Discovery e-news | Final Issue

Issue 9 | May 2011 View original format

Final Report – now available!

Managing Discovery: Discovery of Documents in Federal Courts (ALRC Report 115) was tabled today in federal Parliament, and is now available on the ALRC website. You can view it in HTML, download it as a PDF, or purchase the report in book format.

The Report makes recommendations about, among other things: the production and inspection of documents prior to discovery; when parties should file discovery plans; best-practice guidelines on the formation and content of discovery plans; judicial and practitioner training; the role of registrars and referees; costs orders; pre-trial oral examinations; and data collection.

The ALRC believes that the net effect of its recommendations will be that:

• judicial officers are encouraged and supported in their role as robust case managers;
• parties and practitioners will have a clearer understanding of what is expected of them in relation to discovery obligations;
• the scope of discovery will be defined more clearly and in the context of an understanding of how information is stored and can be accessed; and
• the clarity of expectations and certainty in obligations will help to maintain proportionality in discovery costs.

The Discovery team would like to thank everybody who participated in the Discovery Inquiry – those who took part in consultations, left comments on the blog, attended roundtable discussions and/or made formal submissions.

This is the final e-news for the Discovery Inquiry. If you wish to keep informed about implementation of the ALRC’s recommendations, whether in relation to this Report or ALRC inquiries generally, please subscribe to the ALRC Brief.

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View or download Final Report >>

Advocating a facilitative approach that emphasises the role of the judiciary in robust case management, particularly in large and complex cases, is one of the key reforms suggested by the Australian Law Reform Commission (ALRC) in its most recent inquiry into the process of discovery in federal courts. The ALRC’s final report—Managing Discovery: Discovery of Documents in Federal Courts (ALRC Report 115)—was tabled today in federal Parliament and is the result of a 10-month inquiry.

Having considered carefully the views, concerns and feedback expressed during consultations and in submissions, and having conducted its own research and deliberations, the ALRC has developed 27 recommendations for improving the practical operation and effectiveness of the process of discovery. The recommendations are underpinned by eight policy principles, including those comprising the Government’s Strategic Framework for Access to Justice in the Federal Civil Justice System.

ALRC President Professor Rosalind Croucher said:

“The underlying premise for this Inquiry was that the costs of discovery—which can be very high—may inhibit access to justice and result in an undue public cost. The ALRC heard that, in many cases, there are literally hundreds of thousands of documents stored electronically that may be called on during a discovery process and you can imagine the cost that providing access to all these documents can involve. The challenge for us was to recognise the important role that discovery can play in facilitating the resolution of disputes, while reviewing its operation in the context of the reality of modern information management in a digital age—the problem of simply too much information.”

The Report makes recommendations about, among other things, the production and inspection of documents prior to discovery; when parties should file discovery plans; best-practice guidelines on the formation and content of discovery plans; judicial and practitioner training; the role of registrars and referees; costs orders; pre-trial oral examinations; and data collection.

Part-time Commissioner the Hon Justice Bruce Lander commented, “There is an uneasy tension between the time and money that discovery can involve and the right of parties for a reasonable opportunity to present their case. The ALRC considers that the most effective way to facilitate this process is through robust case management. Such a model preserves the discretion of the judge while, at the same time, introducing greater clarity of expectations in relation to discovery.” Part-time Commissioner the Hon Justice Arthur Emmett added, “A key focus of the recommendations is on reinforcing the flexibility that Federal Court judges have in the case management of litigation so that, for example, any discovery regime can be tailored to suit the particular issues in each case.”

The ALRC believes that the net effect of its recommendations will be that:

• judicial officers are encouraged and supported in their role as robust case managers;
• parties and practitioners will have a clearer understanding of what is expected of them in relation to discovery obligations;
• the scope of discovery will be defined more clearly and in the context of an understanding of how information is stored and can be accessed; and
• the clarity of expectations and certainty in obligations will help to maintain proportionality in discovery costs.

ALRC Report 115 is available to purchase from the ALRC or is free to download from www.alrc.gov.au.

Presentation by Patrick Collins, Senior Legal Officer, Australian Law Reform Commission at Rydges Melbourne, 14 April 2011

Acknowledgments

First, may I acknowledge the traditional custodians of the land on which we meet—the Wurundjeri people of the Kulin nation—and pay my respects to their elders, both past and present, as well as acknowledging any Indigenous people in attendance today.

As part of its Reconciliation Action Plan, the Australian Law Reform Commission is committed to making an ‘Acknowledgement of Country’ at events like this—and I am honoured to do so today.

Secondly, I would like to thank eDiscovery Asia Pacific for inviting the Australian Law Reform Commission to address this forum.

I was involved in the ALRC’s Discovery Inquiry from the outset, on secondment from the Attorney-General’s Department, and I am delighted to have the opportunity today to speak about the project.

Introduction

On 10 May 2010, the Attorney-General asked the ALRC to identify law reform options to improve the practical operation and effectiveness of discovery of documents in litigation.

The ALRC delivered its report on the Discovery Inquiry to the Attorney-General on 31 March 2011. The report is yet to be tabled in Parliament so I won’t talk about the ALRC’s final recommendations for reform in detail.

I will focus on the process of developing a law reform response and discuss the major themes that emerged in the Discovery Inquiry—with reference to the public Consultation Paper and submissions.

