Presentation on theme: "Planning and Preparation for Litigation in the Large Corporate Environment Under the New Federal Rules James M. [Jim] Wright, P.E. Wright Consulting LLC."— Presentation transcript:
1 Planning and Preparation for Litigation in the Large Corporate Environment Under the New Federal RulesJames M. [Jim] Wright, P.E.Wright Consulting LLC
2 Agenda General Considerations Goals of Litigation Preparation The New FRCPE-Discovery CostsEarly Actions EssentialsResources -The E-Discovery TeamThe Discovery Process Under the New RulesActivities & DecisionsKey Client ConsiderationsRECAP-Client Best Practices
3 General Considerations The new FRCP introduce significant new risks in litigationCosts associated with processing data can exceed the merit value of the matterBest practices necessitate Client participation in E-DiscoveryGood preparation and planning are essential to manage risk and cost. This includes:ActionsPolicies, Practices, Procedures, ProtocolsDecisions - in advance of actual litigation
5 What are the New Rules? ESI formally defined in Rule 34[a] Parties must now “Meet and Confer” to discuss ED issues per Rules 16[b] and 26[f].Producing parties must now identify all possible sources of ESI, including those it does not intend to search due to excessive burden. Rule 26[b][B] establishes a procedure for dealing with such burden claims.A procedure for determining the form[s] of production is outlined in Rule 34[b].
6 New Rules [cont]Parties in receipt of inadvertently produced privileged ESI may not use it until waiver claim[s] have been resolved under Rule 26[b][B].Parties inadvertently destroying ESI by the “routine, good faith operation of their computer system[s]” [may] have some spoliation sanctions protection under the controversial new Rule 37[f] “Safe Harbor” provision.The new rules contain many ambiguities, especially in their practical application, which are somewhat clarified by the published Rules Committee Notes.
7 What does this mean re: Litigation? The cost of litigation is increasing dramatically under the new rules, with E-Discovery costs in the $$ millions becoming routine.Increased discovery costs are expected to raise the settlement value of small matters significantly.The risk of spoliation is much higher due to the volume and complexity of ESI.The legal and technical ambiguities present a variety of new risks as well.
8 E Discovery Cost Breakdown Collection %Processing [ED Vendors] 10-25%Legal Review %Production %CONCLUSION:Reduction of amount of ESI going to Legal Review is the obvious key to cost management.
9 What is the industry doing? An E-Discovery industry [>$2BB in ’07] has arisen with technology tools to facilitate filtering and legal review of ESI.Law Firms have largely not acquired the technical expertise nor adopted practices to manage cost.Most large corporate litigants are moving to take management control of ED.
10 Early Actions Timeline Under the new FRCP Meet& ConferScheduling ConferenceFilingDuty to preserve?? days21 daystimeIdentify & Collect ESIAnalyze ESI : Qty/TypeDevelop ED PlanPrep for Meet & Confer
11 Early Actions Essentials Client must take lead in early actions as Counsel comes up to speedPreservation & CollectionAnalysis of ESI CollectionPrivacy Law Issues PlanCounsel must also be able to come up to speed quickly to participate in development of Discovery PlanAt Meet & Confer, a strategically-developed Discovery Plan provides significant advantageEarly Preservation & Collection actions gain Good Faith with CourtImportant decisions/negotiations are being made while Safe Harbor is in effectClient and ED Vendors must have established relationship and work plan for early actions to be possible. Vendor[s] must have required reporting capabilities [File type, keyword]
