eDiscovery & Disclosure 2019

Last Updated January 31, 2019

Australia

Law and Practice

Authors



Corrs Chambers Westgarth (Melbourne - HQ) has a market-leading Legal Technology Solutions group providing e-Discovery support to clients. It comprises over 20 e-Discovery professionals, including a significant forensic technology and analytics group that provides clients with end-to-end management of their evidence in litigation, ADR, investigations and inquiries. Corrs Chambers Westgarth has established itself as firm of choice for bet-the-company litigation throughout the country, being appointed to the most complex disputes in the country, acting for major multi-nationals and leading Australian corporates. Additionally, the firm has one of the leading class action practices in Australia – and the country has among the highest levels of class action activity in the world. Over the past 12 months, the team has been active on numerous mandates in this field, including some of the most of the prominent class actions to reach the Australian courts. The firm also play a prominent role for the Australian Government, acting in some of the highest-profile cases to reach the courts.

Australia’s courts have been shaped by common law principles integrated by the federated judicial system. The highest Australian court is the High Court of Australia, which has original jurisdiction in relation to the Australian Constitution and may hear appeals from the appellate courts of the federal, state or territory jurisdictions.

Federal Courts

The Federal Court of Australia is a superior court of record that has jurisdiction to hear both civil and criminal matters relating to Commonwealth law. Its jurisdiction extends to legislative and common law matters that arise under federal law. The federal court system is currently undergoing structural reform. From 1 January 2019 the newly named Federal Circuit and Family Court of Australia (FCFC) will be formed as one court with two divisions. FCFC Division 1 will continue the role of what was previously called the Family Court of Australia and FCFC Division 2 will take the place of the Federal Circuit Court of Australia. The Federal Court has an appellate division known as the Full Court of the Federal Court of Australia, which hears appeals from the Federal Circuit Court of Australia on all civil and criminal matters, as well as appeals from the Supreme Court of Norfolk Island, and certain Commonwealth tribunals, such as the Australian Human Rights and Equal Opportunities Commission. The Full Court of the Family Court of Australia hears all family law appeals.

The Federal Court of Australia has also recently adopted a National Court Framework (NCF) designed to streamline and modernise the Court’s practices. There has also been a reorganisation of the Court’s workload into nine National Practice Areas, encouraging consistency of practice and better utilisation of specialist knowledge and skills of the Court. Each of the Court’s nine National Practice Areas has a separate practice note providing dedicated case management principles that should be consulted when filing a matter in that area. Other practice notes address specific practices and applications such as the Appeals Practice Note or the Technology and the Court Practice Note.

State and Territory Courts

The majority of cases in Australia are handled by the state and territory courts, with the Supreme Court of each state and territory constituting a superior court of record with original jurisdiction in that state or territory. The court structure differs between the states and territories of Australia. Every state and territory has a magistrates or local court and a Supreme Court, which constitutes a trial division (referred to as the Supreme Court) and an appeal division (referred to as the Court of Appeal). The Court of Appeal hears appeals from the trial division of the Supreme Court and from the lower or intermediate state or territory courts. New South Wales (NSW), Victoria, Queensland, South Australia and Western Australia also have an intermediate court known as the District or County Court that exercises general civil and criminal jurisdiction within those states within certain limits. Typically the intermediate courts handle the bulk of the criminal and civil trials in those jurisdictions. The requirements and practices of civil litigation and discovery within each state differ; however, the general principles in relation to civil litigation and discovery are the same. This chapter will focus on eDiscovery in the Supreme Courts of the major states and does not address all state and territory differences, and it is important to be fully familiarised with the rules or guidance within the relevant jurisdiction when filing a matter.

Electronically stored information (ESI) is largely treated the same as other forms of information in the context of Australian civil procedure.

The meaning of ‘document’ is broadly defined within statute and case law. Australia has a uniform evidence law that operates in the federal jurisdiction and the states of NSW, Victoria, Tasmania, the Northern Territory and the Australian Capital Territory (the 'common law' states of Queensland, South Australia and Western Australia each have different definitions of documents, but all of them capture ESI), in which document is defined to mean "any record of information" and includes:

  • anything on which there is writing;
  • anything on which there are marks, figures, symbols or perforations having a meaning for persons qualified to interpret them;
  • anything from which sounds, images or writings can be reproduced with or without the aid of anything else; or
  • a map, plan, drawing or photograph.

