Questions

Jurisdiction

1.19 To understand the costs of discovery and the role played by discovered documents in litigation, it is important to place the discovery process within the context of the jurisdiction in which the litigation is conducted. The rules for discovery of documents may vary between jurisdictions, and so too may the approach to case management employed in different jurisdictions.

1.20 During initial consultations in this Inquiry, the ALRC heard that different registries of the same court can adopt different approaches when applying the same rules for discovery of documents, and may also take different approaches to case management in general. Responses to this question might help to identify the exigencies of a particular court registry as reflected in practitioners’ experience of the discovery process.

1.21 Practitioners may have experience in conducting litigation across a number of jurisdictions, in different courts and tribunals and in different States or Territories or countries. Responses to this question might cover a number of jurisdictions. Otherwise, participants may prefer to respond based on the jurisdiction in which they are currently practicing, or the jurisdiction in which a significant amount of your experience with discovery has been gained.

1.22 As noted above, the ALRC’s Inquiry is primarily concerned with the discovery of documents in civil proceedings before a federal court: namely, the High Court, the Federal Court, the Family Court or the Federal Magistrates Court. However, cases in other jurisdictions—including State or Territory courts, Australian tribunals or foreign jurisdictions—may be used as the basis for responding to this questionnaire.

Type of proceeding

1.23 The cost and proportionality of the discovery process may be better understood in the context of the type of proceeding in which discovery is made. The nature of the proceeding may have some bearing on the range and complexity of the issues in dispute, which in turn may affect the ambit and conduct of the discovery process.

1.24 Practitioners may have experience in litigating a broad range of matters. However, participants should respond to this question based on the kinds of litigation in which a significant amount of your experience with discovery has been gained. Otherwise, participants may prefer to respond based on the types of proceeding in which they are currently acting.

1.25 During initial consultations in this Inquiry, the ALRC heard that concerns about the costs of discovery are most likely to arise in the following kinds of proceedings. Where appropriate, please describe your experience with relevant types of litigation in these terms:

•  corporations law;^[3]
• trade practice law;^[4]
• intellectual property law;^[5]
• class actions;^[6]
• engineering or construction law;
• product liability;
• insurance litigation;
• taxation law; or
• financial cases in family law matters.

Discovery costs relative to total litigation expense

1.26 The ALRC wishes to explore the cost of discovery as a portion of the total expense of litigation, and to examine concerns that discovery costs represent one of the largest components of total litigation costs.

1.27 The total litigation costs might include, for example, solicitors’ fees, barristers’ fees, court fees, litigation support service provider fees, experts’ fees, witness expenses and other costs and disbursements. Expenses incurred in appeals or in related proceedings heard separately should not be considered in responses to this question.

1.28 As discussed above, solicitors’ fees can form part of both discovery costs and the total litigation cost.

Discovery costs relative to range and complexity of issues in dispute

1.29 During initial consultations in this Inquiry, the ALRC heard that disputes involving a broad or complex range of issues—where the pleadings rely on numerous causes of action or defences, proceedings involving numerous claimants, respondents, cross-claimants and third parties, or cases based on complex factual or legal matrices—have the consequential effect of setting broad boundaries for the discovery of documents, and open up discovery to large volumes of documents. In turn, the large volume of documents discovered in such cases may have a multiplier effect on the costs of discovery.

1.30 This question examines the relationship between discovery costs and the complexity or breadth of the issues in dispute in a proceeding. This may include both issues of fact and law. Understanding the impact that the complexity and breadth of issues has on discovery costs may help to inform directions for reform of the discovery process. For example, the ALRC’s Consultation Paper, Discovery in Federal Courts, suggests that reforms to ensure clearer articulation of the critical issues in dispute may help to reduce the burden of the discovery process.^[7]

1.31 Where possible, please provide examples or illustrations of cases which demonstrate the relationship between discovery costs and the breadth or complexity of the issues in dispute. This might be, for example, cases of ‘mega-litigation’ where discovery costs were noticeably high. Other examples might include relatively straight-forward cases where the costs of discovery were greater than expected, and an explanation of the reasons for usually high discovery costs. Conversely, complex cases where discovery costs were minimised—and the strategies used to contain discovery—could usefully be described here by way of example.

1.32 The ALRC notes that the range of issues in dispute may narrow as the litigation progresses, or the focus on particular issues may concentrate over the course of proceedings. Similarly, the discovery process may itself facilitate the resolution or clarification of certain issues in dispute. However, in this question, the ALRC is interested in the range or complexity of the issues in dispute prior to or at the time of discovery, and its subsequent impact on the cost of the discovery process.

Discovery costs relative to stakes in the case

1.33 The ALRC seeks to explore commentaries which suggest that high discovery costs are more likely to occur in cases with high stakes, and to examine concerns that the costs of discovery can be disproportionate to the stakes in the litigation.

