eDiscovery Case Studies: A Comparative Analysis Between Countries

In the context of litigation, the volume of electronically-stored information (ESI) stored by large companies using computer networking systems can be enormous. This might include several terabytes of data, where each terabyte can cover around 300 million digital pages based on the format of files. In large litigation cases, eDiscovery costs can account for more than 50% of the litigation budget, particularly when disputes arise between parties. The latest litigation technologies focus on reducing these costs.

These developments, however, aren’t restricted to a single country. Most jurisdictions around the world have their own eDiscovery rules. They are busy looking for more efficient ways to process ESI and minimize eDiscovery costs. Many countries have updated their laws to adapt to the technological developments used by companies to store and manage their data.

For instance, Part 31 of the Civil Procedure Rules (CPR) in the UK was amended in October 2010, adding the Disclosure of Electronic Documents as Practice Direction 31B. Likewise, the Federal Rules of Civil Procedure (FRCP) of the US were updated in 2005. Similar amendments in rules and practice notes have been introduced to federal and state courts by several other countries. The aim is to provide guidelines to parties and their legal representatives regarding the preferred procedures to adopt when dealing with electronic discovery in those countries.

In this article, we’ll discuss how eDiscovery obligations in the UK, US, Canada, Australia, Germany, France, South Africa, China, Japan, and India have developed over time in contrast with one another.

UK (England and Wales)

As mentioned earlier, new requirements related to the disclosure of electronic documents were incorporated in the UK Court rules in 2005. Compared to the US jurisprudence, the British jurisprudence related to eDiscovery is less developed. Very few cases concerning eDiscovery are reported, as in Canada. The most significant difference between the UK eDiscovery process and other countries’ discovery process we intend to discuss pertains to the scope of what’s discoverable.

The new court rules introduced by British judges in 1999 changed the name ‘eDiscovery’ to ‘eDisclosure’ and significantly reduced its scope. Based on the updated rules, there’s no need to produce neutral background documents or those that did not directly impact the issues of the case. The disclosing party is only required to adhere to ‘standard disclosure’ and only produce non-privileged documents required by a relevant practice direction, those it intends to rely on, and those that support or adversely affect its case or the opposing party’s case.

Moreover, disclosure and all other procedural steps are subject to the UK court’s overriding objective to do justice. Among the most critical aspects in identifying what is just include the proportionality concept. This means that the receiving party can only apply for disclosure orders that are proportionate with respect to the potential importance of the documents, the cost and ease of production, the financial condition of the parties, and the amount in dispute. Hence, the UK eDiscovery law tends to considerably limit the scope of electronic discovery relative to the US and Canada.

In addition, standard disclosure in the UK is typically limited to active electronic or online documents produced by a specified individual during a specified period, and to documents identifiable by keyword search. The scope of searches or ESI, however, must be specified by each party. Also, when presenting standard disclosure, searches for deleted files, embedded data, or metadata are hardly undertaken. When a party applies for a specific disclosure order, the request must be focused on demanding a limited type of ESI and prove that its production is reasonably important for the trial to be fair.

United States (US) vs UK

Unlike the case of the UK, the eDiscovery rules in the US mandate the production of all non-privileged information pertinent to the parties’ defenses and claims that may be responsive to specific disclosure requests. Therefore, as soon as litigation is reasonably anticipated, parties must start taking steps to preserve potentially relevant ESI. This could mean suspending any electronic data deletion systems that might be running. In the context of the US, electronic data spoliation of any degree is met with severe sanctions in the form of monetary penalties, adverse inference instructions, and dismissals.

According to the Federal Rules of Civil Procedure (FRCP), if accessing responsive, non-privileged data proves too costly or burdensome, a responding party is not required to produce it. Yet, the production of such data can be compelled by a requesting party by filing a motion. If the requesting party is able to establish reasonable cause against the proportionality factors that apply to ESI under the US law, chances are the court will grant the motion. The definition of accessibility, however, has been controversial in this context. Among the sources that are most widely regarded as not reasonably accessible include legacy or backup tapes that are unintelligible, don’t support keyword searches, or are unorganized. However, something that’s not reasonably accessible right now may become easily accessible in the future. That makes the accessibility debate an ongoing one.