Concerns about discovery, in terms of the volume of documents that must be managed in litigation, are not new.

In his 1852 novel, Bleak House, Charles Dickens described the record-keeping systems in the Court of Chancery as ‘mountains of costly nonsense, piled before them’.

The mountains of papers which Dickens described might look like molehills compared to the galaxies of electronic data managed in contemporary litigation.

It is important that discovery issues be reviewed through the lens of modern technologies, but equally important is the independence of the ALRC in conducting that review.

As French novelist, Marcel Proust, said: ‘the real voyage of discovery consists not in seeking new landscapes but in having new eyes’.

Background to the Inquiry

Discovery is a landscape well-trodden by many commentators and law reform bodies. In the ALRC’s landmark inquiry into the federal civil justice system in the 1990s culminating in the report, Managing Justice, discovery was singled out as ‘the procedure most open to abuse, the most costly and the most in need of court supervision and control’.[1]

It is not just the high cost associated with discovery that causes concern. It is the low value for money that prompts criticism of the discovery process.

The 2009 report by the Attorney-General’s Department, A Strategic Framework for Access to Justice in the Federal Civil Justice System, noted that, ‘The cost of discovery continues to be very high, and often disproportionate to the role played by discovered documents in resolving disputes’.[2]

Other reports

A key objective of the Strategic Framework is to ensure that the costs and methods of dispute resolution are proportionate to the issues in dispute.[3]

This was also the driving principle in Lord Jackson’s Review of Civil Litigation Costs in England and Wales in 2009. His brief was to find ways of making costs more proportionate in relation to the sum or other remedy at stake in civil actions, whilst promoting access to justice.[4]

Lord Jackson paid particular attention to the costs of disclosing documents, with a specific focus on e-disclosure.[5]

The costs associated with discovery also featured prominently in the Victorian Law Reform Commission’s 2008 Civil Justice Review.[6]

These and other inquiries provided fertile ground for the ALRC in its Inquiry into discovery in the federal courts.[7]

Evidence-based reform

Each ALRC Inquiry must be built upon a solid evidence base. As the ALRC commented in the Managing Justice report: ‘failed efforts at reform often proceed on the basis of anecdote’.[8]

Building an evidence base is facilitated by the ALRC’s statutory power to ‘inform itself in any way it thinks fit’ for the purposes of an inquiry.[9]

The exercise of this power depends on three principal variables: first, the nature and scope of the inquiry; secondly, the timeframe in which it is to be discharged; and thirdly, the budget and resources available in the inquiry.

Data collection

If resources permit, the evidence base might include empirical studies. For example, the Managing Justice Inquiry extended over four years and the ALRC was able to conduct an extensive survey of litigation costs.[10]

In the Discovery Inquiry, the proportionality of discovery costs would have been amenable to such empirical investigation.

However, the Discovery Inquiry was only about 11 months long and a full team of ALRC officers was not available at the start of the Inquiry—not until the ALRC had finished a major review into family violence across the Commonwealth, states and territories.

I was seconded from the Department to start the Inquiry in May 2010 but I was on my own until December, working with the Commissioner in charge, Prof. Rosalind Croucher.

The timeframe and resources allowed for a limited form of qualitative research—through a questionnaire canvassing lawyers’ impressions of discovery.

The ALRC received only a few responses to the questionnaire. But they provided practical examples which contextualised the proportionality of discovery costs, in terms of the value of the documents in the context of the litigation.

At the same time, the ALRC’s Consultation Paper proposed that data collection facilities should be established in the Federal Court to measure the proportionality of discovery costs.[11] Michael Legg, of the University of New South Wales, responded that this was ‘the most significant suggestion’ in the Consultation Paper, ‘as it would allow reform in the Federal Courts to be driven by fact rather than fashion’.[12]

However, discovery is not a matter that can be measured entirely in precise terms. The public interests and values that underpin discovery—such as truth-seeking and fairness to the parties—are also of significance in developing law reform.

Community consultation

A critical means of building evidence around reform that is so founded on values and principles, such as access to justice, is community consultation. In fact, widespread consultation is a hallmark of best practice in any law reform.

The nature and extent of this engagement is normally determined by the subject matter of the reference—but the timeframe and budget in which the inquiry must be completed are also decisive factors.

Measures can be taken to accommodate time and resource factors, like holding consultations over the telephone or online, but a solid basis of face-to-face meetings is necessary to engage the community in law reform.

National consultations

Consultations in the Discovery Inquiry were held with litigants—both in the business and government sectors—and with members of the legal profession—on both the applicant and respondent sides—as well as members of the judiciary, litigation funders and the litigation support industry, community legal centres and public interest advocates.

47 consultations were held in the course of this Inquiry around Australia—principally in Sydney and Melbourne—as the hubs of commercial litigation in the Federal Court—as well as Canberra—home to many government stakeholders.

We were heartened to hear the Law Council of Australia say, in its submission to the Inquiry, that the ALRC was ‘highly flexible and considerate in conducting consultations during this Inquiry’.[13]

It is always very reassuring to receive positive feedback on the conduct of an ALRC inquiry, particularly from the Law Council.

International consultations

The ALRC also consulted with experts in other jurisdictions during this Inquiry. This included the Senior Master of the Queen’s Bench Division of the High Court of England and Wales, Senior Master Steven Whitaker, who is a distinguished commentator on e-disclosure issues in the U.K.