12 The E-Discovery Team Client 2 4 Counsel 3 1 E - Discovery Vendors Owns Risk, Pays Costs, so can make risk decisions quicklyKnows ESI best, has IT resourcesAbility to move early and quicklyCounselStrategic Legal KnowledgeFamiliarity with CourtKnowledge of legal issues in E-DiscoveryE-Discovery Tech Vendor[s]Powerful technology optionsAbility to apply resources as neededExperience in processing ESIAbility to provide expert testimony to E-Discovery mattersClient24Counsel31E-DiscoveryVendorsDiscoveryManagementDiscovery ManagementDevelops & Manages Discovery PlanActivitiesResourcesScheduleIdentifies Risk & Cost IssuesCoordinates Discovery Team
13 The E-Discovery Process Overview PHASE 1COLLECTION& SCOPEPreservationCollectionAnalysisMeet&ConferRule 16SchedulingConferencePHASE 2PLANNING &NEGOTIATINGDiscoveryPlanPHASE 3EXECUTIONESIProcessingLegalReviewProduction
14 PHASE 1 Actions & Decisions PreservationCollectionAnalysisGenerate ESI Collection Inventory ReportIdentify File Types of InterestIdentify Files where Native is NecessaryIdentify non-standard File TypesNon-IndexableNon-Commercially usableInternal ProprietaryIdentify Key PlayersPublish Lit HoldInterview Key PlayersDetermine Relevant ESI Locations with Data MapIdentify Vulnerable ESIDetermine Privacy or Confidentiality IssuesDetermine Need for ForensicsNotify Opposing Counsel?CollectCoordinate with CustodiansMaintain Chain of Custody Records
15 Preservation Key Considerations Must have established process to acknowledge trigger and to identify KP’s.Consider tiered KP list with different [less rigorous] search criteria for lower tiers.PreservationIdentify Key PlayersPublish Lit HoldInterview Key PlayersDetermine Relevant ESI Locations with Data MapIdentify Vulnerable ESIDetermine Privacy or Confidentiality IssuesDetermine Need for ForensicsNotify Opposing Counsel?Must have established protocol to publish hold notice. This must address all forms of ESI.Technology tools exist to automate much of this process.Use of questionnaires in advance of personal interviews. If prepared to do this in house, time savings are notable.Develop a detailed Data Map internally which can be edited for each matterIf forensic collections are deemed appropriate, consider whether outside collectors are needed.If you intend to exclude any significant ESI from preservation, consider notifying OSC to limit later spoliation risk.
16 Collection Key Considerations Decide if making collection as a means for preservation is cost-effective.Establish protocol for collections from PC’s which is subject to interruption and can be very time-consuming. Consider whether to do this over the network or locally in user’s office[s].CollectCoordinate with CustodiansMaintain Chain of Custody RecordsConsider internal collections. Will necessitate software, hardware, and people.Perform collections internally with enterprise applications that track CoC automatically.
17 Analysis Key Considerations Confirm the availability of applications or resources that can generate these reports quickly. These can be desktop apps, or provided by ED vendors.AnalysisGenerate ESI Collection Inventory ReportIdentify File Types of InterestIdentify Files where Native is NecessaryIdentify non-standard File TypesNon-IndexableNon-Commercially usableInternal ProprietaryConsider using “inclusive” rather than “exclusive” approach. Identify hi-qty file types that can be excluded [e.g. html]Quantity of these file types can present significant cost challengesNon-indexable file types cannot be electronically searched, so special process [e.g. OCR], or costly human review is necessaryConsider the means to produce these in “reasonably usable” forms.
