Ontario Master: Proportionality Requires Transparency (6/6/2014)

In Siemens Canada Limited v. Sapient Canada Inc2014 ONSC 2314 (CanLII), Master DE Short makes a number of important observations covering many aspects of e-discovery, in particular, how parties need to co-operate on the meaning of “proportionality.” I begin with some of the key points:

  1. Parties must draft a Discovery Plan at the outset of litigation to ensure agreement on the scope of discovery. Failure to do so may lead to the court imposing a plan and costs sanctions. [paras. 39, 151, 158-160]
  2. Disagreements about the details of a Discovery Plan should be mediated, if necessary with the assistance of a neutral e-discovery expert. The Court is not the best forum for resolving technical e-discovery matters. [paras. 36-40, 89, 145-6]
  3. Even though the production of documents is subject to the proportionality principle (“proportionality is now the default”), the test for production is relevance to disputed facts in the pleadings. [paras. 57, 161]
  4. Where relevant data is difficult to collect or may not be recoverable, attempts should be made to preserve it. [para. 101]
  5. A party cannot unilaterally determine what is proportional, for example, by limiting the number of custodians searched or keywords applied. These decisions should be transparent, co-operative and form part of the Discovery Plan. [paras. 119, 128, 151]
  6. The fact that a custodian may have only a few relevant emails does not justify excluding that custodian from a search. Large volumes of email and other structured data (such as a project document repository) can be dealt with by using de-duplication and search engines. [paras. 106, 111]
  7. An employer should not leave individual custodians to determine which emails they consider to be relevant. [para. 149]
  8. If no response to a litigation hold memo is received from a custodian, follow-up is required. [paras. 95, 139]
  9. records retention policy of deleting emails every thirty days “can potentially cause serious problems,” including the necessity to expensively restore back-up tapes. [paras. 136-138, 156]

FACTS

In 2007 Sapient won a five-year, $70 million SAP implementation project for Enbridge. Sapient subcontracted with Siemens for conversion and other services. Sapient assigns 120 employees and contractors to the project while Siemens as subcontractor assigns 38. Joint project staff are granted access to Sapient’s project document repository (ResultSpace).

Delays mount up and Sapient terminates the Siemens subcontract. In July 2009 Siemens sues for breach of contract for $20 million. Sapient counterclaims for $10 million for delay.

Siemens carries on discovery the old fashioned way, ignoring the 2010 rule amendments (in particular the requirement of a Discovery Plan). Siemens identifies all 38 project staff as custodians and collects all their data; performs key word searches, reviews and eventually produces some 120,000 documents. (Since it no longer has access to ResultSpace, all Siemens productions come from other sources such as email.)

Sapient also works traditionally (i.e. no meet & confer, no Discovery Plan). But they decide to unilaterally invoke the new principle of proportionality as follows:

  • Sapient identifies only 14 custodians (out of 120 project staff) as holders of potentially relevant material, because it is mere speculation that the other custodians possess any additional evidence material to the case
  • When identifying potential sources of relevant information, Sapient overlooks the project document repository.
  • Sapient asks the 14 custodians to review and select for production only what they believe to be relevant
  • When encountering technical problems with collecting from four of the custodians, Sapient makes no effort to preserve or recover the data.
  • Sapient refuses to share with Siemens any information about what sources or custodians were identified or what keywords were used.
  • Manual relevancy review does not include emails relating to the “status of the project” because Sapient asserts that project status was well documented in minutes, status reports etc.

Sapient initially produces just over 21,000 records, one-sixth of Siemens’ production, even though it has three times as many project staff.

During oral discovery, Sapient questions a Siemens representative on a document that was never produced. When pressed, Sapient admits that it inadvertently neglected the ResultSpace repository. In October 2012, two years after production was supposed to be complete, Sapient produces another 20,000 documents – effectively doubling its production.

Siemens brings a motion for further productions, including more custodians, transparency, and all documents relating to “project status”. Siemens attaches a “state-of-the-art” fifteen-page Discovery Plan (which is not appended to the reasons). While the parties agree on some elements, the main disagreement is about scope.