In addition, the ALRC was in contact with the High Court of New Zealand’s Rules Committee—which published consultation papers and draft Court Rules in 2010 to reform the laws of discovery.[14]

The experience of other jurisdictions with similar issues is always a valuable consideration in any ALRC inquiry. And the ALRC was expressly directed to have regard to such experience in the Terms of Reference for its Discovery Inquiry.

Online consultations

Another aspect of the ALRC’s consultation strategy is the use of online tools, to reach a wider audience.

This included a regular e-newsletter on the Discovery Inquiry, to keep interested people informed about progress. In total, there were 226 people who subscribed to the Discovery e-newsletter.

The newsletter also provided a link to the ALRC’s Discovery Blog, which offered insight into particular issues the ALRC was considering in the review and facilitated public discussion of those issues.

Valuable contributions to the Discovery Blog were made by a few stakeholders. In addition, there were 1522 other people who read the blog during the course of this Inquiry.

This allowed the ALRC to make its internal dialogue more transparent to stakeholders—and the reform process more accountable, as a result.

Consultation Paper

An essential means of gathering evidence in this Inquiry was the release of the Consultation Paper in November 2010, seeking submissions in response to 53 questions and 15 proposals for reform.

Usual ALRC process would have questions explored through an Issues Paper and responses taken into account before the release of a Discussion Paper setting out proposed reforms. The combination of these steps in a single Consultation Paper was necessary to accommodate the timeframe in this Inquiry.

The release of the Consultation Paper was marked by public seminars in Sydney and Melbourne.  In Sydney, the Federal Court hosted the ALRC in its ceremonial court-room for a panel discussion introduced by Chief Justice Patrick Keane.

The Melbourne event was roundtable forum hosted by the University of Melbourne and focussed on legal ethical issues arising in discovery practice.

The Consultation Paper was received well by stakeholders. One submission commented that it provided ‘a thorough overview of the existing procedures as well as raising many sensible proposals for dealing with some of the practical problems regarding discovery’.[15]

Submissions

The ALRC received 30 submissions to the Discovery Inquiry, including submissions from the courts and government departments, law firms and law societies, barristers, academics, litigation support service providers and public interest organisations.

Submissions are an invaluable resource for the ALRC. They demonstrate the diversity of views amongst stakeholders, and indicate whether particular proposals for reform are supported by the community.

They also represent a considerable amount of work for stakeholders and the ALRC greatly appreciate the contributions of all participants.

Appointed experts

In addition to the contribution of expertise by way of consultations and submissions, specific expertise is obtained through an Advisory Committee and the appointment of part-time Commissioners.

In this Inquiry, the Advisory Committee included judges, lawyers, corporate and government officers, and academics—all of considerable seniority and repute.

Two part-time Commissioners, both Federal Court judges, were appointed to this Inquiry: the Hon Justice Arthur Emmett and the Hon Justice Bruce Lander. They joined two standing part-time Commissioners, also judges of the Federal Court: the Hon Justice Susan Kenny and the Hon Justice Berna Collier.

Policy landscape

Through consultations and submissions, as well as the ALRC’s own research and deliberations, a number of key themes emerged in the Discovery Inquiry.

These themes paint a picture of the policy landscape and the areas of tension that presented challenges in this Inquiry.

Discovery rationale

As a starting point, the underlying rationale of the discovery doctrine was broadly considered to be sound and relevant in contemporary litigation.

The central aims of discovery in fact-finding and decision-making are cornerstones of litigation. Discovery allows the parties to test the merits of their case and enables the court to make informed determinations of the parties’ rights.

Discovery is also fundamental to achieving fairness between the parties to litigation. It has been described as ‘playing with all the cards face up on the table’.[16]

These are the very purposes for which discovery was originally developed in the early practice of the Court of Chancery. Discovery provided equitable relief from the rigid rules of the common law courts, which were limited in their methods of gathering evidence.[17]

The same justification for discovery seems equally applicable in modern litigation. A number of submissions commented about the important role that discovery plays today. For example, the Australian Government Solicitor advised that discovery ‘helps to ensure that parties in the adversarial process can proceed on an equal footing and without ambush, and that relevant materials are before the court’.[18]

Judicial case management

Another premise widely accepted by stakeholders is the court’s role in managing litigation, including any discovery process.

In the Managing Justice inquiry, the ALRC noted a shift in the traditional adversarial system; towards judicial—rather than lawyer or party—control of litigation.[19]

This trend was given statutory force with the commencement of s 37M of the Federal Court of Australia Act 1976 on 1 January 2010.

This section establishes the overarching purpose of civil practice and procedure—namely, the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible.

It also provides that civil practice and procedure provisions, which include the Federal Court Rules, must be interpreted and applied, and any power conferred or duty imposed by them must be exercised or carried out, in the way that best promotes the overarching purpose.

The Explanatory Memorandum to this amendment explains that s 37M applies to both the Court and the parties to proceedings, ‘in recognition of the fact that it would not be possible for either the Court or the parties to achieve this objective without the assistance of the other’.[20]

Section 37N of the Act extends its application to the parties’ lawyers, who must assist the parties to comply with the duty to uphold the overarching purpose of civil practice and procedure.

Therefore, responsibility lies both on the Court and the parties, through their legal representatives, to manage a proportionate discovery process that facilitates the resolution of disputes.