1.34 Where possible, please provide examples or illustrations of the relationship between discovery costs and the stakes of litigation. This may include examples of high value cases where the costs of discovery were also high. However, it might also include examples of small claims where the costs of discovery were disproportionately high—and an explanation of why discovery was disproportionate to the stakes in the litigation. Also of interest are examples of high stakes litigation where the costs of discovery were kept down, and the means of containing discovery costs in those cases.

1.35 The value of what is at stake for the parties might include an amount of money claimed by way of damages or the amount of damages awarded by way of judgment in a particular case, an amount paid in settlement of a dispute, or the perceived value of non-pecuniary relief such as injunctive or declaratory relief.

1.36 It might also include consequential matters at stake for the parties as a result of a finding of liability, for example, the potential for further litigation in other jurisdictions based on the precedent founded in an initial proceeding before a federal court. Other consequential matters at stake for the parties in litigation might include: damage to reputations, adverse publicity, potential loss of business or loss of livelihood and potential exposure to other penalties.

1.37 Responses to this question should not account for any amount of liability for costs, as the expense of litigation is examined in Question 1–3 above.

Use of discovered documents in defining issues in dispute

1.38 During initial consultations in this Inquiry, the ALRC heard that discovery can be a useful process in encouraging the settlement of a dispute but also, where settlement is not achieved, parties often abandon certain issues in dispute after discovery is given. For example, in tax matters, the Taxation Commissioner may be content, on the basis of discovered documents, that a particular transaction will not attract the general anti-avoidance provisions of the tax law—whereas a lack of understanding about that transaction prior to discovery may have driven disputes over the issue. In such cases, the time taken at trial to determine the dispute would be reduced, in part as a result of discovery.

1.39 The ALRC seeks to gauge practitioners’ impressions of the utility of discovered documents in narrowing the issues in dispute. This includes practitioners’ views on the typical yield of discovery—in terms of the relevant information produced—and views on the probative value of discovered documents for the purposes of encouraging admissions of facts or resolving some of the issues in dispute.

1.40 Examples provided in response to this question might describe cases where a large number of subordinate or collateral facts in issue were agreed on the basis of a large proportion of discovered documents, as well as cases where a small number of the main issues in dispute were resolved on the basis of a small proportion of discovered documents.

Use of discovered documents in settlement of disputes

1.41 As discussed below, there are concerns about the minimal use of discovered documents during the final court hearing of disputes. However, the ALRC was told during initial consultations that most cases will not proceed to trial—instead, disputes are generally settled prior to judgment, but not until after discovery.

1.42 The ALRC seeks to gauge practitioners’ impressions of the utility of discovered documents in the settlement of disputes. This includes practitioners’ views on the typical yield of discovery—in terms of the relevant information produced—and views on the probative value of discovered documents for the purposes of settlement negotiations or other alternative dispute resolution processes.

1.43 Examples provided in response to this question might include cases where a large proportion of discovered documents were relied upon to assess the quantum of damages and to negotiate a settlement amount. Other examples might highlight cases that settled on a commercial basis with little regard for discovered documents or other evidence. For example, the potential for adverse publicity for a party may be a greater influence on settlement negotiations than discovered documents, in some cases.

Use of discovered documents in judicial determination of proceedings

1.44 Some judges have expressed concerns about the minimal use of discovered documents at trial, when voluminous documents are discovered and trolley loads of documents are brought to court, but only a small number of documents are relied upon by parties during the trial and fewer still are actually relevant to the court’s determination of the dispute. For example, Justice Finkelstein has pointed out that in Seven Network Limited v News Limited^[8] only 15% of the millions of pages of documents that were searched and reviewed were put before the court and only about 15% of those documents ultimately went into evidence.^[9] In other words, the overall yield of discovery (in terms of the admitted evidence produced) was well below 5% of the documents discovered.

1.45 However, the percentage of discovered documents that are not subsequently relied upon at trial may create a misleading perception that discovery is only successful when a substantial proportion of discovered documents are tendered in evidence. In the context of certain proceedings, it is possible that a single document obtained through discovery may turn out to be crucial to the determination of the dispute.

1.46 The ALRC seeks to gauge practitioners’ impressions of the utility of discovered documents in the judicial determination of proceedings. This includes practitioners’ views on the typical yield of discovery—in terms of the admitted evidence typically produced—and views overall on the probative value of discovered documents admitted into evidence.

1.47 Examples provided in response to this question might include cases where large volumes of discovered documents were included in a tender bundle or court book, but only a few of those documents were relied upon by the parties at trial or considered by the court in its judgment of the dispute. However, such examples might also highlight cases where the court’s decision in the proceeding hinged on those few discovered documents that were admitted into evidence. Other examples might illustrate trials that carefully examined a few specific discovered documents thought to be crucial to a party’s case but were found by the court to be largely irrelevant to the real issues.

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