A few eDisclosure cases of 2014

I recently started an article on cases relating to eDisclosure and evidence in England and Wales but side-tracked myself with a brief summary of the rules and of the position as it stands after Denton – see A little CPR as precursor to some eDisclosure cases.

I make no apology for that, because it made sense to split the article into two. A second editorial decision was to remove Smailes v McNally to a post of its own (see below). Yet a third was to ignore most of what lay between Mitchell on 27 November 2013 and Denton on 4 July 2014. Although disclosure featured in several of the judgments in that period, most of them were concerned with the absurd test laid down in Mitchell which the Court of Appeal implicitly disowned in Denton (it’s the season of goodwill, so I will refrain from commenting on the way the Master of the Rolls managed in Denton to blame all the other judges for their interpretation of MitchellGordon Exall manages this subtly in his end-of-the-year post here). I am not willing to go through all the crapulous stuff of that wasteful period to try and work out which disclosure points survive the bonfire of the post-Mitchell judgments.

This post picks up a handful of cases. It is partial in two senses – partial in that it does not purport to be complete, and partial because I pick on the cases which have the messages in which I am particularly interested. There is one about formal disclosure rules; one is on the factors which courts must weigh when confronted by witness evidence which either conflicts with other witness evidence or is otherwise unappealing; one is about proportionality (but with a conclusion in that case that no expense should be spared); one is about conduct – human and well as procedural – so appalling that it wins the annual prize for judicial excoriation.

Smailes is enough for one year anyway. Over a year elapsed between the original hearing and the (inexcusably delayed) publication of the Court of Appeal’s judgment, which managed to mis-spell both the name of an important case and the name of one of the judges whilst condemning a solicitor for not checking that his disclosure list was complete.

The best survey of eDisclosure-related cases is Electronic Disclosure by barrister Clive Freedman. It helpfully breaks the cases down by subject, so that if you want to know about, say, reasonable search, you can look under that heading.

Gordon Exall’s Civil Litigation Brief is invaluable, not least because it reminds us that disclosure is merely one component of overall case management and procedure – and is bound by the same rules, not least those relating to sanctions for non-compliance. You cannot properly understand the strength of your position on a particular disclosure point without knowing how it fits into the still-shifting sands of post-Mitchell sanctions.

Smailes v McNally

Birss J: Smailes & Anor v McNally & Ors [2013] EWHC 2882 (Ch) (27 September 2013)

Appeal: Smailes & Anor v McNally & Anor [2014] EWCA Civ 1296 (30 July 2014)

The original judgment serves as a primer on nearly all the points which can come up relating to the rules governing disclosure. The appeal judgment shows us that we can get so bogged down in argument about the meaning of a rule that we forget to ask if it applies at all. Read about them both in my article Smailes v McNally: eDisclosure consequences of failure to comply with a clear Unless Order. Then perhaps pop into the office to check on the status of any Unless Orders in your care.

AA v London Borough of Southwark

AA v London Borough of Southwark [2014] EWHC 500 (QB) (14 October 2014

Here’s a case which had me foaming at the mouth with rage at, this time at the way Southwark behaved, both as landlord vis-à-vis its tenant and as a party owing duties to its opponent and the court. My article AA v Southwark – local authority’s non-disclosure rounds off an appalling story tells the story insofar as it relates to disclosure obligations.

Two disclosure points arise from this case. The first offence would not, I’m sure, be committed by the respectable and responsible people who frequent this blog: in the middle of the proceedings, a report was prepared which covered the same facts and circumstances as the litigation; it was damning of Southwark and they failed to disclose it. The judge dealt briskly with Southwark’s suggestion that it was not disclosable, an argument which is not worth reciting here.

The other point is slightly more subtle and related not so much to the facts of the claim as to the preparation of the “evidence” (I put it in quotation marks because the story of the plot to prepare matching witness statements barely warrants the term “evidence”). The judge examined the phone records of the four witnesses as part of an exercise to establish that they colluded in preparing matching witness statements; he also seems to have examined the physical documents and concluded that they were prepared on the same computer and printed on the same printer. This level of forensics predates electronic documents but also illustrates how forensic examination can undermine evidence.

Southwark is apparently very cross about the judgment. I am not clear whether they say that the judge got the facts wrong or that their conduct was acceptable. I don’t recommend them as a role model for the conduct of disclosure.

Freemont (Denbigh) Ltd v Knight Frank LLP

Freemont (Denbigh) Ltd v Knight Frank LLP [2014] EWHC 3347 (Ch) (14 October 2014)

This case is not about the rules relating to disclosure but about the value of documents as evidence, and as to what the court does when there is a conflict between witnesses and/or where the evidence (and occasionally, the demeanour) of witness leaves doubts as to his or her veracity or recollection. There were challenges to the authenticity of key parts of several documents disclosed by the defendant in support of its claims and contradictions between assertions made by a witness (e.g. as to a source of funding) and documents. It is also one of those cases where, alas, hard drives had been destroyed – it is odd how often that happens.

There was quite a lot of discussion about some file notes. The judge said this:

Careful study of the challenged parts of the discussions recorded in the notes, when set in their context, convinces me that the challenged aspects cannot have taken place. They are out of kilter with the contemporaneous correspondence for the reasons I have endeavoured to explain when discussing them. And it defies belief that if Mr Bhailok really had intended Knight Frank’s report to be prepared for the purpose of enabling Freemont/Freemont Denbigh to make a decision on whether to sell some or all of the site at some point in the future, that important consideration did not find expression in any of the contemporaneous (and unchallenged) documentary communications. [Paragraph 138].