This can be seen in Federal Court Practice Note CM 5 which states that parties should expect the Court to ask whether discovery is necessary at all and, if so, for what purpose?

Discovery in mega-litigation

To the extent that there is a problem with discovery, it is typically found in the practicalities of large, complex and high-stakes litigation—what Justice Sackville has called ‘mega-litigation’[21]—in the Federal Court of Australia.

These types of cases are marked by a large number of parties and a broad and complex range of factual and legal issues in dispute.

Often the parties are determined to pursue all avenues of inquiry, and not to give away ‘points’ too early—as Roger Forbes of Mallesons Stephen Jacques, who represented Telstra in Seven Network v News Limited (C7), said of the parties: ‘we’re entitled to run all the points we want to and we don’t have to, at the outset, decide which are the best ones and which are the bad ones’.[22]

The expanse of issues disputed in mega-litigation has the consequence of setting broad boundaries for the discovery of relevant documents.

Impact of technology

Another distinguishing feature of mega-litigation is the sheer volume of data that must be managed in trade and commerce. For example, in Betfair v Racing NSW, the applicant managed the electronic records of over 2.5 million customers, which occupied some 21 terabytes of memory growing at 70 gigabytes per day.[23]

Advances in computer technologies have enabled exponential growth in the number of records created and stored in an electronic format. It has been estimated that 98% of corporate records exist in electronic form only.[24]

This has a multiplier effect on the costs of discovery. The vast amount of electronic material that must be reviewed during discovery in mega-litigation is a contributing factor to the high costs, but the expertise required to retrieve and produce documents in an electronic format carries its own cost.

One horror story recounted to the ALRC in this Inquiry was about discovery of documents stored on outmoded backup tapes. Hardware had to be reconstructed and software redeveloped, at great expense, in order to extract the documents—which turned out to be completely irrelevant.

However, instances of nightmare discoveries represent only a portion of the Court’s overall caseload.  During consultations, some Federal Court judges commented that discovery is straightforward and routine in about 80% of cases.

Utility of discovery

Even in the small number of cases where there are problems associated with discovery, many practitioners suggested during consultations that criticisms of discovery are overstated.

For example, Justice Sackville remarked in the C7 case that estimated legal costs of $200 million—in a claim for damages of between $195 and $212 million—was bordering on the ‘scandalous’. [25]

However, during the Discovery Inquiry, a number of lawyers and litigation funders estimated that discovery costs are typically around 20% of the total litigation expense.

Similarly, Justice Finkelstein observed that in the C7 case, the overall yield of discovery—in terms of the admitted evidence produced—was well below 5% of the documents discovered.[26]

Yet, many lawyers commented that this figure misrepresents the utility of discovery—a single discovered document may turn out to be critical. Apart from being evidence at trial, discovered documents facilitate early settlement between the parties and inform the issues which become crucial in proceedings.

Nevertheless, reform of discovery practice and procedure—in cases where it can be problematic—was generally welcome by stakeholders in this Inquiry.   

Access to justice

Discovery may be a vital component of justice in some litigation, but the cost and delay incurred in some cases threaten the very foundations of the practice itself.

Rather than making litigation fair and efficient, discovery can be so burdensome in some cases as to dissuade litigants from pursuing their rights in court and, as such, discovery imposes a barrier to justice.

This concern was summarised in a submission from the Commercial Litigation Association to Lord Jackson’s review of costs in the UK: ‘if the situation is distilled in to the simple question “justice or costs?” costs, commercially, must prevail’.[27]

The balance between justice and costs can be seen in the broad statement of the overarching purpose of civil practice and procedure in s 37M of the Federal Court Act. The just resolution of disputes according to law must be achieved as quickly, inexpensively and efficiently as possible.

Policy tensions

Tension between the parties

In practice, however, there is an uneasy tension between the time and money that discovery can consume and the right of parties for a reasonable opportunity to present their case.

This tension divides the party requesting discovery—who seeks to ascertain facts material to the case—and the party giving discovery—who bears the burden of retrieving, reviewing and producing documents.

Tension between party and lawyer

There is also a tension between a client and their lawyer, in terms of the duties lawyers owe to clients and to the court in the context of discovery.

A lawyer must represent and protect their client’s best interests—which, in some cases, might be served by extensive inquiry and discovery of documents.

Such practice might be proficient advocacy on the lawyer’s part in some cases, but in other cases it might be defensive legal practice against the threat of liability for professional negligence.

At the same time, a lawyer is an officer of the court and must serve the interests of the administration of justice.

The cost and delay associated with some discoveries—while affordable for the client—may be contrary to the quick, inexpensive and efficient resolution of disputes.

Tension between the parties and the court

There is a further tension between the court, on the one hand, and the parties and their lawyers, on the other hand.

A number of lawyers have called for judges to be more interventionist in their management of discovery issues.

At the same time, judges have argued that parties need to provide more information about the case that would be presented at trial—for the court to manage discovery in relation to those issues.

Some judges told the ALRC that, at times, the parties and their lawyers are in the best position to manage discovery—as they are most familiar with the case and their documents.

However, the ALRC also heard many judges agree that active judicial case management is essential in relation to discovery—and even admit that some judges are more involved in case management than others.

Direction of law reform

These tensions between the parties, their lawyers and the court were considered in the Discovery Consultation Paper, which proposed a number of reforms aimed at clarifying their respective roles in relation to discovery.

