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18 September, 2016
Often a major cost of litigation is related to the review and disclosure of evidence. Despite some early suggestions to the contrary, the same issues often arise in arbitration, particularly in circumstances where a tribunal does not effectively contain the disclosure process. Even where disclosure is not ordered or is restricted, document review can be both time consuming and expensive. In fact, it is one of the few areas in which technology and large volumes of electronic data have exacerbated rather than remedied a problem for clients.
A necessary evil?
There is no way to avoid some level of review related costs when a dispute arises. This cost can be found in the internal resources necessary to understand the dispute, the review of documents by external and internal lawyers in order to provide advice on the merits of the dispute and, finally, the review necessary to prepare and conduct a case. Even if disclosure is not ordered by an arbitral tribunal, in order to properly present a case, an in-depth understanding of the factual matrix of a dispute is required both to properly present the case and to prevent surprises during the course of the litigation. It follows that this can only be obtained by reviewing the relevant materials.
It also goes without saying that a failure to conduct a review may potentially lead to important points being missed or unpleasant surprises during the course of a dispute. In our experience, it is better to proactively manage unfavourable matters than to ignore them. In order to do this, a complete picture is required.
How then should documents be managed to maximise efficiency and minimise cost?
What can be done?
Put in place a system – and stick to it
Even before a dispute arises, it is advisable to ensure that proper protocols are in place to ensure that the various business and legal teams apply common systems regarding the storage, naming and handling of both formal documents (contracts, sales orders, minutes, etc.) and more informal documents (correspondence, emails, notes of meetings and the like). Not only will this make the identification, retrieval and review of relevant documents more efficient, it should also reduce both the legal and internal costs associated with document review.
A system should help you find the right documents
An important part of any system is a protocol for contract management and version control. This should specify:
- where authoritative versions of contracts are to be kept;
- a process for ensuring that any such documents or amendments to them are filed in a timely manner; a process for ensuring that the document is stored in its final (executed) form (including all counterparts, variations and amendments);
- that the contracts are indexed and summarised to note contact information, financial information, related documents (such as a parent company guarantee or side letter), key dates and other key provisions; and who is responsible for managing the document(s).
Not only does a process such as this ensure that the correct documents can be located quickly when required, it also assists in ensuring that the negotiation, execution and storage process is completed properly and may result in a missing signature being detected when the parties are still on speaking terms.
Protecting information
A well drafted protocol will also provide instruction on how employees should treat and label privileged, confidential and/or commercially sensitive information.
Key points to note are:
- access to and distribution of sensitive documents (for example, legal advice) should be on a 'need to know basis' only.
- documents should be labelled to identify whether they are confidential and/or privileged.
A guide to privilege concepts under English law can be found here
Dispute Management
Once a dispute arises there are a few steps that can be taken to ensure that document review is conducted efficiently.
Identify Key Documents
Key documents should be identified early and collated. Where there are related documents or external documents referred to within key documents, they should also be reviewed.
Document Retention Notices
When a dispute arises it is common practice to circulate an internal notice requiring the preservation of all relevant documents.
This should occur as a matter of course during the document identification process as it may become a credibility issue if documents are, for whatever reason, lost or destroyed.
Identify Key Individuals
Key individuals should be identified and their areas of relevant knowledge noted. This is important to ensure that all of the relevant documents are located and that the context in which they were created is fully understood.
Software
Document identification and management can be improved by using various software solutions. Where a dispute is of sufficient magnitude, consideration should be given to adopting a system that facilitates the indexing, review, removal of duplicates and production of documents.
As technology has improved, the number of systems available has increased. Before adopting a system, consideration should be given by both clients and their lawyers to the following:
- the language of the documents;
- compatibility with existing databases and file types;
- how the system is to be updated and maintained;
- ongoing costs associated with the use of the system;
- ease of access and file sharing capabilities;
- ongoing costs; and
- document security.
A note on electronic disclosure can be found here.
Take away points
The earlier the better – protocols for identifying and managing relevant information should be put in place early;
Information should be organised; and Access should be controlled.
By taking note of the above and giving careful thought to ensuring that document management practices are routine and systematic, a business can save itself time, money and incurring frustration when a dispute does arise. This will leave more time for clients and their lawyers to focus on the dispute at hand.
For further information, please contact:
Ronnie King , Partner, Ashurst
ronnie.king@ashurst.com
