The proposed discovery reforms are a necessity to modernize existing rules by directly addressing the complexities that the exponential growth of electronic documents has added to the discovery process. These changes should reduce the current burden associated with discovery as we look to take a more proportionate and cost-effective approach that is tailored to suit the requirements of each matter.

Why change?

The discovery landscape has changed dramatically over the past decade and is continuing to evolve, and, as a result, existing rules relating to discovery have become outdated.

The current issues are:

• Greater burden for legal teams;
• Greater frustration and delay; and
• Continued escalation of discovery costs.

The evolving complexities associated with electronic documents are only adding to these issues under current rules. These issues can prevent true access to justice as the cost of discovery is often disproportionate to the dispute. We do not want to stop using the courts due to this increasing cost and burden associated with just the discovery phase of litigation.

Many have acknowledged the necessity to address these common issues, but it is always difficult to provide a framework to suit everyone.

Background

Over the past nine months, a working group has looked at the practical aspects of electronic discovery and formulated the proposed rules which are now part of the consultation process. I was part of the working group, which also included Justice Asher, Laura O’Gorman of Buddle Findlay, and Lynn Holtz of Chapman Tripp. We also had input from Don Mathieson QC, Justice Chambers, and Justice Fogarty.

During this time, we comprehensively considered reforms and proposed reforms in other jurisdictions. We looked at what has and has not worked in these jurisdictions, whilst looking to adapt these principles to apply to a New Zealand context.

The drafting process has taken considerable time, as it has been essential to establish a framework that modernized existing rules in a way that makes provisions for the complexities of electronic documents, but in doing so does not add any additional burden to the discovery process.

Key principles

The key principles of the proposed reforms are:

• Cooperation between the parties at an early stage;
• Using technology effectively and efficiently; and
• Uniformity and reciprocity in the format of listing and exchange.

All of these principles are based on what has been happening in other common law jurisdictions, as they are all faced with similar issues of cost and delay in relation to discovery. The only difference is that we have adapted the key ideas of other jurisdictions by looking at what has and has not worked, and ultimately what would work in New Zealand.

What do the new requirements mean?

Parties will be expected to:

• Cooperate to decide upon an appropriate discovery order; and
• List documents in a set format and provide documents electronically as the form of inspection.

Problems associated with discovery are not solely due to the current test, but often how the test for discovery is applied, as not all matters are the same. Attempting to treat all matters as the same can lead to unnecessary burden, cost, and delay. It is envisaged on a number of matters that the parties can work together to try and achieve a discovery order that is tailored to the requirements of the dispute. In doing this, we will still keep a default discovery position, although this will change to the ‘adverse documents’ test.

By narrowing the scope for discovery, it is a shift away from disclosing everything under Peruvian Guano to a new principle of only disclosing the documents that really matter. This, in essence, should make discovery more just and cost-effective, but it will not be totally successful unless all of the principles are followed.

To assist parties to determine the type of discovery order, a ‘discovery checklist’ has been introduced. This requires parties to assess the proportionality of the dispute by going through set considerations.

Proportionality

On many matters, nothing will change from the common practice at present, as all the ‘checklist’ is doing is presenting some key considerations that can assist parties, especially with the growth of electronic documents. These obligations already exist when lawyers communicate discovery obligations with their clients. The only difference now is to articulate this with the other party to be able to assess proportionality and the appropriate discovery order. By having more knowledge on what documents/information a party has in its possession, they will be able to make more informed decisions about the scope of discovery.

As far as the cooperation between the parties goes, this may simply be email correspondence, phone calls, or, in more complex litigation, it could be more beneficial to arrange physical meetings. Realistically, this should involve no more than what is already happening, but perhaps at an earlier stage.

Tailored Discovery

If standard discovery is not proportionate for the dispute, then parties should seek to agree a non-standard discovery order. Non-standard discovery (Tailored Discovery) allows discovery orders to be devised to suit the specific requirements of the dispute.

