GOVERNANCE & EDISCOVERY

Louise Spiteri & Sandra Toze

School of Information Management

What is eDiscovery?

Electronic discovery refers to the discovery of electronically stored information. Electronically stored information includes email, web pages, word processing files, audio and video files, images, computer databases, and virtually anything that is stored on a computing device – including but not limited to servers, desktops, laptops, cell phones, hard drives, flash drives, PDAs and MP3 players.

Electronic discovery is often distinguished from “conventional” discovery, which refers to the discovery of information recorded on paper, film, or other media, which can be read without the aid of a computer.

The costs of eDiscovery

In today's business environment the risks and costs due to litigation and regulatory requirements are sky-rocketing, and are not expected to subside any time soon.

The average cost to defend a corporate lawsuit now exceeds $1.5 million per case.

With increased regulatory scrutiny touching businesses in virtually every market, enterprises must approach litigation and regulatory oversight from a strategic perspective.

Things to ponder

Typical eDiscovery costs:Collecting data & computer forensic, which could span $200-$500 an hour.

Processing data from its native format into a format that can be loaded into an electronic document review system, e.g., extracting and "flattening" attachments and embedded files, converting the data to a readable format (could cost up to $1000 an hour)

Reviewing the data, which normally involves paying a lawyer to review every document associated with a matter to determine pertinence, privilege and responsiveness (30-50% of all litigation costs).

Final costs could be in the tens of thousands; for large corporations, this number has exceeded several million.

eDiscovery and Information Management

Information Management is the best solution to drive down your eDiscovery costs and risks. You need to consider that in most organizations:

Data volume continues to double every 18 months. The nature of data changes from textual data to multimedia visual and audio

data. The location of data moves from being within the firewall to being everywhere

and nowhere (mobile and cloud). People do not like to archive, clean up their inbox or implement retention; we

prefer to keep everything. This may be good for knowledge management, but it creates a huge legal liability.

Important mandate for eDiscovery

Every organization, whether it is government or commercial, must be able to confront the identification, collection, preservation, processing, analysis, review and disclosure of information, either to a regulator or to another civil party under the appropriate federal or provincial rules of federal rules of civil procedure.

eDiscovery in Canada

In Canada, the rules for documentary production are codified by each province’s rules of civil procedure or rules of court.

In terms of electronic documentary production, there is typically a rule requiring production of documents related to matters in issue in the action, along with a definition of “document” for the purposes of production to include various forms of electronic records or data (e.g., Ontario's Rules of Civil Procedure; Nova Scotia's Judicature Act).

Each province and territory has a well developed set of rules regulating the production, inspection, dissemination, review, listing and safekeeping of documents.

While the approach varies from province to province, some provinces’ rules are substantially similar.

eDiscovery in Canada

Standards have been drafted in Ontario and British Columbia, specific to each province, with best practice recommendations. The Ontario E-Discovery Guidelines offered the first attempt at the best practices guidelines for courts and counsel in Ontario.

The British Columbia guidelines took the form of a practice direction from the B.C. British Columbia Supreme Court to the profession. Other provinces are considering similar practice directions. There is still a need for a national “best practices” set of standards in Canada to govern multi-jurisdictional litigation and to assist courts in other provinces where standards have not yet been developed.

Federal Rules of Civil Procedure (FRCP)

Although the FRCP apply to the US, and to any offices of Canadian businesses located in the US, they have impacted Canadian eDiscovery principles, as we shall see. Key elements include:

• Parties may obtain discovery regarding any non-privileged matter that is relevant to any party's claim or defense — including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter.

• For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence. All discovery is subject to the limitations imposed by Rule 26(b)(2)(C).

Sedona Principles

The Sedona Conference® is a nonprofit law and policy think tank based in Sedona, Arizona, dedicated to the advanced study, and reasoned and just development, of the law in the areas of complex litigation, antitrust law and intellectual property rights.

The Sedona Principles are meant to elaborate further on the Federal Rules of Civil Procedure with respect to e-discovery

Sedona Canada Principles

The Sedona Conference® Working Group 7, “Sedona Canada,” formed out of the growing recognition that the discovery of electronically stored information can no longer be seen as a peculiarity of litigation in the United States or limited to complex commercial lawsuits in Ontario and British Columbia.

E-discovery is quickly becoming a factor in all Canadian civil litigation, and requires universal understanding by the Canadian bar and a common approach rooted in proportionality and reasonableness, with respect for variations in local rules and practices.

Sedona Principles

Key points to consider about eDiscovery: Volume & duplicability

Persistence

Dynamic, changeable content

Metadata

Environment dependence & obsolescence

Dispersion & searchability

Volume & duplicability

The dramatic increase in email usage and electronic file generation poses particular problems for large data producers, both public and private.

A very high percentage of information essential to the operation of public and private enterprises is stored in electronic format and much is never printed to paper.

Electronic information is subject to rapid and large scale user-created and automated replication without degradation of the data.

Persistence

Electronically stored information is more difficult to dispose of than paper documents. Ordinarily, “deleting” a file does not necessarily erase it:

Data are converted to a “not used” status, which allows the computer to write over the “deleted” data.

This persistence of electronic data compounds the rate at which electronic data accumulates and creates an entire subset of electronically stored information that exists unknown to most individuals with custody and ostensible control over it.

Dynamic content

Computer information has content that is designed to change over time even without human intervention, e.g., email systems that reorganize and purge data automatically.

As a result, unlike paper documents, much electronically stored information is not fixed in a final form.

Electronically-stored information is more easily and more thoroughly changeable than paper documents. Electronically- stored information can be modified in numerous ways that are sometimes difficult to detect without computer forensic techniques.

Metadata

A large amount of electronically stored information is associated with or contains information that is not readily apparent on the screen view of the file

This additional information is metadata.

Metadata includes information about the document or file that is recorded by the computer to assist in storing and retrieving the document or file.

• Much metadata is neither created by nor normally accessible to the computer user.

Environmental dependence & obsolescence

Electronic data may be incomprehensible when separated from its environment:

e.g., the information in a database may be incomprehensible when removed from the structure in which it was created. If the raw data (without the underlying structure) in a database is produced, it will appear as merely a long list of undefined numbers.

You may need to keep migrating your records so that they can be read in the future (e.g., remember 3.5 floppy disks?).

Dispersion & searchability

E-documents may reside in numerous locations – desktop hard drives, laptop computers, network servers, floppy disks, flash drives, CD-ROMS, DVDs and backup tapes.

Many of these electronic documents may be identical backup or archive copies, or earlier drafts.

It may be more difficult to determine the provenance of electronically stored information than paper documents.

The ease of transmitting electronic data and the routine modification and multi-user editing process may obscure the origin, completeness, or accuracy of a document.

Managing eDiscovery

The effort to comply to an eDiscovery request is often time-consuming and expensive due to the volume of information and records created and stored in electronic form, typically throughout the enterprise in an unstructured manner on network drives, personal computers and PDAs.

The key to addressing eDiscovery is to be proactive in the management of information and records with control over the handling of potential e-discovery requests.

Information management policies

Information management professionals must work with the legal staff and IT to develop a records management program that will support eDiscovery efforts.

Information management policies and procedures must be developed, to assist employees in managing their information and records.

Key information management points

Information without business value must be disposed of according to policy and in the normal course of business.

Records that have value to the organization must be stored and managed properly, under the control of the organization.

A classification scheme providing an information and records management structure must be implemented for consistency and control.

Records that are no longer needed must be destroyed in a systematic and documented way