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01 Jun 2012

Putting the brakes on "trolley load" discovery in the Federal Court of Australia

by Michael Legg, Jonathan Slater

Part 20 should result in greater attention being paid to discovery in the hope that this reduces the discovery burden.

In 2007 Chief Justice Michael Black of the Federal Court commented on the need for the court to:

"take a more interventionist role to avoid having trolley loads of documents being wheeled into court when hardly any of them are likely to be referred to and when every page will add to the cost of the litigation." [1]

In the Australian Law Reform Commission (ALRC) Report, Managing Discovery: Discovery of Documents in Federal Courts, Report 115 (2011) emphasis was placed on ensuring judges had the power to restrict discovery. The recommendations of the report encouraged judges to take an active role in proceedings in order to manage and minimise discovery. [2] 

On 1 August 2011 the Federal Court of Australia adopted the Federal Court Rules 2011 (Cth). The new rules, consistent with the above concerns, adopted a revised regime for discovery in Part 20 that impacts on the extent and cost of discovery. Part 20 provides for:

  • increased judicial control of discovery;
  • a default or standard form of discovery (rule 20.14) that requires that documents be “directly relevant” to issues in the pleading and in the party’s “control” after conducting a “reasonable search”;
  • a more flexible and responsive non-standard discovery regime (rule 20.15) that can be tailored to the specific case, such as those that are likely to be document intensive, especially where the documents are stored electronically.

This regime has been considered in a number of first instance Federal Court decisions that have provided guidance on the new regime and which are discussed below.

Core principles

The new regime for discovery proceeds on the basis of two core principles. First, a party must not apply for an order for discovery unless the making of the order will “facilitate the just resolution of the proceedings as quickly, inexpensively and efficiently as possible”. [3]

Secondly, a party is unable to provide discovery unless the court has made an order for discovery. [4] The aim is to prevent unnecessary discovery. [5] In Alanco Australia Pty Ltd v Higgins (No 2) the court explained the operation of the new rules as follows: [6]

"The principles under the 2011 Rules, as under the previous Rules, were designed to ensure that the court controls the discovery process to ensure that the parties are not crippled with the cost and delay of that process. The objective is to ensure that discovery will be provided only when necessary for the just resolution of the proceedings as quickly, inexpensively and efficiently as possible having regard, in particular, to the “overarching purpose” referred to in Pt VB of the Federal Court of Australia Act 1976 (Cth), s 37M(1)."

Standard discovery

The new rules require a party applying for discovery to specify whether they are seeking “standard discovery” or, alternatively, set out the proposed scope of the discovery, which then requires consideration of the rules dealing with “non-standard and more extensive discovery”. The requirements for standard discovery are set out in r 20.14 and require that the party give discovery of documents: [7]

(a) that are directly relevant to the issues raised by the pleadings or in the affidavits; and

(b) of which, after a reasonable search, the party is aware; and

(c) that are, or have been in the party’s control.

For documents to be “directly relevant” the rules require that they must meet at least one of the following criteria: [8]

(a) the documents are those on which the party intends to rely;

(b) the documents adversely affect the party’s own case;

(c) the documents support another party’s case;

(d) the documents adversely affect another party’s case.

The direct relevance test was aimed at narrowing the scope of discovery. [9] The meaning of direct relevance is that of relevance in the sense of requiring that the document be directly on point, that it tends to prove or disprove the allegation in issue. [10]

The criteria that “the documents support another party’s case” has also been considered, and interpreted as meaning strengthening of a position, contributing to success, preventing failure or corroborating or substantiating a claim. [11]

Non-standard discovery

The requirements for obtaining non-standard discovery are set out in r 20.15 and provide:

"(1) A party seeking an order for discovery (other than standard discovery) must identify the following:

(a) any criteria mentioned in rr 20.14(1) and (2) that should not apply;

(b) any other criteria that should apply;

(c) whether the party seeks the use of categories of documents in the list of documents;

(d) whether discovery should be given in an electronic format;

(e) whether discovery should be given in accordance with a discovery plan.

(2) An application by a party under subr (1) must be accompanied by the following:

(a) if categories of documents are sought — a list of the proposed categories; and

(b) if discovery is sought by an electronic format — the proposed format; and

(c) if a discovery plan is sought to be used — a draft of the discovery plan.

(3) An application by a party seeking more extensive discovery than is required under r 20.14 must be accompanied by an affidavit stating why the order should be made."

The rules provide for a party to seek an order for non-standard discovery but they must address a number of factors including whether the criteria for standard discovery, such as the direct relevant test, or the criteria elaborating on the direct relevance test, should not apply. [12] This enables a party to apply for discovery on the basis that a direct relevance test is too narrow or even to adopt a traditional “train of inquiry test” if warranted by the particular case. [13]

It is possible to have an order for discovery made specifying the criteria that should apply, utilising categories of documents, dealing with discovery through an electronic format (which would be very common in most larger cases today) or through the use of a “discovery plan”.

A discovery plan is likely to be necessary when documents are stored in an electronic format. The discovery plan includes such matters as: [14]

  • scope of discovery;
  • location of documents;
  • preservation of documents;
  • strategies for conducting a reasonable search;
  • management of documents; and
  • approaches to dealing with privilege and confidentiality.

Conclusion

Part 20 of the Federal Court Rules 2011 (Cth) provides a framework for combating “trolley-load” discovery. Some cases may require no discovery — the need for discovery must be demonstrated. Other cases will utilise the well defined route of standard discovery. For cases for which standard discovery is inappropriate, such as cases involving electronically stored information, a non-standard approach to discovery may be devised. Part 20 should result in greater attention being paid to discovery in the hope that this reduces the discovery burden, and as a consequence, cost and delay, whilst facilitating justice.

This article was first published in Inhouse Counsel, Vol 15 No 7, June 2012

[1] As cited by M Pelly “Snail’s pace of corporate justice” The Australian 29 June 2007 p 31. [back]

[2] Australian Law Reform Commission Managing Discovery: Discovery of Documents in Federal Courts Report 115 (2011) [5.23]–[5.24]. [back]

[3] Rule 20.11. [back]

[4] Rule 20.12 and Alanco Australia Pty Ltd v Higgins (No 2) [2011] FCA 1063 at [8]. [back]

[5] Dennis v Chambers Investment Planners Pty Ltd [2012] FCA 63 at [15]. [back]

[6] Alanco at [7]. See also Coca-Cola Co v Pepsico Inc [2011] FCA 1069 at [34]. [back]

[7] Rule 20.14(1). [back]

[8] Rule 20.14(2). [back]

[9] Dennis at [20]. [back]

[10] Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 2) [2011] FCA 1396 at [33]–[37]. [back]

[11] Dennis at [34]. [back]

[12] Rule 20.15. [back]

[13] Dennis at [31]. [back]

[14] Federal Court of Australia Practice Note 6 — Electronic Technology in Litigation 1 August 2011 Appendix: Pre- Discovery Conference Checklist and M Legg and N Turner “When Discovery and Technology Meet: The Pre-Discovery Conference” (2011) 21 Journal of Judicial Administration 54. [back]

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.