Electronic disclosure and hidden costs of litigation

We write regularly on this blog about the dilemma facing businesses and individuals in the “real world” – what we mean by this is that the sorts of disputes that tend to get reported, either formally in case reports, or in the news, are often cases that are high value, involving big businesses. In those

Home » Disputes » Electronic disclosure and hidden costs of litigation

We write regularly on this blog about the dilemma facing businesses and individuals in the “real world” – what we mean by this is that the sorts of disputes that tend to get reported, either formally in case reports, or in the news, are often cases that are high value, involving big businesses. In those cases, it makes sense to invest a lot of money in legal fees to explore every technical argument, legal point or defence.

Most legal disputes are lower value, typically less than £10,000.00 and this means they are generally allocated to the small claims court.

This in turn creates a degree of possible comfort about the lack of risk of a costs order against you (that’s the general rule, subject to exceptions) but also creates a dilemma – do you seek the advice of  lawyer or not ?

Whether you choose to get advice for a litigation solicitor or not, this may well not be the end of the story, or potentially of  additional expenses, some of which may be recoverable, others potentially not

First, you need to take into account court fees, which are payable on a scale to issue a claim depending on the value of the claim. If you make any applications as the case proceeds, further court fees will be payable. If you obtain a judgment and the defendant doesn’t pay, there will be additional fees to issue whatever form of action you decide on to enforce, such as applying to place a charge over a property owned by a debtor, instructing bailiffs and so on.

One increasing area of potential cost, whether in time or hard cash, which is easy to overlook, relates to disclosure generally, and electronic disclosure in particular.

Electronic disclosure

In the last 10 years the world has changed hugely. With the majority of legal cases it used to be the case that almost all evidence which was not oral evidence was paper based. The parties had obligations to search for and disclose all documents in their possession, custody or owner.

A simple example

However, now, many cases will involve evidence which is stored on any number of devices, software and hardware. Taking a simple example, A contracts with B that A will sell B 10,000 widgets, at a certain cost per unit and deliverable within 14 days. That agreement is in writing, on paper. However, after a week A texts B to say that there will be a delay in the delivery. The goods are delivered a week late and B claims the right to reject. A asserts that the contract was varied due to his text and that B accepted the delay. Aside from the technical legal issue, the text is obviously relevant, especially if B denies he received it. Let’s also say that both A and B have smartphones where texts are perhaps backed up after a few weeks. Neither A nor B can access texts going back as far as the one in dispute. In that situation, it may be necessary to involve an expert in data retrieval, and that will cost money.

E-disclosure in complex or high value cases

In higher value or complexity cases, the exercise of analysing what’s relevant and needs to be disclosed is amplified hugely – in many cases now, highly sophisticated search software will need to be used to analyse email and other data, often by reference to categories or keywords, so as to identify possibly relevant data. Remember also that the duty to disclose on all parties to a dispute is to disclose what’s relevant, whether the relevant data, information or documents is helpful to your case or otherwise.

The above is a simple example of the way in which electronic disclosure has become very important. Given that data can be stored or perhaps deleted on so many different devices aside from pure email, it can be a real challenge to obtain/retrieve it, possibly even in relatively low value cases.

Data may be deliberately deleted

There are many cases and disputes where a party will deliberately try to delete data, to cover his or her tracks. Common examples are where an employee has accessed confidential data unlawfully, perhaps as a prelude to joining a competitor. Fraud is another obvious example, or in a somewhat less sinister connotation, if an employee has made an error and panics and tries to cover it up, by possibly deleting emails and so on.In many situations, the data can be retrieved, but it will be expensive, as will the necessary work to document the processes used to retrieve and in all probability, the need to prove that there was an attempt to permanently delete, when and by who.

Civil Procedure Rules regarding electronic disclosure

There is now a specific set of guidelines and rules about electronic disclosure, which you can read here.

In the context of this article, the most important point to take on board is that on the face of it, the specific rules about electronic disclosure only apply to cases which have been allocated to the multi track. This is to say, cases where the amount in dispute is over £25,000.00. However, there is specific discretion for Judges to compel either or both parties to take reasonable and proportionate steps to comply with requirements for electronic disclosure in any case, even a small claims matter.

 

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