Besides, the requesting party can receive ESI either in the electronic version or paper copy, but not both. If no specific format is requested, the disclosing party can produce electronic data either in a reasonably usable format or in its native format. The most common dispute between parties in this area in US courts is that the disclosing party argues that ESI should be produced in the form of a digitally imaged file, while the requesting party demands ESI production in a format in which it’s ordinarily maintained, that is, its native format. Again, this is an ongoing debate in the US eDiscovery process.

In addition, the Federal Rules of Civil Procedure emphasize the importance of communication among parties regarding the scope of eDiscovery from the earliest stages of the case. The purpose of this is to efficiently determine and resolve the various concerns triggering debates.  Here are some examples of this:

  • The parties must discuss the eDiscovery aspects at least 3 weeks prior to the 1st official conference with the court.
  • The case management order of the court may establish procedures and set deadlines pertaining to eDiscovery
  • The parties must explain their initial disclosures, that is, all relevant sources of ESI by location and category before any requests for discovery are served.

Hence, judges and lawyers should have ample knowledge of the latest litigation technologies used in the complicated electronic information systems of parties, according to the US eDiscovery law.

 Canada

Since not many eDiscovery cases have been reported in Canada, the case law associated with eDiscovery is not as developed as it is in the US. Plus, no statutory revisions are present to guide the Canadian court. Yet, a model eDiscovery order, called the ‘Model Order’, and guidelines for the discovery of ESI, referred to as the ‘Guidelines’, have been released by the Ontario E-Discovery Sub-Committee of the Discovery Task Force. These resources, along with the existing case law, provide plenty of guidance on conducting the eDiscovery process in Canada.

In the Canadian cases related to eDiscovery, the document types are virtually the same as those mandated by the US eDiscovery law. As in the US eDiscovery cases, metadata can now be produced. Unless metadata is not relevant to the case, the parties are encouraged to produce ESI in the format that preserves metadata.

Furthermore, according to the Model Order, parties are responsible to take reasonable steps to preserve relevant ESI. Regarding Preservation, it states that these steps should be targeted to prevent full or partial destruction, testing, overwriting, incineration, relocation, theft, mutation, alteration, deletion, shredding, wiping, migration, and intentional or inadvertent handling of documents that would make them inaccessible or incomplete. These preservation duties are no different from those in the US.

While eDiscovery costs are divided in the same manner as in the US, with each party required to pay for collecting, producing, and reviewing its own ESI and the requesting party bearing the cost of copying them, the Canadian eDiscovery law follows the ‘loser pays’ system. Based on this system, the successful party can recover a significant portion of the costs of document production.

Australia vs UK

Like in the UK, eDiscovery is referred to as ‘eDisclosure’ in Australia. The duty to preserve documents prior to the commencement of litigation was discussed by the Supreme Court of Victoria, Australia, in British American Tobacco Australia vs. Cowell. The court believes that documents that were deleted in accordance with the document retention policy in the ordinary course of business and before the commencement of the court proceedings are not a breach of eDiscovery rules. Plus, lawyers should discuss with their clients the issues related to their information management department, especially those concerning document retention issues and any automatic deletion policy.

Regarding the scope of discovery, the Federal court proceedings in Australia states that parties should acknowledge the need to limit the scope of discovery to save time and costs associated with the collection, production, and review of ESI. According to the court, it’s inappropriate to demand the production of documents that are unnecessary for the fair conduct of the case. The Federal order states that when parties conduct a reasonable search of documents, they must consider the volume of documents, the complexity of the matter, the significance of the document, and the cost and ease of retrieving the documents. Hence, the scope of eDiscovery in both Australia and the UK tends to be considerably narrower than that in the US.

The Australian Federal Court expects parties and their legal representatives to cooperate and help the Court identify relevant documents as early as possible and deal with the ESI in the most efficient manner. Like in the UK, the parties should evaluate the cost and burden of discovering documents and assessing them. In other words, parties must consider proportionality when handling ESI.

Thus, fewer documents are subject to ediscovery in Australia, Canada, and the UK than in the US. One critical reason for this is that in Australia, too, the losing party must pay the winning parties’ attorney fees and court costs. Therefore, eDiscovery costs are an important consideration when parties request disclosure of documents.

