Promoting the new discovery rules

Just how important it will be for practitioners to follow the new discovery rules was highlighted at a series of NZLS CLE Ltd seminars held throughout the country in late October 2011.

We were fortunate to have two High Court judges with us in Justice Asher and Justice Fogarty. The judges reinforced the point that the courts are going to take a “dim” view of any party that doesn’t make efforts to comply with the cooperation and proportionality principles of the new rules.

The seminars explained the details of the new discovery rules, which commence on 1 February 2012 and which will present substantial changes for many. The sessions were conducted in all of the main centres, with seven smaller centres attending a designated video-conference session.

The seminars outlined what the new rules will mean and also identified methods to assist the legal profession to comply both proportionately and cost effectively. Laura O’Gorman of Buddle Findlay and David Friar of Bell Gully joined me in presenting these sessions, adding their valuable legal insight to the new reforms.

The new rules are designed to try to reduce the disproportionate costs of discovery. These costs continue to escalate, largely due to the changing discovery landscape as there are now increasing sources and volumes of electronic information. The key changes of the new discovery rules include:

Cooperation and proportionality – Parties must cooperate on all matters to ensure that discovery is proportionate and facilitated by agreement on the practical arrangements.

Preservation – As soon as litigation is contemplated, prospective parties must take all reasonable steps to preserve documents that are reasonably likely to be discoverable.

Initial disclosure – Parties must make an initial disclosure of all documents referred to in a pleading or used when preparing the pleading. The documents will be provided when the pleading is served.

Standard or tailored discovery orders – Standard discovery will involve a narrower directly relevant test rather than the current broad “train of inquiry” approach. Standard discovery will involve all documents on which a party relies, or which adversely affect that party's own case or another party's case, or support another party's case. Tailored discovery requires discovery orders tailored to the requirements of the case.

Discovery checklist – Parties must address and then discuss with each other the items in a discovery checklist on all matters. The checklist will establish a framework to assess a proportionate and reasonable search for documents.

Listing and exchange protocol – The listing and exchange of all documents will be conducted electronically. Parties are encouraged to modify the default listing and exchange protocol if it is proportionate to do so.

In addition to detailing the new discovery rules, the seminars provided valuable insight into how discovery exercises can be approached more cost effectively and proportionately. The seminars identified how it is often the out-dated practices of law firms that are largely contributing to the increased costs and frustrations with discovery. These issues are largely down to paper-based methods being used to deal with new issues caused by the growth of electronic information. It is no longer possible for lawyers to “eye-ball” every single document. The costs of the discovery process have often been accepted by all involved, without realising that there are new methods that can significantly reduce these costs. The potential cost savings for firms has created considerable interest from corporate in-house counsel as they seek new methods for their law firms to reign in their discovery costs.

The new rules may facilitate a shift in the role of the lawyer in the discovery process. It is no longer cost-effective for lawyers to carry out the entire discovery process. Managing documents is not the best use of a lawyer’s legal expertise, and the practical logistics can be done more accurately and cheaper elsewhere. Lawyers should be able to come in at the document review stage, after the combination of specialist expertise and sophisticated technology has reduced the volumes for lawyers to review.

To respond to the requirements of the discovery checklist and to assess proportionality, parties will need to be more informed at an earlier stage about what documents their client has. This may mean more communication with clients to understand all the issues associated with the volumes and locations of their documentation. The increasing volumes and sources of electronic information can make this exercise more complex than in a paper-based context, especially when accurately assessing the likely costs involved.

During the sessions, many believed that tailored discovery would be the best solution on most matters, even the smaller matters. Tailored discovery should assist parties conduct discovery more cost effectively and proportionately than standard discovery.

One of the main questions that surfaced during the sessions was “what technology do I need to comply?” There is no right answer to this question. Every solution is different, as they all have different strengths and weaknesses. Some firms may have specialised requirements and with that each individual matter may also be different. It is important to get independent advice on what technology solutions are right for you. Seek the advice before purchasing a solution.

This article was published in LawTalk 785, 18 November 2011