In Jarra Creek Central Packing Shed Pty Ltd v Amcor Limited [2011] FCA 671 at [16], Tamberlin J advanced this definition to include any material data stored or recorded by mechanical or electronic means to be considered as ‘documents’, including data stored on disks. The definition of a document in the Evidence Act does not distinguish between hard copy and electronically stored information. Further, it is clear that embedded electronic information in relation to relevant documents, including the information embodied in electronic metadata, is part of the document and may be discoverable.

There is a significant body of case law relating to discovery; however, discovery practice has increasingly been codified in legislation and rules. In Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, the High Court of Australia recognised that the principles of co-operation, proportionality and efficiency are an essential part of discovery practices and that the judiciary has a key role to play in actively managing discovery processes.

Discovery practice is largely set out in a substantial body of practice notes in which the federal and state courts provide guidance on court procedures and rules relating to discovery. The states of New South Wales and Victoria were the first to prepare ESI-specific eDiscovery practice notes in 1996 and 1997, followed by the first federal practice note in 1999. Many of the key elements of these practice notes ‒ including data exchange tables, data fields and numbering systems ‒ have largely remained consistent, despite regular updates and revisions. Furthermore, the Federal Court and most states and territories have developed document exchange protocol guidelines. These protocols guide the identification, collection, processing, analysis, review and production stages of the discovery.

Courts have inherent jurisdiction to regulate their own procedure with practice notes regularly updated to adapt to advancements in practice and technology. Courts also have considerable scope and discretion in making orders relating to discovery. Civil procedure rules sometimes differ between federal and state or territory jurisdiction and the relevant guidance should be sought in each matter. In civil disputes, the Federal Court’s protocols are typically accepted as the default commercial standard. Where it is expected that there will be a large number of discoverable documents, the protocols may be tailored to reflect the specific requirements of the matter, either by agreement between the parties, or by an order of the Court.

Rule 20.14 of the Federal Court Rules 2011 (Cth) (Federal Court Rules) outlines that documents required to be discovered are either those on which a party relies, those that adversely affect the party’s own case, those that adversely affect another party’s case or those that support another party’s case. Electronically stored information is largely treated the same as other documents under Australian civil procedure. Modern litigation typically deals almost entirely with ESI.

The meaning of ‘document’ is broadly defined within statute and case law. In the Evidence Act 1995 (Cth) and the Federal Court Rules, document means "any record of information." Based on statute and case law, it is clear that embedded electronic information in relation to relevant documents, including the information embodied in electronic metadata, is discoverable. Tamberlin J advanced this definition to include any material data stored or recorded by mechanical or electronic means to be considered as ‘documents’ (Jarra Creek Central Packing Shed Pty Ltd v Amcor Limited [2011] FCA 671; Sony Music Entertainment (Australia) Ltd v University of Tasmania [2003] FCA 532).

In Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, the High Court of Australia recognised that the principles of co-operation, proportionality and efficiency are an essential part of discovery practices and that the judiciary has a key role to play in actively managing discovery processes. Whilst there is a history of case law relating to discovery, this has increasingly been codified in legislation and rules. Australia is unique in that it has a substantial body of practice notes in which the federal and state courts provide guidance on court procedures and rules relating to discovery.

The most recent Federal Court Practice Note, GPN-Tech – Technology and the Court, demonstrates the Court’s willingness to utilise technology in the litigation process. GPN-Tech – Technology and the Court outlines the protocols that parties should adhere to throughout the litigation, but should be read alongside Part 10 of the Federal Court Practice Note CPN-1 – Central Practice Note.

In New South Wales, Practice Note SC Gen 5 sets out the Court’s expectations for Supreme Court litigation. The stated purpose is to encourage the use of IT as a means to improve efficiency and emphasise the Court’s powers to require the use of technology in order to improve efficiency.

In Victoria the Supreme Court’s Practice NoteTechnology in Civil Litigation is also stated to encourage the use of technology in civil litigation and reduce undue delay and costs associated with the process, and to express its expectation for parties to co-operate in using technology.