ISSUES

Is it really necessary (or proportional) for Sapient to add more custodians when so many documents have already been produced already, and the existence of any new emails that might be material to the issues is only speculative?

Is it really necessary for Sapient to find all emails relating to “project status” when this is already well documented in project status reports, meeting minutes and elsewhere?

Should the scope of relevance in the Discovery Plan be expressly limited by the words Subject to the principle of proportionality, as argued by Sapient?

DECISION

Siemens was granted partial relief. Sapient was ordered to:

  • Search emails and ResultSpace data for an additional eight custodians. (Assessment of the emails of these custodians would determine whether even more custodians might need to be added.)
  • Restore and search more backup tapes for the 10 original custodians.
  • Apply the original search terms to the complete email files (not just the self-selected emails).
  • Include emails about the “status of the project” when doing manual review of the search results.

Despite the Master’s concerns that what is “proportional” can be interpreted differently by each party, and that otherwise producible documents might be withheld as a result, the Master agreed that it would be useful to preface the scope of relevance with the words Subject to the principle of proportionality in order to show that the parties have paid attention to the provisions of rule 29.1.03(3)(e).[1]

COSTS

No costs were awarded under rule 29.1.05[2] because the parties did not comply with the Discovery Plan rule.

[1] “The discovery plan shall be in writing, and shall include any other information intended to result in the expeditious and cost-effective completion of the discovery process in a manner that is proportionate to the importance and complexity of the action.”

[2] “On any motion under Rules 30 to 35 relating to discovery, the court may refuse to grant any relief or to award any costs if the parties have failed to agree to or update a discovery plan in accordance with this Rule.”

Basic Litigation Preparedness (26/10/2015)

NOT READY FOR PRIME TIME?

​Most organizations that have gone through the pain of e-discovery recognize the benefits of a litigation response plan. Whether you are responding to a civil claim, a regulatory investigation, an access to information request, or participating in an arbitration, getting your hands on the relevant information quickly, efficiently and at a reasonable cost can be very tricky. Organizations that are ill-prepared are often taking big risks, wasting money and causing delays. For example:
  • data that is not collected properly may need to be collected again
  • custodians who are missed the first time around may be gone (with their data) when most needed
  • data might be collected from duplicate sources, or even collected twice from the same course
  • huge volumes of data may be collected, processed, searched and reviewed unnecessarily
  • critical repositories of relevant information are easy to miss
  • if the integrity or authenticity of produced data is challenged, no adequate response may be forthcoming due to the lack of process and documentation
  • the whole e-discovery process is tinged with panic which puts you at a disadvantage
  • legal fees and commercial vendor bills escalate out of control as more work is delegated

If e-discovery is treated as an emergency then you are not prepared.