18 PHASE 2 Actions & Decisions Meet&ConferRule 16SchedulingConferenceDiscoveryPlanIdentify File Types & Search CriteriaDevelop Plan(s) for Non-Indexable and other File Types to be SearchedDevelop Plan for Backup and other MediaEstablish Burden Arguments for Excluded [NRA] File TypesIdentify 30[B]6 Deponent[s]Who Attends?Present Proposed Discovery PlanNegotiate Terms for Search Criteria [Keyword List Sizes, etc.]Negotiate Privilege IssuesNegotiate Form of Production & Timing [Rolling?]Negotiate Authentication IssuesWho Attends?Negotiate Differences in Discovery PlanPresent/Defend Burden Arguments for NRA ESIArgue Cost-ShiftingNegotiate Schedule
19 Discovery Planning Key Considerations It is essential that a file type listing [both number and size of each file type] is available to do this. Not all ED vendors can generate this information easily.DiscoveryPlanParties will usually accept a date range filter [i.e. file creation date]. The range must be negotiatedIdentify File Types & Search CriteriaDevelop Plan(s) for Non-Index-able and other File Types to be SearchedDevelop Plan for Backup and other MediaEstablish Burden Arguments for Excluded [NRA] File TypesIdentify 30[B]6 Deponent[s]Decide privilege issuesThis can be complex, but is extremely important, as non-indexable files [e.g images] cannot be electronically searched, so expensive human review is needed. Quantify these file types and if a significant number exist, either argue to eliminate them from further review if possible or propose an alternate, limited, processing scheme [e.g. sampling, OCR & E-search, narrow date range, etc.].Also address files that should be produced native. & discuss authentication thereof.After identifying whatever backup media exists that might contain discoverable ESI, determine if it [largely] exists elsewhere and decide whether it can be argued that it is NRA [Not Reasonably Accessible]. Develop argument to include Undue Cost, Business Disruption, and Disproportionality. Be prepared to defend the numbers at the Rule 16 hearing, or arrange for ED vendors to do so.Decide who will be the 30[b]6 wtiness[es] to testify to collection methods and actions, and to defend burden arguments.Does a Clawback Agreement make sense ?
20 Meet & Confer Key Considerations In addition to outside counsel, consider having the E-Discovery coordinator[s] present, to consult with counsel on ED issues, and to discuss with opposing party, if so directed.Present a detailed, proposed E-Discovery Plan, as developed in the previous steps. Leave room for negotiation.Who Attends?Present Proposed Discovery PlanNegotiate Terms for Search Criteria [Keyword List Sizes, etc.]Negotiate Privilege IssuesNegotiate Form of Production & Timing [Rolling?]Negotiate Authentication IssuesDiscuss date ranges and file types first, as these are not normally rigorously contested.For Keywords, agree to a procedure, but not specific keywords at this time.Negotiate a “Clawback” if deemed appropriate.Subject to the court’s likely interest in expediency, negotiate enough time to deal with the keyword process, and subsequent review. Try to agree on a rolling production.Negotiate Authentication methodology for any files to be produced in native format.
21 Rule 16 Conference Key Considerations SchedulingConferenceConsider having E-D specialist[s] attend, or at least be available outside the meeting for consultation or testimony, or at a minimum. by phone.Be prepared to present the arguments for areas where agreement could not be reached in the Meet and Confer.Who Attends?Negotiate Differences in Discovery PlanPresent/Defend Burden Arguments for NRA ESIArgue Cost-ShiftingNegotiate ScheduleBe prepared to defend any burden arguments for the exclusion of ESI, even if agreed to by opposing counsel in the meet and confer. Consider having ED vendors present or on call if deemed appropriate.If arguments to exclude NRA ESI are unsuccessful, be prepared to argue for cost-shifting.Endeavor to get enough time to execute the Discovery Plan, and be mindful of the keyword process and review time. Try to agree on a rolling production.