European Union (Germany and France)

When examining the eDiscovery process in the EU states, it’s important to account for the EU’s stringent data privacy laws that present a unique challenge to attorneys. The EU considers data privacy as a human rights issue, so the General Data Protection Regulation (GDPR) issues strong critical rights to EU residents concerning how their data is handled by entities. However, it does provide a safe haven for legitimate flows of information such as eDiscovery, declaring that files or collection of files that are not structured don’t fall under the data privacy regulations. Only structured data like customer databases are subject to data privacy laws.

Since electronic evidence, such as contracts, emails, meeting minutes, and other communication are mostly unstructured, e-discovery can be conducted for them without worrying about compliance with GDPR. The collection, preservation, and transmission of data for litigation are also governed by the GDPR. Yet, the legislation allows EU member states to give exemptions in processing data in litigation. Therefore, parties conducting litigation in the EU must check the concerned country’s laws as well.

Before we get into Germany’s eDiscovery scenario, it’s important to understand that the country features a Civil Law System like most of the European nations. This means that the German Court emphasizes the comprehensive civil codes that judges apply rather than the past decisions taken by judges in preceding cases.

Also, as opposed to the US law, which represents an ‘adversarial’ or a lawyer-driven process of adjudication, German law is characterized by an ‘inquisitive’ or ‘judge driven process’. In addition, there’s no concept of juries in Germany. Instead, it has lay judges who are non-professional judges appointed for 5 years. Professional judges sit alongside these lay judges to make decisions in cases.

Since eDiscovery is largely a lawyer-driven process, it never seriously developed in Germany, where the judge-driven processes and precise rules dominate. According to German law, parties should compile evidence independently to back their defences and claims and aren’t required to assist each other in the process. Lawyers also don’t have the right to acquire information for the opposing side on the basis of relevance. The judge generally hears evidence on issues of material fact. Hence, the litigation process is way faster and more predictable as compared to the litigation process in the US, UK, Canada, and Australia.

These facts don’t necessarily imply that eDiscovery is a neglected field in Germany. Various changes, including the development of eDiscovery solutions, like predictive coding, suggest that eDiscovery is on the uptick in the country. Plus, Germany is recognized as an international arbitration hub and its arbitrators are prepared to allow for it. Besides, German regulators, such as the Federal Financial Supervisory Authority(BaFin) and the Federal Competition Supervisory Agency (Bundeskertallamt), possess extensive powers to command documentation. Predictive coding and other eDiscovery techniques are crucial for companies operating in highly regulated industries to prepare and respond to legal actions.

In French litigation, on the other hand, there’s no specific eDiscovery obligation and the GDPR regulations apply. Yet, parties may wish to look at their own data, and litigation in France may be part of global actions where eDiscovery might be required.

Regulators, such as the French Competition Authority, happen to be the main drivers in France. The transfer of data out of the country has been blocked by data protection laws, employment law, and what’s referred to as the ‘blocking statute’.

South Africa

In South Africa, the discovery process is governed by Rule 35. The rule states that a party to any action can require another party to make the discovery on oath within 20 days of all relevant tape recordings and documents that have been in possession of that party. Since the term ‘document’ is not further defined, it’s assumed to mean a piece of electronic, printed, or written matter that serves as evidence or official record or provides relevant information. Evidently, eDiscovery in South Africa is still in its infancy stage and the rules don’t sufficiently provide for the discovery of information produced, retrieved, or stored in electronic form.

Current eDiscovery rules must be amended to open up the doors on the availability of evidence to promote transparency for the purpose of the trial. It should also help reap the benefits of ESI, such as searchability, portability, mobility, ease of replicating massive volumes of data, and the existence of metadata. Attorneys having access to ESI in a data system should be more efficiently able to prepare for trial, possessing all the relevant evidence available.

Hence, the South African Courts have certainly done a commendable job by moving on from a paperless system, there’s a lot more to be done to keep up with the ever-evolving international eDiscovery standards and best practices.

China

The biggest driver of eDiscovery in China is the urge to enable compliance with cross-border data transfer rules that prevent certain information to go beyond the national boundaries. The country’s latest Cybersecurity law applies to all individuals and organizations in the country. The law particularly imposes significant privacy and security obligations on suppliers of network products and services and network operators.

