted that the standards are negotiable. A wide range of possible formats may be suggested if they can still be displayed and stored within the Court’s existing system.

Electronic court book preparation
Preparation of an electronic court book is the same whether the information was originally in electronic or hard copy. The generic workflow is as follows:

  • draft and agree index;
  • tag documents within database;
  • review and cull – settle index;
  • electronically number (stamp) pages;
  • produce agreed bundle and index;
  • publish to CD/hard copy; and
  • file and serve.

The Supreme Court has made the following tools for electronic court book preparation available from its website at http://www.supremecourt.vic.gov.au :

  • Supreme Court Practice Note 1 of 2002 – Guidelines for the use of technology in civil litigation matters (particularly cls 17-19);
  • Ringtail’s CourtBook Technology Standards (these are useful as the Supreme Court of Victoria currently uses the Ringtail CourtBook software as its electronic court book solution); and
  • Conversion and Validator programs for data being prepared for use in Ringtail’s CourtBook to ensure that the data is in the correct format before being loaded in the Court’s system.

CONCLUSION

Both hardcopy and electronic discovery will continue to provide challenges to the legal profession. The ability to focus the discovery process using a set of strict and relevant parameters will become the best first weapon in bringing the growing volumes of business data under control. The courts may also need to review their current rules governing the discovery process in this emerging communications and data rich landscape. As an industry there is a need to focus on creating standards to deal specifically with e-files in discovery. This is a step already being taken by the Victorian Society of Computers and the Law Practice and Procedures Focus Group.


SANDRA POTTER and PHIL FARRELLY are co-chairs of the Victorian Society of Computers and the Law Practice and Procedures Focus Group and directors of 3C Consulting Group, which provides specialist knowledge management advice to the legal and accounting professions, justice agencies and government organisations.

Helpful Definitions

Metadata: “Data about data”. For example, who prepared a document, when it was prepared, etc.
TIFF file: A common graphic image format (Tagged Image File Format).
De-duplication: The process of identifying and eliminating duplicate files.
Decompression: Data is often “compressed” to take up less storage space. Decompression involves reversing that process.
Macro: A timesaving device where a series of commands or keystrokes can automatically be performed and repeated. For example, a user might set up a macro for his or her own name.
PDF: Portable Document Format (PDF) is a file format that has captured all the elements of a printed document as an electronic image that you can view, navigate, print or forward to someone else. PDF files are created using Adobe Acrobat, Acrobat Capture or similar products.
WORM drives: WORM drives (for write once, read many) is a data storage technology that allows information to be written to a disk a single time and prevents the drive from erasing the data. The disks are intentionally not rewritable because they are intended to store data that the user does not want to erase accidentally. Because of this feature, WORM devices have long been used for the archival purposes of organisations such as government agencies or large enterprises.


[1] The Gartner Group provides research and analysis of the IT industry.

[2] Paul Molloy is the managing director of Intacta Ltd and has 20 years experience in the IT industry. Intacta Ltd is focused on preservation of data, incorporating back-up technologies, complemented by hierarchical storage, management solutions and archived solutions.

[3] Laura Cutland, “E-documents play increasing role” Washington Journal, 5 February 2001.

[4] John Davidson, “The email trial: it changes everything” The Weekend Financial Review, 15-16 June 2002.

[5] [1998] 363 FCA.

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