On 1 February 2012 the High Court and District Court introduced substantial changes to the court rules relating to discovery and inspection. The changes have been described as the most significant in a generation, and aim to fundamentally change the conduct of litigation.
Discovery and inspection
Discovery is the process by which parties to litigation must search for and list all potentially relevant documents that they have in their control – including both helpful and harmful documents. Once those documents have been listed, every other party to the litigation is entitled to look at and copy those documents, a process that the court calls inspection.
Almost all litigation requires discovery and inspection before trial. But in recent years, the rapid growth of emails and other electronically stored information (ESI) has resulted in increasing costs and delays in conducting discovery and inspection.
The purpose of the new rules is to address these costs and delays, to bring the rules up to date in dealing with emails and other ESI, and to take advantage of new technology where possible.
The new rules contain a number of new principles, including a requirement that the parties co-operate to ensure that the costs of discovery and inspection are proportionate to the sums at issue in the case. The courts have indicated that a purely adversarial approach to discovery and inspection – such as driving up costs for tactical reasons – will no longer be tolerated.
Preservation of documents
The new rules impose obligations on entities and individuals even before litigation is commenced. As soon as a person or entity "reasonably contemplates" that litigation involving them will be commenced, that person or entity must take reasonable steps to preserve documents that are reasonably likely to be discoverable in that litigation.
This obligation may be triggered well before a statement of claim is filed. All will depend on the context. For example, it may be triggered as early as when a person seeks legal advice about bringing a lawsuit.
The consequences of failing to preserve documents may be severe, including costs, adverse evidential inferences and (in extreme cases) punishment for contempt.
The rule doesn't just require people to ensure that documents are not intentionally destroyed. It also requires people to take reasonable steps to ensure that documents are not accidentally destroyed.
Best practice is to circulate a "litigation hold" notice to all employees who potentially have relevant documents as soon as litigation is reasonably contemplated (and at the very latest when litigation is commenced). A litigation hold should describe the potential litigation and set out the categories and locations of documents to be preserved, including emails and other ESI.
The new rules also require parties to make an "initial disclosure" of documents when they serve their statement of claim or defence (or other pleading). Initial disclosure must consist of all principal, non-privileged documents that the party has in its control and that it used when preparing the pleading and intends to rely on at the hearing. These documents must be provided to all other parties at the same time as the claim or defence is served.
The new rules aim to narrow the test for standard discovery, so that fewer documents need to be located and listed. The rules also introduced "tailored" discovery as an alternative to standard discovery. Tailored discovery aims to limit discovery to agreed categories of documents.
Listing and inspection
The new rules make a significant change to listing and inspection. Previously, parties were required to produce paper copies of all documents (including emails) for other parties to review. The other parties could then request paper copies of any documents they wanted. Now, all documents are to be exchanged electronically – including paper documents, which now must be scanned into electronic format.
Similarly, the old rules required parties to manually create a list describing each document that was relevant to the litigation. Now the list must be created electronically, so that it can be used to link to the electronic set of documents. This is intended to allow the parties to quickly and easily search the discovered documents, rather than manually review boxes of paper copies.
The new rules entail a significant change to existing practices. Lawyers and their clients will need to navigate the changes to the rules carefully. Once the changes are bedded in, we expect to see a reduction in the costs and delays associated with discovery and inspection.
The rule with the most potential to cause issues is the obligation to preserve documents. The duty not to destroy or delete documents may be triggered well before litigation is formally commenced. As a result, legal advice should be sought as soon as litigation is reasonably contemplated. Otherwise, if a person destroys or deletes documents and litigation is later commenced, that person may face potentially severe consequences.
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This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.