English and Irish Courts clear the way to use technology to reduce disclosure costs in litigation

By Liam Kennedy and Paula Mullooly1

Disclosure of electronic documents in litigation has become increasingly costly and complex. The exponential growth in the volume of email and other data has dramatically increased the cost and time involved in traditional approaches to document reviews. However, recent decisions of the Irish and English Courts clear the way for technological solutions to reduce the burden of E-disclosure.

Disclosure is a key step in most major litigation. Traditionally, lawyers or paralegals had to manually review their clients' hard copy and electronic documents and to identify relevant documents which would then be disclosed to the other side. In cases involving hundreds of thousands - perhaps millions - of documents, this was always an expensive process, but the volume of documents requiring review has escalated dramatically in recent decades, greatly increasing costs.

The good news is that technology can significantly reduce the time and cost burden. Technology Assisted Review (TAR) or Predictive Coding can enable major reviews to be undertaken cheaper and quicker.  TAR involves software "trained" to review  large numbers of documents by comparing individual documents to a sample set that has already been analysed by senior lawyers.  The software then gauges the likely relevance of other documents in the dataset by reference to the sample. 

Pyrrho Investments and others v MWB Property and others [2016] EWHC 256

In a welcome decision, the English High Court last week for the first time formally approved the use of TAR to deal with e-disclosure.  The English decision follows the approach adopted by the Irish Commercial Court in IBRC v Quinn [2015] IEHC 175 which likewise approved the use of TAR.

This English case involved a claim for breach of fiduciary duty requiring some 3.1 million documents to be assessed totalled.  The parties had agreed on the use of TAR subject to the court's approval.

The judgment of Master Matthews noted the potential savings (of both time and costs) through use of the technology. Other factors considered included international experience which had shown TAR to be as reliable as more traditional document review methods. The judgment noted the Irish Court's approval of TAR in IBRC v Quinn (and also US case law). 

The Court accepted that there could be greater consistency in using a computer to apply the approach of a senior lawyer to the whole document set, rather than using many junior fee-earners, each subjectively applying the relevant criteria to individual documents. The judgment concluded that, given the size of the data set and the potential cost savings, the use of predictive coding was appropriate, and also proportionate to the value of the claims. The Master noted that whether the use of the software was appropriate in other cases would depend on the particular circumstances.

IBRC v Quinn [2015] IEHC 175
The Irish decision relied upon by the English Court application had involved some different features.  In IBRC v Quinn the defendants unsuccessfully opposed the plaintiffs' application for approval of the use of TAR to review approximately 680,000 documents (reduced from an initial 1.7 million through the use of search terms filters). In the absence of an agreement between the parties, the plaintiffs furnished a proposed protocol to the court setting out how the document review would take place. Fullam J was satisfied that the suggested approach would result in a substantial reduction in time and costs. The Irish Court noted that no method of review was 100% accurate but that even if it were only as accurate as a manual review, TAR would still be quicker and cheaper than manual review. The Court held that any TAR process must include checks and balances which rendered each stage capable of independent verification. It concluded that the IBRC protocol met this standard.

Comment
We are likely to see increasing use of TAR in appropriate cases (generally involving a substantial number of documents). Now that the principle has been established by both the Irish and the English Courts, the focus in future applications may well be on the specific checks and balances referred to by Fullam J. 

The Irish Commercial Court's decision in IBRC v Quinn also serves as a salutary reminder that the parties should engage with each other in the context of a large discovery exercise in an attempt to reach agreement to reduce the time and cost involved in such processes. This is particularly true if it is intended to use TAR and it would be preferable for the parties to agree the protocols to be adopted with a view to ensuring that key documentation would be identified and disclosed without exposing either side to a process which was any more expensive or onerous than it needs to be.

While the ever increasing growth of data maintained by business means that disclosure cost will remain substantial, the decisions of, firstly, the Irish and, more recently, the  English Courts offer litigants a welcome tool to try to reduce the time and expense involved.

1 Liam Kennedy is Head of Commercial Dispute Resolution at A&L Goodbody and Paula Mulloolly is a Professional Support Lawyer at A&L Goodbody

Date published: 23 February 2016