Guide to the Federal Court of Australia's revised Practice Note 17.

Introduction

The Practice Note applies, subject to the Court’s discretion, to discovery in all legal proceedings where there is likely to be over 200 discoverable electronic documents. In Australia, the Practice Note holds significance as the first to effectively mandate electronic discovery for an entire court.

The Practice Note is not intended as an unwieldy set of instructions or to impose a new set of discovery obligations. Rather, it is designed as a framework to provide guidance and flexibility in the use of technology, with accompanying checklists, sample protocols and a glossary. This article explores the current practice of discovery in the Federal Court and outlines the significance of the Practice Note’s electronic discovery framework for information professionals.

Pre-Discovery

The Practice Note sets a clear expectation for parties, and their representatives, to proactively cooperate with and assist the Court, by “identifying documents relevant to the dispute as early as possible and dealing with those documents in the most efficient way practicable” (emphasis added).

This expectation is followed by seven ‘efficient document management’ observations made by the Court, and contained in the Practice Note. Notable observations include that “printing electronic documents” or “photocopying paper documents” for the purpose of discovery “will generally be a waste of time and money.”  Further, an overriding observation is that “lawyers should endeavour to use technology to ensure that document management is undertaken efficiently and effectively”.

Discovery Plans and the Pre-Discovery Conference

To achieve this, the Court has the discretion to order parties to attend a Pre-Discovery Conference (“PDC”), as early as possible in the proceeding, to agree upon a practical and cost-effective discovery plan.  For those familiar with the US e-discovery procedure, the PDC may be seen as the equivalent of the FRCP Rule 26(f) “meet and confer” process.

If a PDC is held, up to three (3) representatives from each party may attend.  One of those three representatives must be appointed the “Discovery Liaison”.  The Discovery Liaison acts as the single point of contact for the party in relation to the matters addressed at the PDC.  An expert or advisor may also be engaged to attend and facilitate the mediation of any matters raised at the PDC.

The Practice Note is accompanied by a Pre-Discovery Conference Checklist (“PDCC”).  The PDCC sets out matters that the parties are expected to consider at the PDC, including:

Prior to attending the PDC, each party must understand an opponent’s claims against it, as set out in their pleadings, and be in a position to translate such claims to categories of potentially discoverable documents.  This ideally requires legal counsel to collaborate with their organisation’s information professionals, at the earliest opportunity, to identify such categories of potentially discoverable documents.

Once potentially discoverable documents are identified, each party must be in a position to promptly identify those locations, which will be searched for potentially discoverable documents.
This ideally requires legal counsel and the organisation’s information professionals to:

1. confer as to the organisation’s information management practices; and
2. devise an efficient methodology for performing a reasonable search in accordance with Order 15, rule 2(5) of the Federal Court Rules.

Each party must also be in a position to highlight, and importantly, justify all locations that will not be searched due to their reasonable inaccessibility.  Legal counsel may require the information professional to provide supporting documents, for example. a copy of the organisation’s document retention policy (“DRP”). Further, the information professional may be required to describe any proposed search strategies.  For example, if keywords are proposed as a filtering method – being able to address what technology will be used to perform the keyword searches, the use of sampling techniques and provision for search validation and audit.

Whilst the Practice Note does not impose any new obligations in relation to preservation, it is recommended that parties agree upon a strategy to preserve potentially discoverable documents.

For each party, this may require the respective information professional to assist legal counsel in the identification of key custodians within the organisation, so that formal preservation notices may be provided.  The information professional may also need to enforce “legal hold” strategies over potentially discoverable documents, which overrule the standard DRP, upon direction of legal counsel.

The engagement of computer forensic professionals to make a “forensic image” of computer hard drives and other electronic storage media containing potentially discoverable documents should also be considered at this time.

Parties have an opportunity to expand beyond earlier agreements, to identify any potential problems surrounding discoverable electronic documents and agree upon a suitable strategy so that they may be managed through the entire discovery lifecycle.  For example, structured data (e.g. records within a database), proprietary or uncommon formats which may not be easily reviewed by a lawyer or exchanged as an electronic image representation.
At this time, parties should also consider the efficiencies of converting paper documents to an electronic image representation.

Parties should agree upon a timetable for discovery.  This may include the parties agreeing to a discovery production schedule for the exchange of a voluminous set of discoverable electronic documents, in batches, over a number of weeks.

Parties are also advised to exchange their “best preliminary estimate” for their respective costs associated with discovery.  The costs of an external consultant or service provider are typically only documented.  However, information professionals should also be in a position to provide estimates of the internal personnel and technology resources likely to be used with, at least, time-based metrics.

Discovery is the most time and cost intensive pre-trial litigation process.  Diligent documentation of the resources used to fulfill each party’s discovery obligations is essential if questions are later raised in relation to completeness of discovery.

Some discoverable documents may be subject to a claim of privilege or confidentiality, in part or whole.  Parties should agree upon a strategy to manage such documents.

