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Dispute Resolution Update: Commercial Court Endorses Innovative Technology to Improve Discovery

31 March 2015

The Commercial Court judgment of Mr Justice Fullam delivered on 3 March 2015 in IBRC v Sean Quinn[1] provides a welcome endorsement, and important guidance, on the use of new software technology to assist the discovery process.

The discovery process can be a costly and time-consuming task, particularly in complex litigation.  With a view to reducing costs and time, specialist software has been developed, combining expert legal input with computerised prediction. This process, called Technology Assisted Review (“TAR”), is designed to improve the efficiency and accuracy of discovering electronically stored information by reducing reliance on manual reviews.

Facts

IBRC sought the Commercial Court’s approval and guidance on its proposed use of TAR. In particular, IBRC asked the Court whether its proposed use of a predictive coding process to discover a large number of electronic documents complied with the Rules of the Superior Courts. The process involves a lawyer with knowledge of a particular case performing an initial review and the categorisation of a sample set of electronic documents using a discovery software programme. This initial input is with a view to teaching the programme to determine the relevance of documents in the whole set of reviewable documents. Irrelevant documents are then eliminated from the review, and a review team manually categorises the remaining, relevant documents to complete the discovery process.

IBRC asserted that this blended methodology of human interaction and computer prediction would save time and would be more cost effective than traditional manual discovery of all documents. The defendant challenged the proposed method on a number of grounds, including that it did not guarantee that all relevant documents would be captured.

The Law

According to Order 31, Rule 12, of the Rules of the Superior Courts (the “Rules”), an order for discovery will only be granted if it is necessary for the fair disposal of the cause or matter or for saving costs. The Rule also says that any reference to “documents” includes all electronically stored information. However, the Rules do not refer to TAR.

Case law on the extent of the duty of a party making discovery was considered by the court.  Judge Clarke’s ruling in Thema International Fund plc v HSBC Institutional Trust Services[2] which noted that the obligation on a party is to disclose all documents, as far as is reasonably possible, was cited with approval. Judge Clarke noted that where there are a large number of documents, a reasonable approach is required by means of key word searches and the like. He accepted that there was an inevitable risk, particularly in large discovery, that there could be an innocent failure to disclose relevant documents.

The Court also considered the ruling of Judge Murray in Framus Ltd v CRH plc[3] which held that “a sense of proportion” must be maintained in efforts to satisfy discovery obligations.

On the issue of the Court’s discretion to interpret the Rules of the Superior Courts, the ruling in Dome Telecom Ltd v Eircom Ltd [2008] 2 IR 726 was noted where the court held that it has an inherent power to fashion its own procedure if the Rules do not precisely cover a particular situation.

Judge Fullam also cited North American case law which referred to studies which demonstrate that TAR is statistically more accurate than manual review.

Ruling

The Court ruled that the use of TAR and predictive coding discharges a party’s discovery obligations under the Rules, provided the process has sufficient transparency. The Court considered and generally approved a protocol proposed by the plaintiff for co-ordinating the discovery process using TAR and predictive coding.

The protocol establishes a useful collaborative process which can be observed between opposing parties to litigation seeking to use TAR and can be summarised as below.

The discovering party:

  • writes to the requesting party seeking its consent to use TAR and predictive coding. The discovering party undertakes to notify and consult with the requesting party in relation to the process. If agreement cannot be reached, there is liberty to apply to court.
  • performs a preliminary scoping exercise of the full pool of electronically stored documents. Where appropriate, that can involve performing an electronic keyword search to narrow the pool of documents. The discovering party provides the requesting party with the keywords used.
  • explains the predictive coding methodology to the requesting party.
  • codes or ‘trains’ the software by reviewing a sample set of documents and categorising them accordingly. This provides the software with a template for it to make further discovery of the wider pool of electronic documents.

Following this:

  • a disclosure process then takes place. The discovering party provides a schedule of the sample set of documents with their corresponding categorisation to a barrister nominated by the requesting party. The nominated barrister inspects the schedule subject to certain undertakings. If the nominated barrister is not satisfied with the discovering party’s coding, the nominated barrister can challenge the discovering party’s categorisation of any document as “not relevant” within seven days. If agreement cannot be reached, the requesting party may make an application to court.
  • further coding then takes place. Once the coding is stable, the software ranks the complete set of documents according to relevance. A threshold score for relevance is set and documents below the threshold score are removed from the process.
  • further tests are carried out on the documents which fall below the threshold to ensure quality control.
  • the remaining, relevant documents are reviewed manually and the discovering party makes discovery in the normal way.

Comment

The ruling reflects recent developments in this area and sensibly endorses a procedure designed to improve case management, limit discovery time-frames and lower costs in complex litigation. However, the ruling does not mean that parties are automatically required to use or agree to the use of TAR or the protocol; TAR is typically only appropriate in circumstances where discovery of a large number of documents is required.

The protocol, based on collaboration and on-going dialogue between legal representatives, provides helpful guidance on the appropriate use of TAR. It is anticipated that litigants should ultimately benefit from a more efficient and cost-effective process as a result of the wider use of the innovative techniques endorsed by this ruling.   

For more information, please contact a member of our Dispute Resolution team.


The content of this article is provided for information purposes only and does not constitute legal or other advice.

 

[1] Irish Bank Resolution Corporation Limited & Ors v Sean Quinn & Ors [2015] IEHC 175 

[2] Thema International Fund plc v HSBC Institutional Trust Services (Ireland) [2011] IEHC 496

[3] Framus Ltd v CRH plc [2004] 2 IR 20

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