The proposed reforms were focussed on the Federal Court of Australia and built upon structures already in place. 

Limiting discovery to crucial issues

For example, Federal Court Practice Note CM 5 makes it clear that the Court will look to fashion any order for discovery to suit the issues in a particular case.

Typically, this means the court will order discovery of specific categories of documents relevant to certain issues in dispute.

In the Managing Justice report, the ALRC noted that discovery by categories can work well ‘if the issues in dispute are sufficiently well defined that the documents are amenable to classification’.[28]

In the Discovery Inquiry, the ALRC proposed a number of ways to highlight the crucial issues in dispute so that discovery may focus on what matters most.[29]

This includes: preparing a list of issues in dispute, in order of importance in the proceeding; outlining the issues and facts that appear to be in dispute, at an initial directions hearing; and outlining the evidence on which the parties intend to rely at trial.

These mechanisms were identified during consultations by judges and lawyers as things they had used on occasion to effectively manage the discovery process.

However, in some cases, identifying the crucial issues early in proceedings would be difficult—when the emphasis on certain issues changes throughout the course of litigation, especially after documents are discovered.

Parties’ cooperation on discovery

During consultations, the ALRC heard that categorising discoverable documents by their relevance to issues in dispute would not—by itself—significantly reduce the burden of discovery. In some cases, large volumes of documents would still need to be reviewed in order to find the relevant ones.

A number of stakeholders argued that discovery orders also need to focus on specific locations or custodians of relevant documents.

Federal Court Practice Note CM6 suggests that parties should discuss and agree upon a practical discovery plan, including such things as strategies for conducting a reasonable search for discoverable documents.

However, the ALRC heard that, in practice, parties rarely make such formal arrangements. One stakeholder said discovery plans have no ‘status’ in the conduct of litigation.

The ALRC also heard that judges don’t often consider the practicalities of discovering documents, before making orders for discovery.

The Consultation Paper proposed the introduction of procedural requirements to formalise the use of discovery plans in Federal Court proceedings.[30]

The parties would be obliged to: meet and confer on the discovery of electronic documents; and jointly file a draft discovery plan setting out their agreement or areas of disagreement—for the court’s approval or determination.

The proposal received widespread support in submissions but there were also concerns that discovery plans would not be needed in simple or straightforward cases—where the cost of developing a plan might outweigh its benefits.

Judicial scrutiny

Judges are expected to be active participants in the parties’ endeavours to negotiate the scope and process of discovery.

Consultations revealed that some judges are known to ‘take discovery by the scruff of the neck’, as one stakeholder put it. But there are strong concerns about inconsistencies in case management across the bench.

For example, the ALRC heard that some judges do not apply the requirement in Federal Court Rules for leave of the Court to serve a notice for discovery, in a formal or consistent manner. Relevant factors as to whether leave should be granted might not be given serious consideration in some cases.

The Consultation Paper asked whether a threshold test should be introduced that parties would have to satisfy when applying for discovery orders. This would provide a basis for judges to scrutinise consistently the need for discovery in each case.

In line with this proposal, draft amendments to the Federal Court Rules provide that a party may apply for discovery orders only if it is necessary for the just determination of issues in the proceeding.

This rule would be supported by the operation of s 37M of the Federal Court Act which requires the Court to exercise its powers—such as granting leave for discovery—in the way that best promotes the overarching purpose of civil practice and procedure: namely, the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible.

Costs powers

There are a variety of mechanisms at the Court’s disposal that it may employ in giving effect to the overarching purpose, which can have specific application in the context of discovery.

The breadth of the Court’s case management powers was not an issue in the Discovery Inquiry. Rather, the concern was the manner and extent to which the Court actively exercises its powers to control discovery.

Yet there was strong resistance from judges consulted in this Inquiry against reforms that would fetter judicial discretion by imposing inflexible rules of general application.

The Consultation Paper examined a number of tools in the Court’s kit-bag, which might be addressed in reforms to encourage their use in appropriate cases at the Court’s discretion.

This includes the Court’s power to award costs, in particular, shifting the estimated costs of discovery to the requesting party in advance of documents being produced.

The ALRC heard that such orders have been made to effectively control discovery in some cases—but stakeholders also warned that in other cases, up-front payment for discovery would deny the parties justice.

Discovery masters

Another case management strategy discussed in the Consultation Paper was the use of discovery masters. This could be, for example, an industry expert who would consider technical e-discovery issues and report to the Court with recommendations for case management.

Concerns were raised in submissions about placing responsibility for case management outside of the Court, as well as the cost to the parties for this service.

On the other hand, some stakeholders saw the potential for expert attention to achieve greater efficiencies in discovery in some cases.

Judicial education

Law reform could draw attention to the judge’s tool-kit of case management powers. But encouraging judges to exercise those powers, in relation to discovery, in suitable cases, requires targeted education and training.

The need for judicial training in methods of discovering electronically-stored information was singled out in the Consultation Paper as being particularly pressing.[31]

This is due to the constant advancement of technology, and the mounting expectation of judges to be actively involved in managing electronic discovery issues.

The ALRC acknowledged that regular judicial training—properly resourced, of high quality and professionally appropriate—is an essential aspect of long-term cultural change in relation to discovery.

Document management systems

A number of submissions pointed out that the parties’ documents need to be sufficiently well organised and managed in order to facilitate a reasonable and proportionate discovery process.