A significant recent case about eDiscovery is McConnell Dowell Constructors (Aust) Pty Ltd v Santam Ltd (No 1) [2016] VSC 734 (McConnell Dowell), which was the first time an Australian court issued a written opinion approving the use of technologically assisted review (TAR). In the McConnell Dowell case, the Supreme Court of Victoria held that the prospect of McConnell Dowell handling a manual review of four million documents in a cost-effective manner was unrealistic and ordered the appointment of a special referee to determine the appropriate actions to take in managing a case with a large number of documents. The court required the parties to further the overarching purpose of the Civil Procedure Act 2010 (Vic) by co-operating and employing technological methods to assist in litigation. The parties agreed to the use of predictive coding (TAR) and established a protocol for doing so, in turn this approach was recommended by the special referee and adopted by the judge. The decision in McConnell Dowell held that orders for TAR fell within the Civil Procedure Act 2010 (Vic). Vickery J in this case referred to the United Kingdom High Court case Pyrrho Investments Ltd v MWB Property Ltd, where Master Matthews stated that predictive coding is as accurate, if not more so, than manual review utilising keyword searches.

In July 2018, the Supreme Court of Victoria issued Practice Note SC Gen 5, Technology in Civil Litigation, to reflect the decision in McConnell Dowell. At clause 8.7, the practice note states that the Court can order discovery by TAR whether or not it is consented to by the parties.

Generally, discovery is ordered after the close of pleadings once the issues of the case have been identified, but prior to the parties exchanging evidence.

Increasingly courts are looking for ways to minimise the need for discovery, including by requiring a party to establish that discovery is required in the case and requiring parties to serve their evidence before making an application for discovery (see, for example, Supreme Court of NSW Practice Note SC EQ 11). Similarly, Rule 20.12 of the Federal Court Rules 2011 (Cth) (Federal Court Rules) requires that parties apply to the Court and establish that discovery is necessary to the conduct of the case.

All Australian courts require or encourage the parties to meet and confer to agree upon a discovery plan and document management protocol, where discovery is anticipated to be a significant undertaking for one or more of the parties. This is to ensure that the case is managed efficiently by narrowing the proceedings issues, ensuring the trial only focuses on the most salient points and discusses other ways to maximise productivity.

In particular, in Adelaide Brighton Cement Limited, in the matter of Concrete Supply Pty Ltd v Concrete Supply Pty Ltd (Subject to Deed of Company Arrangement) (No 3) [2018] FCA 1058, the court ordered that the documents disclosed needed to be directly related to an issue to the extent that the document tended to prove or disprove an issue. This is similarly required by Rule 20.14 of the Federal Court Rules where parties are required to disclose documents that are directly relevant to an issue raised by the pleadings or in the affidavits. This represents a shift from the notion of including any document relevant to any matter in question, stemming from the rule in Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (1882) 11 QBD 55, which has since been criticised for not being practical in the current technological landscape.

Discovery prior to the commencement of a proceeding is possible in Australia and is generally reserved for circumstances where there is difficulty in ascertaining a potential defendant to a proceeding. Each jurisdiction has rules that provide for preliminary discovery to identify a potential defendant, or to determine whether an applicant has a possible cause of action against that potential defendant.

In general terms, a party or potential party has an obligation to retain documents that are relevant to a matter in dispute and in which litigation is a reasonable possibility, until the dispute is resolved or the limitation period for the dispute lapses such that the claim could no longer be brought. The obligation commences when it is apparent that a dispute may arise and litigation is reasonably anticipated. The question of when a potential litigant is 'on notice' that litigation is reasonably anticipated is a question of fact in the particular case.

Australian law does not generally distinguish between ESI and physical documents in terms of document retention requirements. The scope of the obligation to retain documents extends to any document in any format that is potentially relevant to a fact or issue in the dispute, such that it may be discoverable in the proceeding.

A party or potential party has an obligation to retain documents and preserve ESI that arises when a dispute exists and it is anticipated that litigation will occur. Failure to retain documents and preserve ESI that is relevant to an existing or potential dispute may constitute a contempt of court and draw sanctions ranging from adverse inferences being made in the contest of facts between the parties to fines and imprisonment for serious and deliberate destruction of documents or ESI.

Substantially Australian courts address the issue of destruction or failure to retain documents and ESI as a contempt of court to be dealt with under the courts’ inherent jurisdiction; however, offences may also be considered under the criminal prohibitions in each jurisdiction relating to destroying evidence or perverting the course of justice; for example, Sections 39 and 43 of the Crimes Act 1914 (Cth).