With the increasing volume of electronic documents, it is essential that parties look to try to agree reasonable search methodology, which is proportionate to the matter in dispute. It is often assumed that if litigation is complex and involves large volumes of electronic information, then discovery will be costly and time-consuming. This does not have to be the situation if the parties can look to agree a proportionate approach. From the outset, parties are encouraged to keep documents in their original electronic format, so there is no further unnecessary expense incurred in printing and then scanning documents for inspection.

In more complex litigation, it will be essential to ensure technology is used effectively and efficiently, to enable key documents to be isolated as quickly as possible. Technology has changed the discovery landscape, so it seems logical that we use the benefits that innovative technology can bring to assist us get to the key documents that relate to the important issues of the case more quickly.

Parties may agree to use various methods to reduce the scope of discovery to focus on the key issues. One of the main problems in complex litigation is sifting through the vast volumes of irrelevant documents. To prevent this, parties can agree to devise an approach to locate the documents that really matter, which could include targeting specific individuals, key date periods, and various types of documents. Parties may also decide on further methods to decide what to include and exclude from their discovery.

In some matters, it may be that parties agree to identify certain key individuals as the starting point of discovery, and then if this provides a further trail of more discoverable information, then the scope could be widened. Alternatively, it may be decided that Peruvian Guano is the best approach in some matters.

These new rules set a framework for dealing with electronic discovery issues, but do not prescribe the level of detail that may be required on some complex disputes.

Listing and exchange protocol

In both standard discovery and non-standard discovery, parties are required to follow the new ‘listing and exchange protocol’. This protocol will bring more uniformity to the discovery process and will aim to limit needless expense and delay of discovery and it will ensure reciprocity in the discovery process.

The only new obligation for parties is that they will list documents in a set way and also provide the documents electronically as the default method of inspection. The listing will be the same as previously, but there will be set pieces of information that must be provided to describe the documents. As far as providing documents electronically, all that will be required in most cases will be for parties to be prepared to scan documents, instead of providing photocopies of paper documents if required by the other party.

These requirements follow what is often happening in practice anyway. It just provides the framework for further considerations that could achieve even greater efficiencies.

If providing documents in this manner is not feasible, then parties should agree to alternative formats. On some smaller matters, it may be decided that providing documents in paper is the most desirable method.

By having documents in a uniform electronic format, it will assist with case management beyond the discovery requirements and lead to considerable efficiencies. Electronic documents can be recycled many times through the duration of the litigation, and will no longer need to be copied many times, thus reducing significant time and cost.

Conclusion

These proposed reforms are a proportionate and cost-effective method for dealing with the escalating cost and delay in the discovery process. They allow for discovery orders to be tailored to address the specific requirements of a dispute.

These rules are essential as we seek to modernize our existing rules and directly tackle the complexities that the volume of electronic documents has brought to the discovery process. With the escalation in the volume of potentially relevant documents, it is no longer practical to discover every document. The focus shifts to developing an approach that is proportionate to the proceeding and the methods required to get to the documents that are the most important in the dispute.

The proposed rules will assist the profession to take advantage of the developments in technology, by encouraging greater cooperation and introducing uniformity, which should facilitate a more efficient and cost-effective discovery process.

In many matters, not a lot will change as far as obligations go compared to current practice. In more complex litigation, the greater cooperation between the parties will assist in achieving a more proportionate and cost-effective discovery process.

Andrew King is a litigation support consultant at E-Discovery Consulting, where he provides consulting services to the legal industry specializing in litigation support issues. Andrew can be contacted on 027 247 2011 or andrew.king@e-discovery.co.nz.

Full details of the proposed rules can be found on the Rules Committee webpage at www.courtsofnz.govt.nz. Details of the open meetings are as follows:

Auckland: 16 February 2011, 5.30pm at the Wintergarden, Northern Club, 19 Princes St, to be followed by a cash bar at the Pullman Hotel (previously the Hyatt).

Wellington: 21 February 2011, 5.00pm at the Law Society Building, 26 Waring Taylor Street, to be followed by a cash bar.

Christchurch: 3 March 2011, 5.30pm at the Victorian Room, Copthorne Hotel, 776 Colombo Street, to be followed by a cash bar at the hotel.

NZLawyer magazine, issue 153, 11 February 2011