The ALRC heard from a number of stakeholders that many litigants do not have effective record management systems in place.

One stakeholder proposed that the Federal Court should introduce requirements on the parties to adopt record management systems.

Such reform would have broader implications—outside of the courts system—for the day-to-day operation of business.

Conclusion

To conclude, a word of warning from the ALRC’s Managing Justice Inquiry, in a 1997 Issues Paper: ‘super-imposing increased judicial intervention and non-adversarial practices on the existing litigation system, has the potential to change it in fundamental ways and with results that are not easy to predict’.[32]

Fifteen years later, the trend towards judicial case management has given rise to a strong expectation of judges to get involved in the highly technical and practical aspects of discovering electronic documents.

However, in order to manage discovery effectively, judges require flexibility and discretion to mould court process in a way that best suits the needs of each case.

The move towards less-adversarial practice in litigation has produced an expectation of the parties to cooperate and to be transparent in relation to the scope and process of discovery.

However, in order to collaborate on discovery plans, the parties require the court to control their engagement and to resolve differences that will inevitably arise.

In the end, the scope and process of any discovery cannot promote the overarching purpose of civil practice and procedure without the court, the parties and their lawyers, taking responsibility for their respective roles.  

Law reform has the potential to clarify the parts played by everyone involved in discovery and, through greater certainty of expectation, greater consistency of outcome may be achieved.

This is the penultimate e-newsletter for the discovery inquiry—to let you know that the report has now been given to the Attorney-General, on time, on the 31 March. The final e-newsletter will be to let you know that the report has been tabled, and where you can read it or get a copy.  Until then, the final conclusions and the recommendations made are kept under wraps.
 
This e-newsletter provides a quick snapshot of  statistics about the project.
 
There were:

• 4 part-time Commissioners (all Federal Court judges)
• 12 members of the expert Advisory Committee (plus the part-time Commissioners)
• 218 subscribers to e-newsletter
• 2381 hits on the discovery blog
• 47 consultations
• 30 submissions

The consultations were held with a number of government agencies, academics, judges, members of the legal profession, litigation funders, community legal centres and public interest advocates. Submissions were received, for example, from the Family Court of Australia, Australian Government departments, professional bodies, law firms, individuals, public interest organisations, academics, community legal centres and firms specialising in document management. To get their submissions in, stakeholders in Brisbane not only had the tight timetable to contend with, but also the challenge of the floods.

The end result is:

• a report of 385 pages
• a Summary Report  of 28 pages
• 27 policy recommendations for improving the practical operation and effectiveness of discovery of documents in federal courts

Watch this space…..

In the interests of greater transparency and communication, the Australian Law Reform Commission (ALRC) has committed to publishing on its website the submissions received as part of its current Inquiry into Discovery of Documents in Federal Courts.

View submissions to the Discovery Inquiry >>

This is a new step for the ALRC as previously the ALRC has not published submissions it has received, but has only made public a list of these submissions, providing access to them on request at the completion of a particular inquiry.

ALRC President Professor Rosalind Croucher said “Publishing the submissions that we receive as part of our extensive consultation, is one way of increasing the transparency of our processes in formulating proposals for law reform. It will also generate a greater understanding of the various viewpoints on the matters under review here in the community. We believe that the community now expects this sort of access—as part of a more open and accountable government process, and I am pleased that the ALRC has been able to organise this in time for our current Discovery Inquiry.”

The ALRC will not publish submissions that are made confidentially, or where they are provided in a format that is not readily uploadable to a website.

The Discovery Consultation Paper raised a number of issues and proposals on which the ALRC sought feedback. Submissions to this inquiry have now closed.

The ALRC now has a couple of months to consider the submissions received before making its Final Report to the Attorney-General on 31 March 2011.

The ALRC is also conducting an online discussion blog around the Consultation Paper and encourages people to participate at http://talk.www.alrc.gov.au.

Issue 7 | December 2010   View original format

Following the release of the Discovery Consultation Paper, the ALRC embarked on a short and targeted round of consultations with key stakeholders—bearing in mind the timeframe for this Inquiry, and the proximity to Christmas vacation! The Discovery team travelled to Canberra for consultations with the Attorney-General’s Department and the Law Council of Australia, National Legal Profession Project section. Discussions with the Law Council in relation to the legal ethical duties of lawyers in the discovery process—in the context of proposed national legal profession reforms—were particularly informative and valuable to the Inquiry. We were also lucky to meet up with Annette Marfording from the University of New South Wales, who was visiting the University of Canberra that same day, to discuss her research on Civil Litigation in New South Wales: Empirical and Analytical Comparisons with Germany.

The Discovery Inquiry team then headed back to Sydney, for consultations with a number of law firms including Gilbert + Tobin, Allens Arthur Robinson and Freehills. We also met with a number of solicitors from the Law Council’s Federal Litigation Section. These consultations with the legal profession highlighted the practical problems and challenges faced by those on the front-line of discovery. The ALRC also consulted with a number of Federal Court Judges in the Sydney Registry, in their capacity as members of the Court’s Practice and Rules Committee and the Judicial Education Committee. Again, these were particularly helpful conversations and provided valuable insights into the position from which judges approach discovery issues.