It also imposes strict controls on the collection and processing of ‘important data’ and personal information of Chinese citizens via ‘critical information structure’.  Unless there are business needs, local data must stay within China, according to the new law. It also issues the responsibilities of individuals and businesses to protect business secrets and personal information from disclosure and unauthorized access.

There is a huge demand placed on businesses and citizens to comply with cyber-sovereignty, a notion borne out of China’s recent social and political developments. China’s legislation regarding data and national security largely revolves around data localisation. This means that any data on the nation’s citizens must be collected, processed, and stored locally before being transmitted abroad.

China’s legal counsel is using the latest litigation technologies and processes to review structured and unstructured data as a prerequisite to transferring it internationally, in a way that protects the personal identity and national security. Hence, eDiscovery is playing a crucial role in enabling compliance with the legal process in an efficient and cost-effective manner. However, multinational companies are faced with litigation mandating legal disclosure.

Japan

Under the Japanese civil procedure laws, no discovery procedure is in place. Each party prepares and evaluates its claims on the basis of the evidence each possesses. They should obtain evidence to prove or disprove the merits of the applicant’s claim based on a mutual agreement. This is clearly different from the US civil procedure rules that enable parties to demand disclosure from the opposing party. With the absence of discovery in the country, there’s no concept of ESI either. A party must leverage evidence collection methods permitted by the Code of Civil Procedure to collect ESI under the influence of the opposing party.

Under the Code of Civil Procedure, parties don’t have any obligation to preserve ESI, because they’re required to acquire relevant evidence independently. Since there aren’t any preservation duties, no sanctions exist for failures in this regard.

The Code of Civil Procedure also doesn’t have any rules pertaining to the usage of the latest litigation technologies to analyze the produced documents. Parties do have access to such tools if they have the opportunity to analyse ESI on their own. Also, no work-product doctrine or attorney-client privilege to protect the confidentiality of documents exists.

Even though the discovery process doesn’t exist in Japan, the importance of ESI in business transactions and economics are making it necessary to develop a system that allows parties to collect and submit ESI. Discussions related to this are being conducted by the government, including introducing technological updates to civil procedure rules.

India vs UK

In India, discovery doesn’t hold the same strategic importance in litigation as that in the US, and eDiscovery procedures are similar to those in the UK. The Code of Civil Procedure of 1908’s Order XI governs eDiscovery rules in the country.

According to the code, a party can apply for an order to the Court to require the opposing party to make the discovery on oath of the documents that have been in possession of that party. Following the application, the Court will hold a hearing, in which it can order the discovery or dismiss it if it believes that it’s unnecessary for the case or untimely. When it does order discovery, it may limit it to certain classes of documents. Plus, if the Court thinks right, it can order the production of documents itself.

The scope of attorney-client privilege under Indian law is somewhat similar to that of the US. According to the Indian Evidence Act of 1872, communications between a client and their attorney are protected from disclosure unless the communication pertains to evidence of an ongoing crime or for any illegal purpose. Unlike the case in the US, however, communications with attorneys that are in-house are unprotected by privilege.

While India follows British law in many ways, its privacy law or data protection directive is nowhere close to those of that of the UK.

Hence, eDiscovery is very much in the development phase in India. E-Discovery evidence and Cyber Forensics is still in the grey area. It lacks the systematic legal framework of cyber forensics and eDiscovery. E-Discovery processes need a lot of improvement in India, and the gaps are expected to be covered in the upcoming years.

Conclusion

The US happens to be the most advanced nation in the development and implementation of eDiscovery in litigation processes. The UK, Australia, and Canada follow next, but more eDiscovery cases need to be conducted in these countries before eDiscovery can further advance.

While eDiscovery is gradually picking up pace in EU member states, including Germany and France, as well as China, they have strict data protection and privacy laws that prevent the free flow of data abroad. South Africa has initiated eDiscovery based on the US eDiscovery procedures, but there’s a lot of room for development. Finally, no eDiscovery system exists in India and Japan. While discussions are being held in both countries, it will take time before they start keeping up with the rest of the countries we talked about.

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