GETTING STARTED – THE CRITICAL ELEMENTS

The basic elements of a litigation response plan include:
  1. Compliance with applicable records management and admissibility standards (ISO 15849 and many other standards and best practices listed hereCAN/CGSB 72.34). Proper records management is the foundation of the E-discovery Reference Model and the Information Governance Reference Model.
  2. Document retention policy updated to include electronic records. Many organizations have figured out retention periods and practices for document destruction – but these rules are usually impossible to apply in the case of unstructured data and e-mail. You need a new philosophy, perhaps best expressed today in the Capstone approach of the US government.
  3. Current data inventory and map. Many organizations store information in a variety of decentralized locations and applications. Users often have the ability to create undocumented data repositories. Getting a handle on where data resides and what format it is in can be crucial for a quick and effective litigation response. Moreover, it is usually these undocumented repositories where damaging records may reside. In one recent case, a party “forgot” to check its project document repository for relevant records. “During oral discovery, Sapient questions a Siemens representative on a document that was never produced. When pressed, Sapient admits that it inadvertently neglected the ResultSpace repository. In October 2012, two years after production was supposed to be complete, Sapient produces another 20,000 documents – effectively doubling its production.” Siemens Canada Limited v. Sapient Canada Inc2014 ONSC 2314.
  4. Policies, procedures and audit for backup and archive.  Every organization has procedures for backing up data. But here are a few realities:
    1. ​​Backup procedures are often put into place by the IT department, and often using default configurations, without regard to records management policies (if those even exist)
    2. Backup procedures, if documented, are often not followed in practice because IT staff are reluctant to “delete” anything that might conceivably be needed in the future
    3. Without an effective archive and backup policy, duplicative, legacy and documents long thought to be deleted are now a very active part of the e-discovery project
  5. Litigation hold policy, procedure and precedent. You know your organization best. While outside counsel can assist with drafting the legal content of a hold, your legal hold should be based on a precedent that fits the records management procedures used by your custodians.
  6. Collection process, documentation and oversight. It is often not necessary for an outside computer forensic specialist to image hard drives and collect data. However, unless your staff are trained in the appropriate processes, are provided with the appropriate tools, and have developed the habit of documenting what they do, costly outside services will always be recommended.
  7. Awareness and training. When custodians (users) receive a legal hold notice – do they know what to do? When the IT department is asked to search for documents or emails in a certain date range, do they know what to do? Or will they wing it? Everyone on the litigation response team must be trained like firefighters, and anyone who might be affected by an e-discovery project should be comfortable with the process.
  8. Testing and updating. Any response plan must be tested, modified accordingly, and updated regularly.
  9. Planning, communication and reporting. E-discovery usually involves internal staff from IT, records management, legal and operations. It also involves outside counsel, and may involve commercial suppliers. It is critical that all parties are in touch regularly when a response is triggered.
  10. Cross-disciplinary team with connections to outside counsel. Appointing a single paralegal or lawyer as the litigation response case manager is a great idea, and the strongest response is planned and executed by a cross-disciplinary team. The larger the organization, the larger and more diverse team is indicated.

 Useful References

There are many references on the internet: search for “litigation preparedness” or “litigation readiness” or “litigation response plan.” Here are a select few of the best:

Litigation Response Plan – series of videos and documentation from US lawyer Tom Howe. http://www.litigationresponseplan.com/

Stephen O’Leary – Litigation Response Planning. http://web.simmons.edu/~wilczek/ediscovery/oleary-armaboston.pdf

Government of Alberta, Litigation Readiness and Information Management, http://www.im.gov.ab.ca/documents/imtopics/Litigation_Readiness_and_IM_Tip_Sht_1.pdf.
Litigation Response Planning and Policies for E-Discovery, http://library.ahima.org/xpedio/groups/public/documents/ahima/bok1_036581.hcsp?dDocName=bok1_036581

Richard Medina, How to Develop and Implement Your Discovery Readiness Program – ​http://www.cmswire.com/cms/information-management/how-to-develop-and-implement-your-discovery-readiness-program-020464.php.

Litigation Preparedness in a Nutshell (27/10/2015)

BASIC CONFLICT

Clients demand low cost, low risk and low effort e-discovery.
The law (and outside counsel) demands admissibility and defensibility.ADMISSIBILITY

To defend challenges to admissibility we need to prove the integrity of the information system (Evidence Act). This supports our claim of authenticity (the evidence is what it purports to be) and best evidence.

Proof of anything requires documentation. The only way to prove authenticity of an individual record is with metadata. This requires appropriate (and secure) methods and tools for preservation and handling of potentially relevant data.

The integrity of the information system itself can be proven with evidence of compliance with a standard such as ISO 15489 (Records Management) or CGSB 72.34 (Admissibility of Electronic Records).

Good RIM practices are the foundation of the EDRM.

DEFENSIBILITY

To defend challenges to defensibility we need to prove that our collection is complete (subject to objective claim of proportionality). This means our methods and tools for searching, collecting and reviewing must comply with the rules, developing case law and available and emerging technologies. Best practice is Standard Operating Procedure (litigation response plan) not Seat of the Pants.

Self-collection is frowned upon. Use of modern tools including machine learning is encouraged. Defensibility also requires co-operation and documentation.