There was a file note which “surprised” a witness, and a conflict about timing confused by the fact that “the clock on Mr Bhailok’s computer does not appear to have been working, or at least was inaccurate”, causing the judge to have to make deductions about the sequence of events which did not match the oral evidence. There are several references to file notes which “purported” to show something.

As in AA v Southwark (see above) the court considered good old-fashioned evidence as to the contemporaneity or otherwise of file notes, based on examination of the paper on which documents were printed. This mattered because this was one of those cases where the relevant computer hard drives had been destroyed:

It might be thought that recourse to the metadata for the file note, or other computer forensic investigations, would resolve the issue of the dates upon which the challenged notes were created. However, investigations of that nature have not been possible in this case because in 2009 Bhailok Fielding upgraded their computer system to new computers. When that happened, the firm decided to destroy the hard drives of the (5) computers previously in use, even though once removed the hard drives of the computers could all have been accommodated within the confines of one small storage box. Prior to the destruction Bhailok Fielding did not take any images or even any electronic copies of the material on any of the hard drives. The destruction was carried out by a local firm, which demagnetized and then crushed each hard drive” [Paragraph 60]

There is no suggestion that this comprehensive destruction was done specifically to ensure that no-one could trace the actual history of the files. To put it at its lightest, the judge impliedly regretted that this cross-check was not available to the party who relied on the documents. What a pity for the witness that his firm’s drives had been destroyed.

This formed no part of the judge’s consideration, but solicitors upgrading their computers may care to run their eye down the Law Society rules for preservation of matter-related papers before sending hard drives off for destruction.

JSK BTA Bank v Ablyazov

JSC BTA Bank v Ablyazov & Ors [2014] EWHC 2788 (Comm) (08 August 2014)

You might easily conclude that JSC BTA Bank has facts so remote from your own experience that the disclosure order made in it has no relevance to you. You might well be right, but it is worth looking at paragraphs 121 to 133 anyway (my thanks to Clive Freedman, mentioned above, whose website provides the link to a case which I had missed).

The bank had unsatisfied judgments amounting to US$4 billion, and three very good firms of solicitors had a significant number of documents between them, much of them in paper form, after “five years of litigation which has been conducted on all sides by means of the forensic equivalent of trench warfare”.

The purpose of the claim, and of the eDisclosure demands, was to find hitherto concealed assets to meet the judgments. The combined estimates of the solicitors pointed to costs of £2.5 million to conduct searches. The claimant bank believed that some keywords ought to do the job. The solicitors disagreed because “if the bank wants to find undisclosed assets then ex hypothesi you cannot know what keywords to search for”. No one seemed willing to pay for the exercise.

Popplewell J weighed all the factors and decided to order disclosure anyway for a number of reasons including the fact that “the scale and expense of the exercise must be judged against the scale of the litigation and sums at stake”. Somewhere in that data, the judge reasoned, there may be threads and links which would help point towards hitherto untraced assets.

Subject to the not insignificant question as to who would pay for it, I think that this is the right conclusion. Assuming that the data was put into an appropriate system (and subject, of course, to the vagaries of optical character recognition since so much of it is paper) there are tools out there in the eDiscovery market which are designed for just this purpose – to hunt through large bodies of unstructured information with little or nothing as a starting point with a view to matching up entities whose relationship may not appear from any one document. All three firms are well aware that technology has moved beyond keywords, so I am surprised to find Popplewell J referring to keywords as the measure of practicability. Did no-one tell him about more sophisticated investigative tools?

This particular case may be a hopeless one – I am certainly not going to argue with firms of this calibre who say that there is no point, bearing in mind that the objective is to find money, not merely to run an eDisclosure exercise. It is important, however, for lawyers generally to understand the capability of modern eDiscovery software tools before asserting that an exercise is either disproportionate or impossible.

Popplewell J says this at Paragraph 130:

If, as the Respondents contend, the exercise involves looking for a needle in a haystack, it is nevertheless a potentially very valuable needle. Given the sums of money which the Bank allege Mr Ablyazov stole from it in the first place, and the value of some of the assets already identified, a single company or single asset may be worth tens or hundreds of millions of dollars.

He goes on to say that making such an order is in part aimed “at what Mr Rumsfeld would have called ‘unknown unknowns’”. I am not going to list them, but there are a few software suppliers who would say, and with reason, that “unknown unknowns” are what they are good at. Ask Google about unstructured data + ediscovery and see what he says.

Conclusion

2014 was not a vintage year for eDisclosure-related cases. With the Mitchell nonsense behind us, we can concentrate on just getting the job done proportionately and in accordance with the rules. The original judgment in Smailes serves as justification for my continued emphasis on the pre-Jackson rules, not so much to avoid expensive hearings but because they are the key to the proper reduction of disclosure volumes. This Smailes appeal judgment serves as a warning that this focus on the CPR is not merely a an argument for plodding compliance with the letter of the rules but a reminder that this must be qualified by attention to what the rules really mean.

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About Chris Dale

I have been an English solicitor since 1980. I run the e-Disclosure Information Project which collects and comments on information about electronic disclosure / eDiscovery and related subjects in the UK, the US, AsiaPac and elsewhere
This entry was posted in Court Rules, CPR, Discovery, eDisclosure, eDiscovery, Electronic disclosure. Bookmark the permalink.

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