22 PHASE 3 Actions & Decisions ESIProcessingLegalReviewProductionSelection of E-Discovery Vendor(s)Management of Vendor(s)Analysis of Vendor Reports during ProcessingDecisions on Filtering CriteriaNegotiate Keyword List & ProcessingCoordination of any Vendor TestimonyDevelop Review PlanSingle or Multi-Phase?Contract ATTYS?Review Platform[s]Limited Review due to Clawback?Prioritize Review per Rolling Production AgreementDevelop Privilege Log[s]Coordinate Productions per “Rolling” AgreementConfirm AuthenticationOversee and Log ProductionsAudit E-Discovery Vendor QA/QC Processes
23 ESI Processing Key Considerations Based on the Discovery Plan, vendor selection should consider amount and type[s] of ESI, the type[s] of processing planned, the time allowed to process it, and the amount of it that is expected to pass the filters to legal review. To facilitate the process, it is best to have standing Master Agreements with the vendor[s] of choice.ESIProcessingSelection of E-Discovery Vendor(s)Management of Vendor(s)Analysis of Vendor Reports during ProcessingDecisions on Filtering CriteriaNegotiate Keyword List & ProcessingCoordination of any Vendor TestimonyThe decision of who will manage the ED process is essentially important. Client-management is always best from a cost management perspective.The ability of the vendor to generate reports on the ESI as it is processed [the earlier the better], is essential. Always select vendors who can meet your needs in this regard. Of special importance is keyword “hit reports” that quantify the number and total volume of “hits” for each keyword.Once quantitative reports are generated by the EDVendor, decisions on filtering criteria can be made. Start with highly selective criteria and expand as needed, to assure hi responsive rates early to allow production to begin. This is especially important with keywords, which is why this was negotiated earlier in Phase 2.To the extent that burden or other arguments to limit processing of ESI are relevant, identify the responsible party early so preparation can begin.
24 Legal Review Key Considerations As soon as it becomes apparent what kind of volume of data will make it to legal review, decide how to proceed: Single review with Trial Counsel, or multi- review with initial review performed by lower cost alternatives.If contract attys are selected, several options exist:1] Self-contracted, hourly2] Specialty firm, hourly or unit rate3] All-inclusive fixed priceLegalReviewDevelop Review PlanSingle or Multi-Phase?Contract Attys?Review Platform[s]Limited Review due to Clawback?Prioritize Review per Rolling Production AgreementDevelop Privilege Log[s]Selection of review platform is critical. If the file count is high [tens of thousands], conceptual-grouping platforms are proven to reduce cost significantly.Based on the perceived sensitivity of the document collection, consider producing without legal review, subject to a privilege claw-back agreement.Focus initial review on the “low-hanging fruit” so production can begin early, minimizing complaint from the requesting party. This gives more time to cull subsequent productions.Many EDV hosting platforms can auto-produce privilege logs for files so-coded during review.
25 Production Key Considerations Having negotiated the form of production in the Meet and Confer, the ED vendor can generate the production[s] during normal hours, and not the usual weekend 24/7 panic blitzkrieg, for which premiun charges apply. This also allows time for proper QA to confirm redactions, privileges, etc.ProductionCoordinate Productions per “Rolling” AgreementConfirm AuthenticationOversee and Log ProductionsAudit E-Discovery Vendor QA/QC ProcessesHaving negotiated a protocol for production of native files, the EDV can generate the production accordingly, along with the cross-reference file with the authentication code [e.g hash values].Depending on the size and schedule of the productions, stay vigilant as to the schedule to avoid last-minute surcharges.Be sure your EDV is maintaining timely QA on the process. This tends to get behind and can create delays and last-minute problems.
26 RECAP - Client Best Practices Essential In-House Requirements Enterprise Records PolicyWhat ESI must be retained & why, for how long?IT Resources InformationDetailed description of IT resources, both hardware and software [Data Map]Where within the Enterprise the Records are maintainedWhat are operational policies and backup protocols? Note special systems [IM, TM, VM, VOIP, etc]What are vulnerabilities of systems to loss of ESI?Assets tracking capability, esp. for departing employeesPreservation CapabilitiesIdentification of Key PlayersPublication of Preservation NoticesSuspension of selective data destruction activitiesUnderstanding of privacy laws for foreign ESI
27 RECAP - Client Best Practices Important Decisions and Considerations Which activities will be performed in-house?Resources to perform them?Who will publish Litigation Holds?Who will perform management oversight of E-Discovery?Who will develop 26[b][b] arguments ?Who will engage E-Discovery vendors?Who will perform first level Legal reviews?Would a Discovery Counsel make sense?Who will provide 30[b]6 testimony?Who attends Meet & Confers?Who will attend Rule 16 Conferences?
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