Getting to grips with e-litigation - Federal Court Practice Note No 17

On 29 January 2009, the Federal Court issued its long-awaited revision of Practice Note No 17 (PN 17). The new version, The use of technology in the management of discovery and the conduct of litigation, provides more guidance and detail than the previous version, issued in 2000, ^[1] but its real impact is that it will further promote discovery and hearings in electronic format.

Underpinning PN 17 is an emphasis on the just resolution of disputes as quickly, inexpensively and efficiently as possible. It encourages practitioners to assess the size and scope of discovery as soon as possible and standardises the use of technology across matters. It sets out the court’s expectations on the use of technology in the conduct of proceedings and recommends a framework for the management of documents electronically in discovery and conduct of trials.

The new PN 17 will be frequently applied. The profession will therefore have to get to grips with the increased use of technology in commercial disputes, and what that means for their pre-trial activities.

When does PN 17 apply?

If the court orders that either discovery or the hearing be conducted using documents in an electronic format, PN 17 will apply.

It may be expected that such an order will be made in any proceeding in which:

• a significant number of documents (in most cases, 200 or more) relevant to the proceeding have been created or are stored in an electronic format; and
• the use of technology in the management of documents and conduct of the proceeding will help facilitate the quick, inexpensive and efficient resolution of the matter.

Whether the use of technology facilitates the quick, inexpensive and efficient resolution of the matter will, of course, depend on the circumstances of the case, but PN 17 indicates a clear preference for the use of technology to support litigation. It points out that:

• electronic documents, including email, form an increasing proportion of documents in proceedings;
• electronic documents must be managed efficiently to minimise the cost of discovery and the cost of the trial;
• printing electronic documents for the purposes of discovery will generally be a waste of time and money;
• photocopying paper documents multiple times (as opposed to converting them into images once) for the purposes of discovery will also generally be a waste of time; and
• wherever possible, parties should exchange the documents in a useable, searchable format or in the format in which the documents are ordinarily maintained (para 5.1).^[2]

The parties may make submissions to the court as to whether e-discovery or e-trial is, in fact, cost-effective in the circumstances of their case (eg. the parties may submit that it will be more cost-effective to discover the hard-copy documents in paper format).^[3]

However, in most cases with a significant number of documents the use of technology is likely to be considered cost-effective. Therefore, there is every chance that your commercial matter will be subject to PN 17.

What must parties do before discovery?

Before the court makes an order that discovery be given using documents in electronic format, it will expect the parties to have discussed and agreed on a practical and cost-effective discovery plan having regard to the issues in dispute and the likely number, nature and significance of the documents that might be discoverable (para 6).

The parties are expected to meet and confer for the purposes of reaching an agreement about the protocols to be used for the electronic exchange of documents and other issues relating to efficient document management in a proceeding (para 7.1).

The Pre-Discovery Conference Checklist issued with PN 17 outlines the matters which the court expects the parties to have considered before the first directions hearing or a case management conference. These matters include:

• the scope of discovery, having regard to the “reasonable search” requirements in r 15(2) and (3) of the Federal Court Rules and PN 14 “Discovery” (we discussed the “reasonable search” requirement in a previous issue of Inhouse Counsel); ^[4]
• strategies for conducting a reasonable search;
• management and preservation of electronic documents;
• management of privileged and confidential documents;
• timetable and estimated cost for discovery; and
• document management protocols. At a case management conference, each party will have up to three representatives, including a Discovery Liaison representative who will act as the single point of contact for the party in relation to the matters resolved at the conference.

Managing documents before and during trial

The parties are expected to:

• use the Default Document Management Protocol (where the number of discoverable documents is reasonably anticipated to be between 200 and 5,000) unless an alternative Document Management Protocol is agreed and accepted by the court (para 8.1);
• agree to an Advanced Document Management Protocol in consultation with the court (where the number of discoverable documents is reasonably anticipated to exceed 5,000) (para 8.2); and
• use technology efficiently and effectively in preparation for, and the conduct of, the trial (para 9.1).

The document management protocols issued with PN 17 include quite detailed and technical instructions on some important issues associated with e-discovery (including the format and structure for document exchange, redaction for privileged or confidential documents and de-duplication methodology). They also reflect similar protocols used in cases run before the courts in the past. This is likely to make it easier for the parties to prepare and negotiate the protocol in their proceedings.

The Pre-Trial Checklist outlines the matters which should be canvassed during pre-trial conference involving the judge or the judge’s delegate and parties. These include engaging qualified service providers to facilitate e-trial, software/hardware for e-trial, management of the Court Book contents, provision of transcript, courtroom operator services.

Recommendations for litigants and their lawyers

With the move within Australian courts to e-discovery and e-trial, litigants and their lawyers need to be aware (and be prepared to comply with) PN 17 and similar practice notes in other jurisdictions. That is particularly so as PN 17 may apply as a default to litigation with the relatively small threshold of 200 discoverable documents.

In particular, litigants and their lawyers should:

• take time to learn the basic technology and issues surrounding managing electronic documents and running a proceeding electronically — there is every chance that PN 17 will apply to your case;
• be proactive in managing electronic documents and archival systems — this will facilitate compliance with PN 17;
• consult with appropriate e-discovery experts as well as the client’s IT experts early on—e-discovery experts bridge the knowledge gap between the lawyers and client’s IT experts; and
• use PN 17 as a tool to narrow the scope and size of discovery at an early stage — this may ultimately save time and money.

This article was first published in Inhouse Counsel, Vol 12 no 5, March 2009

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^[1] Guidelines for the use of Information Technology in Litigation in any Civil Matter. ^{Back to article}

^[2] See also fn 4 to the Example of Advanced Document Management Protocol. ^{Back to article}

^[3] Notably, the NSW Supreme Court Practice Note SC Eq 3 Supreme Court Equity Division — Commercial List and Technology and Construction List was recently amended (with effect from 1 January 2009) to remove mandatory e-discovery in relation to the hard copy documents. See para 28 of SC Eq 3 (as amended). ^{Back to article}

^[4] G Elliott and A Blinder, “Taming the electronic ostrich (or how to do enough — but not too much — e-discovery)” (2007) 11(2) IHC 18. 5. Pre-Discovery Conference Checklist at para 9. ^{Back to article}