In 2006, the State of Victoria introduced specific document destruction provisions into the Crimes Act 1958 (Vic)(Victorian Crimes Act) to make the destruction of potentially relevant documents (including ESI) an indictable offence for companies and individuals. Victoria also introduced provisions into the Evidence (Miscellaneous Provisions) Act 1958 (Victorian EMP Act) to give courts a broad discretion to punish litigants for losing or destroying relevant ESI evidence, in the form of orders adverse to litigants’ cases.

Section 254 of the Victorian Crimes Act makes it illegal for persons to destroy or irreparably tamper with ESI once they are aware it is reasonably likely to be required as evidence in court proceedings. Both current and potential civil proceedings are contemplated by the Act. Crucially, parties must also intend to prevent the use of ESI as evidence for the crime to be made out. Corporations may also be held criminally liable for any breaches of Section 254 of the Victorian Crimes Act by their ‘associates’ – that is, employees or agents. Corporate liability is established by Section 255, which provides the key elements of Section 254 – destruction, knowledge and intention – must be established on the part of associates and then attributed to the corporation. In the absence of express authorisation by a company’s board of directors or officers, corporate intention to breach Section 254 is very difficult to prove. This is due to the intentions of associates only being attributable to corporations where there is a corporate culture that directed, encouraged, tolerated or led to a reasonable expectation that a breach of Section 254 would be authorised by the company’s board or officers.

If ESI that is or was in the possession of a party to a civil proceeding is destroyed, concealed or lost, it will be treated as being ‘unavailable’ under Section 89A of the Victorian EMP Act. Such a finding exposes the former holder of ESI to a wide range of judicial orders under Section 89B(1) of the EMP Act, some of which may adversely affect their prospects of success in the dispute. Courts have a very broad discretion to make rulings under Section 89C to ensure both parties are treated fairly, which even extends to striking out a defence or statement of claim in its entirety.

Australian courts have wide powers to sanction delinquent parties for the destruction or failure to retain relevant documents and ESI. Courts have an inherent power to make such orders as are necessary to do justice in the matter. It is open to the court to sanction delinquent parties by ordering:

  • that an adverse inference be drawn from the fact of the destruction or failure to retain a document;
  • that a fact in issue be determined contrary to the delinquent party;
  • that certain evidence not be allowed to be adduced;
  • that the burden of proof be reversed; or
  • that all or part of a pleading be struck out (which may have the consequence of judgment in the matter against the delinquent party).

In Victoria, these sanctions are also legislated in Section 89B of the Victorian EMP Act.

The application of these sanctions is focused on what is necessary to do justice in the particular case. For example, in Alder v Khoo [2010] QCA 360, the Queensland Court of Appeal found that the destruction of discoverable documents did not warrant that the defendant’s defence be struck out, as there was a "multitude of other documents" that had a bearing on the matters to which the destroyed documents related. In Kingisland Meatworks and Cellars Pty Ltd v Piero Mastromanno and Bonjust Pty Ltd [2012] VCC 25, the Victorian County Court considered that destroying or losing evidence, which completely prevented the defendant from precisely quantifying a claimed loss of profit or revenue, justified exclusion of the plaintiff’s claim for loss of profit set out in their statement of claim.

Parties may also be punished for contempt of court, or crimes associated with the destruction of documents and interference with the course of justice, in accordance with the criminal laws of the relevant jurisdiction. For example, breaches of Sections 39 and 43 of the Crimes Act 1914 (Cth) are punishable by up to five years' imprisonment.

Breaches of the specific document destruction crimes in Sections 254 and 255 of the Victorian Crimes Act carry up to five years’ imprisonment, or up to AUD96,714 in fines for individuals and a maximum fine that may be imposed is AUD483,570 for corporations.

In most litigation, each party is expected to pay for the upfront costs of complying with the party’s own discovery obligations. The general rule in Australian litigation is that ‘costs follow the event’, meaning that, in the absence of a good reason for a contrary order, the successful party will usually be awarded their costs of the litigation. The cost of discovery/disclosure, including eDiscovery, is recoverable as part of an award of costs. Courts and costs assessors are generally comfortable with awarding the costs associated with ESI, including the use of analytics and TAR to reduce the need for a more costly linear review, as part of the costs of the matter.