Reflections from abroad were also added to the mix in a consultation which included Master Steven Whitaker, Senior Master of the Senior Courts of England and Wales in the Queen’s Bench Division,  a sought-after speaker at conferences and seminars on e-disclosure and the civil procedure reforms post-Woolf and Jackson.

The ALRC has a number of other consultations scheduled up to the end of the year, and looks forward to receiving submissions in January. Consultations with stakeholders are a vital part of an ALRC Inquiry, but stakeholders’submissions are integral to the development of recommendations for reform. The ALRC strongly encourages all stakeholders in the Discovery Inquiry to provide written submissions, as well as responses to our Costs Questionnaire and to add your observations to the Discovery Blog. 

Discovery Costs Questionnaire 

In addition to the questions asked in the Consultation Paper, the ALRC is seeking to gauge practitioners’ impressions—based on practical experience—of the degrees to which discovery costs weigh against the overall expenses of litigation, the complexity of the issues in dispute, the stakes in the litigation and the value of the documents sought in the context of the litigation. The ALRC encourages responses to this questionnaire to provide particular examples or illustrations of cases which demonstrate the cost and value of discovery in litigation. 

View Discovery Costs Questionnaire >>

We would greatly appreciate practitioners’ assistance in completing and returning this questionnaire by 19 January 2011, to help put into context the cost and value of discovery in litigation.

Stakeholders may provide their responses to this questionnaire via the online submission form, as it is included at the end of the form. Alternatively, responses to this questionnaire may be emailed to discovery@alrc.gov.au.

Discuss: Ethics in discovery practice  

In a recent roundtable discussion in Melbourne about lawyers’ ethical obligations in relation to discovery (see the previous post, Highlights from Roundtable and Panel discussions in Melbourne and Sydney), some panellists suggested that there were very few clear examples of lawyers deliberately abusing the discovery process. Rather, if discovery gets out of hand, then ‘excessive adversarialism’ was often at least partly to blame—that is, in the words of one panellist, ‘competitive, driven lawyers acting strongly for their clients, letting their sense of duty to their clients outweigh their duty to the court’.

Can legal ethics address excessive adversarialism? Should it be used to realign a lawyer’s sense of duty in relation to discovery? The ALRC dedicated a chapter of its recent consultation paper on discovery in federal courts to the question of ethics in discovery practice. We asked a series of questions about whether—and if so, how and to what extent—discovery was being abused in federal litigation in Australia. We also asked whether professional conduct rules should be amended to include specific legal ethical obligations concerning discovery …  Read the complete post on the Discovery blog and contribute to discussion >>

Submissions due 19 January 2011

We take this opportunity to remind stakeholders that the closing date for submissions to this Inquiry is 19 January 2011, little over a month from now!

Find out how to make a submission >>

The Australian Law Reform Commission (ALRC) today released a Consultation Paper for the Inquiry into Discovery of Documents in Federal Courts—Discovery in Federal Courts (ALRC CP 2, 2010).

The 2009 Access to Justice Taskforce report—established by the Commonwealth Attorney-General’s Department, which recommended that the ALRC conduct this Inquiry—noted that the high and disproportionate cost of discovery can impose a barrier to justice in court based dispute resolution. While the truth-seeking purposes of discovery may promote fairness in litigation, the commercial realities of contemporary discovery practice and procedure may threaten the very same fairness and justice sought to be achieved.

ALRC President Professor Rosalind Croucher said “A particular feature of contemporary litigation is the massive exponential growth and storage of documents in the electronic age. Discovery can be an important process in litigation to avoid ‘trial by ambush’, but the vast amount of electronically-stored information which litigants might be required to disclose can lead to ‘trial by avalanche’. The impact of information and communication technologies can also exacerbate the inherent tension between the party requesting discovery—seeking to ascertain facts material to the case; and the party giving discovery—bearing the burden of retrieving, reviewing and disclosing documents in response to discovery requests. The task in this Inquiry is to develop proposals and ultimately, recommendations for reform that balances these tensions fairly and practically.”

The Consultation Paper raises a number of issues and proposals on which the ALRC seeks feedback. For example, to ensure that cost and time required for discovery is proportionate to the matters in dispute, the ALRC proposes a number of reforms aimed at clarifying the core issues in dispute between the parties, and focusing the scope and conduct of discovery on those issues that really matter. Professor Croucher commented that “The role of judges as case managers is crucial in this regard, and many of the ALRC’s proposed reforms seek to remove obstacles and make changes to enable judicial control over the discovery process.”

The ALRC’s Terms of Reference extend to a broader examination of procedures alternative to traditional discovery, which may facilitate information exchange and fact-finding. In particular, this Inquiry considers the introduction of pre-action protocols and pre-trial oral examinations; to encourage disclosure of information and documents, narrowing the facts in issue and settlement of disputes.

President Croucher noted, “While these alternative procedures may offer a measure of efficiency and streamlining of the litigation process, the implications for front-loading of costs must also be taken into account. Therefore any reforms proposed in these areas of civil practice and procedure must be flexible to accommodate the size, complexity and nature of the dispute.”

The ALRC is no longer able to provide hard copies of our consultation papers due to a reduction in our funding, however the Consultation Paper is available to view or download from the ALRC’s website.

Submissions addressing the questions and proposals in the Consultation Paper can be posted, faxed or emailed to the ALRC.  Online submissions are encouraged. Information about how to make an online submission is available at https://www.alrc.gov.au/inquiries/discovery/contribute . The ALRC is also conducting an online discussion blog around the Consultation Paper and encourages people to participate at http://talk.www.alrc.gov.au.