For example, parties may agree to the accepted method of withholding the disclosure of such documents, but including them in their List of Documents.  If any discoverable documents, subject to a claim of privilege are exchanged, a claim of “inadvertent disclosure” can be raised.

Alternatively, the parties may agree to manage privilege on a “without prejudice” basis.  That is, exchanging all discoverable documents, and then instituting a process where the party giving discovery can “claw back” documents subject to a claim of privilege, by notifying the receiving party.  Upon notification, the onus shifts to the receiving party to destroy the document and not to use the privileged information. This concept has its origins in the US FRCP Rule 26(b)(5).  However, the status of any such agreement in the Court is presently unsettled due to section 122 of the Evidence Act 1995 (Cth).

The related issue of redacting of part-privileged or confidential documents is typically defined in the Document Management Protocol.

A Document Management Protocol (“DMP”) is also traditionally referred to as a “document protocol”.  A DMP essentially specifies the form in which discoverable documents, and associated metadata fields, are to be exchanged for discovery.

The Practice Note includes a Default Document Management Protocol (“DDMP”) intended for use where the volume of discoverable documents is between 200 and 5000.  For discovery expected to exceed 5000 documents, a sample Advanced Document Management Protocol (“ADMP”) is included for guidance.  Parties may select either DMP, amend or agree to devise their own, at the Court’s discretion.

Traditionally, parties exchanged their List of Documents as a paper document.  The DDMP requires parties to exchange their List of Documents as an electronic spreadsheet.  The spreadsheet format is undefined.  However, it is anticipated that both comma-separated values (“CSV”) and Microsoft Excel (“XLS”) formats will be used for this purpose.

Within the spreadsheet, each party must describe each discoverable document using eight (8) standard metadata fields (e.g. Document Title, Document Date), and an additional 11 optional metadata fields.  Electronic discovery software can automatically extract metadata from electronic documents for population into a spreadsheet.  In contrast, the metadata for paper documents, converted to an electronic image representation, will typically need to be manually entered into the spreadsheet.

Accompanying the List of Documents, parties must exchange all discoverable documents, except those subject to a claim of privilege or confidentiality, preferably as a searchable electronic image representation in Portable Document Format (“PDF”) instead of the traditional single-page Tagged Image File Format (“TIFF”).  The PDF version is undefined.  However, it is anticipated that version 1.7, as the ISO 32000-1 standard, will be prevalent due to its ability to store both paper and electronic documents and support for embedded searchable text and redaction.  For the purposes of discovery, use of long-term archival PDF (“PDF/A”) is not required.  In addition, parties may also agree to exchange any or all discoverable documents in their native, electronic form.

Regardless of the format of electronic document exchange, parties should also take care to appropriately identify and manage any duplicate documents.

Each discoverable document must also be uniquely referenced using a Document Identifier (“Document ID”).  The Document ID is the first page of an electronic image representation.  Discoverable documents exchanged only in their native, electronic form are only assigned one Document ID, regardless of how many pages are contained within the document.  The Document ID is typically stamped on the top-right corner of an electronic image representation.

The spreadsheet and accompanying discoverable documents will typically be exchanged on a read-only medium, i.e. CD or DVD.

In contrast, the sample ADMP is similar to the DMP traditionally used by top-tier law firms. The sample ADMP references the standard Ringtail load file format (export.mdb) as a database to store the List of Documents for a party.  Despite being owned for a number of years by foreign interests, Ringtail is still widely accepted as a document review and production platform in Australia.

Any unresolved issues between the parties must also be documented.

Following agreement as to a discovery plan, the Court may order one or more parties to give discovery of documents within their possession, custody or power.  In accordance with existing Practice Note 14, the Court will readily balance the benefit of a potential order for discovery against the burden and obligation involved in a party giving discovery.

Each party must give discovery in accordance with the DMP.  An opponent may question the completeness of a party’s discovery by applying to the Court for an order of further discovery.  The party giving discovery will have the opportunity to justify their discovery process – However, preparation remains the key to success.

The vast majority of proceedings will settle prior to trial.  However, the Practice Note importantly provides a Pre-Trial Checklist, which provides practical considerations, in a similar form to the PDCC, for consideration by the Court and the parties involved.

The Court encourages lawyers to contact their local eRegistrar for assistance in relation to the Practice Note.  The appointment of eRegistrar’s in each Court District Registry fills an important void for lawyers as they deal with the significant transition from paper to electronic discovery.

The Practice Note is not intended to serve as a process to overtake the outcome.  That is, the discovery of electronic documents should not become an issue which disrupts the ability of the Court to deliver “just resolution of disputes, as quickly, inexpensively and efficiently as possible”. 

Responsibility for electronic discovery ultimately resides with an organisation’s legal counsel and information professionals to proactively oversee their information management practices and electronic discovery strategy should the need to give discovery arise.

Seamus E. Byrne
March 2009