The court has an inherent power to make different costs orders to the usual order.

Under Section 43 of the Federal Court Act 1976 (Cth), the Federal Court may order the party requesting discovery to pay in advance some or all of the estimated costs of discovery, may order the requesting party to give security for the payment of the cost of discovery, or make an order specifying the maximum cost that may be recovered for giving discovery or taking inspection. Further, under the Federal Court Rules 2011 (Cth), Rule 20.13 provides that if a party wants an order under the above provision then the party must file an affidavit stating the orders sought, the calculation of the costs involved and an explanation as to why the order should be made.

State Supreme Courts in Australia do not have explicit cost-shifting provisions, but consider the issues of cost-shifting and cost-sharing as part of the Court’s discretionary power to determine costs.

Some examples of courts considering cost-shifting are listed below.

InMineral Crushing Services (WA) Pty Ltd v Edna May Operations Pty Ltd (No 2) [2016] WASC 181, the Supreme Court of Western Australia declined to order the shifting of discovery-related costs where the inflated costs incurred by the applicant party are a result of their own ‘fragmented’ discovery methods.

The Victorian Supreme Court has recently stated that, despite the Court’s discretion, the preferred method for pre-trial discovery is for the applicant to bear the respondent’s costs (Pandolfo v Finadri & Ors (Costs) [2018] VSC 655).

In Wellington Capital Ltd v Waters (No 1) [2014] FCA 329, parties sought non-standard discovery from Wellington Capital in relation to all minutes, papers, recordings and resolutions from board meetings since 2008. These were sought on the basis that they would be relevant to damages and causation. Wellington Capital alternatively argued that the request was inappropriate based on KPMG’s intention to rely on expert evidence. In considering whether to exercise its power under Section 43, the court noted that the provision was not "a power to be exercised upon a premonition emerging that the discovery sought is somehow inappropriate or improper" (Wellington Capital Ltd v Waters (No 1) [2014] FCA 329, [10]-[11]). The court went on to state that the Section’s purpose is to "equip the court with an ability to align the economic interests of those who must provide discovery with those who are seeking it."

Most major jurisdictions require parties in large litigation to consider whether it is necessary to ‘meet and confer’ in relation to discovery.

The provisions of the Federal Court’s Practice NoteGPN-Tech – Technology and the Court provide that the Court ‘expects’ parties to have agreed upon a discovery plan and document management protocol. A discovery plan should include any consideration by the parties of the nature, size and complexity of the document exchange, balanced against the probative value of the potential evidence to be gained from the disclosure and any unreasonable financial or administrative burden on the parties or the Court. Document management protocols outline the means and format in which documents are to be produced, potentially including agreement on document metadata and de-duplication, and the processes for redacting documents for legal professional privilege. Furthermore, the Federal Court Practice Note CPN-1 (Central Practice Note: National Court Framework and Case Management) encourages parties to meet and confer, and discuss the use of technology in the upcoming proceeding, including e-lodgment of documents, e-trials, e-courtroom and video or audio link hearings.

The states and territories have similar requirements for parties to meet and confer, to discuss the identification and narrowing of dispute issues and agree to steps for resolving at minimum expense. They require the parties to confer and agree a basic plan for the management of documents that deals with at least a document management protocol, including the agreed format for documents, and the provision of documents related to the proceedings.

The approach of Australian courts to the scope of discovery differs significantly between jurisdictions.

Federal cases are covered by the Federal Court Rules 2011 (Cth). Order 20.11 of the Federal Court Rules 2011 provides that parties have a duty to facilitate the "just resolution of the proceeding as quickly, inexpensively and efficiently as possible" in the discovery process. This is reinforced in the Federal Court’s Central Practice Note: National Court Framework and Case Management (CPN-1), which provides that a "discovery applicant should not make a [discovery] request unless it will facilitate the just resolution of the proceeding as quickly, inexpensively and efficiently as possible." Standard discovery is defined in Rule 20.14 and requires parties to disclose documents that are "directly relevant to the issues raised by the pleadings or in the affidavits." To establish this, documents must meet the criteria enumerated in Rule 20.14(2): that the documents are those on which a party intends to rely, documents that adversely affect the party’s, or another party’s, case or support another party’s case.