Closing date for submissions is 19 January 2011.

The Commission will submit its Final Report to the Attorney-General on 31 March 2011.

The Discovery Blog

Thank you to Michael Legg for his blog post last month, on Discovery in the Information Age, and to everybody who has left comments so far.

We will continue to add new posts to the blog throughout the submission period, opening up for discussion particular aspects of the Consultation Paper, and we encourage you to check in regularly.

Issue 5 | November 2010   View original format

The month in summary

This month, the ALRC consulted with the Australian Taxation Office to discuss discovery issues in the context of tax litigation. We were interested to hear about the practical operation of procedures, particularly those effecting the discovery process, set down in Practice Note Tax 1 for matters in the Federal Court’s Tax List. Also this month, the ALRC met with Prof. The Hon Andrew Rogers QC and gained much from his experience as former Chief Judge of the NSW Supreme Court’s Commercial Division, and now as an international legal consultant, specialising in the area of arbitration, mediation and dispute resolution.

We are very pleased to announce the appointment of two new part-time Commissioners specifically for this Inquiry, the Honourable Justice Arthur Emmett and the Honourable Justice Bruce Lander—both for a period of six months. See the media release >>

We are also excited to announce two Panel Discussions that will take place in November – one in Sydney and one in Melbourne – and to invite stakeholders and other interested parties to attend. See below for more details.

Earlier in the month we received UNSW academic Michael Legg’s  comment on our last blog post – about pre-trial examinations. As he clearly has expertise in the area, we invited him to contribute his own post as a guest blogger (see below). We may, over the next few months, invite other people with interesting views and perspectives to bring to this Inquiry to submit guest blog posts on specific issues—to add to the debate and encourage discussion. Such posts from guest bloggers will reflect personal views of our guests and will not necessarily be those of the ALRC, but we hope they will add some insights and suggestions of interest to all our readers.

Consultation Paper released next week

We look forward to releasing the Consultation Paper, Discovery in Federal Courts,on 15 November 2010, at which point we will send another newsletter with links and details about making submissions.

The Consultation Paper will be available on the website in html, and downloadable as a PDF. The ALRC will also provide a free CD-Rom copy to stakeholders who specifically request one. To order a CD-Rom, please provide your details on the Order Webform by 12 November 2010.

Please mail me a CD-Rom copy of the Consultation Paper >>

Discuss: Discovery in the Information Age

The interaction of information technology and discovery is usually described with superlatives such as revolutionary, paradigm-shifting, game-changing.  It is all that, and probably more, as the litigation process is not immune to changes in society (except for horsehair wigs and robes) and the changes wrought by information technology are on-going.  Documents now originate…  Read the complete post on the Discovery blog and contribute to discussion >>

Panel Discussions in Sydney and Melbourne

Please join us for inquiring and invigorating roundtable discussions focusing on the conduct of lawyers and ethical obligations in discovery. We will be holding panel discussions in Sydney and Melbourne.

The Melbourne event is on Wednesday 17 November at Melbourne Law School. Panellists include: Professor Rosalind Croucher (President, ALRC), His Honour Justice Ray Finkelstein, Georgina Hayden (Chief Legal Office, ASIC), Sue Laver (General Counsel Corporate Strategy and Customer, Experience and General Counsel Dispute Resolution, Telstra), Bernard Murphy (Chair, Maurice Blackburn Pty Limited), Mr Stuart Clark (Chief Operating Officer, Clayton Utz). RSVP by 12 November 2010.

Download the Melbourne invitation for more information >>

The Sydney event is on Thursday 18 November 2010 in the Law Courts Building, Queens Square. The discussion will be moderated by ALRC President Professor Rosalind Croucher and introduced by Chief Justice Patrick Keane of the Federal Court of Australia, with panel members including The Hon Justice Peter Jacobson, Federal Court of Australia, Rebecca Gilsenan, Principal, Maurice Blackburn Lawyers and Stuart Clark, Partner, Clayton Utz.

Download the Sydney invitation for more information>>

Download invitation as a PDF >>

The Australian Law Reform Commission is currently reviewing the laws relating to discovery of documents in federal litigation and will shortly release a Consultation Paper (available from www.alrc.gov.au). Please join us for an inquiring and invigorating roundtable discussion focusing
on the conduct of lawyers and ethical obligations in discovery.

Panellists:

• Professor Rosalind Croucher (President, ALRC)
• His Honour Justice Ray Finkelstein
• Georgina Hayden (Chief Legal Office, ASIC)
• Sue Laver (General Counsel Corporate Strategy and Customer
• Experience and General Counsel Dispute Resolution, Telstra)
• Bernard Murphy (Chair, Maurice Blackburn Pty Limited)
• Mr Stuart Clark (Chief Operating Officer, Clayton Utz)

Moderators

• Professor Camille Cameron (MLS), Director, Civil Justice Research Group)
• Associate Professor Christine Parker (Melbourne Law School)

DATE: Wednesday 17 November 2010

VENUE:
Moot Court, level 5
Melbourne Law School
185 Pelham Street
Carlton VIC 3053

TIME: 5.15pm—7.00pm

RSVP: law-civiljustice@unimelb.edu.au, 03 8344 6589
By Friday 12 November 2010