In Redline Contracting Pty Ltd v MCC Mining (Western Australia) Pty Ltd [2012] FCA 1157, Siopsis J held that the scope of discovery is dependent on the issues and what is pleaded in each case. The scope of discovery is also subject to the overarching purpose and objectives under Section 37M. Under Rule 20.15, if a party is seeking a more extensive discovery than standard then the party must file an affidavit stating why the order should be made. Furthermore, they must identify the criteria that applies in Rule 20.14(1) and (2) that should not apply on the application before the court. An order for particular discovery may also be made by the court under Rule 20.21(1) where a party claims that a document or category of documents may be or may have been in another party’s control.

At the state and territory level in Australia, the civil procedure rules relating to the disclosure of documents are generally similar to the overarching purpose of the Federal Rules, focusing on the efficient just resolution of cases. Most have Technology and the Court Practice Notes that outline the protocols that parties should adhere to throughout the litigation.

In NSW, if the court orders discovery occur, discovery orders can be made with a large degree of flexibility having regard to what is needed in the case, but are usually made with reference to categories (Uniform Civil Procedure Rule 21.2). The Supreme Court of New South Wales Practice Note SC Gen 7 outlines the guidelines the court expects to be followed by the parties in managing and preparing their discovery productions.

In Victoria, there are the Victorian Supreme Court (General Civil Procedure) Rules 2015. The Supreme Court of Victoria in Matthews v SPI Electricity Pty Ltd & Ors [2011] VSC 401 at [25] held that consideration ought to be given to proportionality when an order for discovery is obtained. Therefore, it is expected that lawyers and parties minimise any unnecessary process-driven costs or delays by utilising appropriate technology to facilitate the discovery of documents. The Supreme Court also released SC GEN 5 Technology in Civil Litigation to encourage the use of technology in civil litigation and reduce undue delay and costs associated with the process.

The discovery rules in Queensland apply the test of ‘direct relevance’. Under Rule 211(1)(b) of the Uniform Civil Procedure Rules 1999 (Qld), parties are required to disclose documents that are "directly relevant to an allegation in issue in the pleadings." Under Rule 211(1)(c), if there are no pleadings, a party is required to disclose documents "directly relevant to a matter in issue in the proceeding."

Western Australia has retained the 'Peruvian Guano' approach. Australia historically adopted the judgment of Brett L J in Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (Peruvian Guano) and the principle that a party should disclose any document that "relates to any matter in question in the action." The Peruvian Guano approach provided a very wide scope of discovery, requiring parties to discover any documents that may lead to a "train of inquiry" that could advance their case or damage their adversary’s case. The test was gradually narrowed in the Federal Court and most states to reduce substantially the exorbitant costs, time and abuse of the process of discovery by well-resourced individuals. The focus now turns to the principle of proportionality.

The Peruvian Guano approach is evident in the expression used in Order 26 Rule 1 of the Rules of the Supreme Court 1971 (WA), which provides that a party must discover all documents "relating to any matter in question." Although the Peruvian Guano approach is still applied, in Corporate Systems Publishing Pty Ltd v Lingard (No 3) it was held that "there is no strict entitlement to an order for discovery" and that such an order must be considered against the backdrop of the costs and time involved with the exercise.

The general practice in Australian courts is that parties certify discovery or disclosure by affidavit. Usually that requires a senior company officer with knowledge of the discovery process undertaken by the company to swear an affidavit that states that a reasonable search has been conducted and that identified documents constitute the documents in the possession, power or custody of the discovering party. This obligation does not distinguish between electronic and physical documents. In most cases, what constitutes ‘a reasonable search’ for ESI will have been discussed between the parties in advance, as part of the meet and confer process.

The Federal Court regime is typical of the requirements for the production and verification of a list of discoverable documents in Australian jurisdictions. Rule 20.17(1) of the Federal Court Rules outlines that a "list of documents" (List) must be made in accordance with the prescribed form. Rule 20.17(2) provides that the List must describe:

  • each category of discoverable documents in the party’s control;
  • each discoverable document that has been, but is no longer, in the party’s control along with a statement of when the document was last in the party’s control and what became of it; and
  • a list of the discoverable documents for which privilege is being claimed and the grounds of the privilege claim.

The List must also state whether there are any categories of documents for which a search was not made and the reasons for that (Rule 20.16(2)). Rules 20.17(4) and Rule 20.22 require that a list of documents must be verified by an affidavit sworn by a party or a company officer.

The Federal Court and each of the Supreme Courts have practice notes that provide a protocol for the production and exchange of ESI as part of discovery. The protocols are designed to be flexible and it is intended that parties will negotiate any necessary changes to the protocol, to meet the needs of the ESI in the case.

The Federal Court Practice Note GPN-Tech – Technology and the Court provides both a standard Default and Advanced Document Management Protocol template that details the form of production for electronically stored information. The Federal Court is in the process of updating these and the new protocol will be the Standard Document Management Protocol (SDMP).

The protocols used by Australian courts provide a default template for the exchange of discovery in electronic format, including:

  • document descriptions for any list of documents;
  • document numbering;
  • document structure, format and page numbering;
  • data exchange tables (including the fields to be included);
  • most appropriate electronic exchange media; and
  • using document numbers.

Other considerations include data security, redactions and handling of privileged or confidential documents.

Australian courts are receptive to the use of advanced analytical tools in eDiscovery. For example, Federal Court Practice Note GPN-TECH specifically notes that technology changes rapidly and states that the Court will bring an open mind to the suggestions of the parties in relation to the use of technology, including advanced analytic technology in cases. The approaches of the Supreme Courts in most Australian jurisdictions are similarly practical. It is expected that parties will disclose the use of advanced analytics and that there be agreement to their use as part of the meet and confer (or if no agreement is possible through interlocutory order).

Accordingly, Australian law firms and vendors have been utilising advanced analytics, including technology assisted review, for many years.

Judicial approval of TAR was confirmed in the Victoria Supreme Court's decision in McConnell Dowell Constructors (Aust) Pty Ltd v Santam Ltd (No 1) [2016] VSC 734, where the first Australian court issued a written opinion approving the use of predictive coding (TAR). In the McConnell Dowell case, the Supreme Court of Victoria held that the prospect of McConnell Dowell handling a manual review of four million documents in a cost-effective manner was unrealistic and ordered the appointment of a special referee to determine the appropriate actions to take in managing a case with a large number of documents. The parties agreed to the use of predictive coding (TAR) and established a protocol for doing so, in turn this approach was recommended by the special referee and adopted by the judge. The decision in McConnell Dowell held that orders for TAR fell within the Civil Procedure Act 2010 (Vic). Vickery J in this case referred to the United Kingdom High Court case Pyrrho Investments Ltd v MWB Property Ltd, where Master Matthews stated that predictive coding is as accurate, if not more so, than manual review utilising keyword searches.

The Victorian Supreme Court followed up the decision in McConnell Dowell by releasing a new practice note confirming TAR was an accepted method of conducting discovery when a large number of electronic documents needing to be manually searched is not reasonable and proportionate. The Supreme Court of Victoria’s Practice Note SC Gen 5 Technology in Civil Litigation went on to provide the authority for the Court to order discovery by TAR whether the parties agreed or not. The Practice Note outlines points that parties may include in a joint TAR protocol such as use of joint or party operator, general description of the system to be used (CAL, SAL, passive learning or any other appropriate system) and a description of the overall process and steps to be undertaken, including statistical measures used for quality assurance, reviewing team members, management of non-text documents, foreign language and scale of relevance to name a few. The Practice Note further states that the TAR protocol should be included in a discovery plan.

As set out in 11 Requirement to Certify that Search Carried Out, above, the usual practice is to identify privileged discoverable documents in the list of documents, disclosing basic objective data only (date, document type, author and recipients). Privileged documents are withheld from the exchange of discoverable documents in a matter and a party is entitled to rely on the claim for privilege to resist a call for inspection.

Where a question of privilege is contested, the court may order that the document be produced to the court for inspection and determination of the privilege claim.

It is within the power of the parties to agree to a separate procedure for the handling of privileged documents, such as use of quick peek or clawback agreements as part of the discovery protocols. In NSW, parties are required by Practice Note SC Gen 7, as part of the meet and confer process, to consider whether ESI is to be discovered on an agreed without prejudice basis, without the need to go through the information in detail to categorise it into privileged and non-privileged information, and without prejudice to an entitlement to claim privilege subsequently over any information that has been discovered and is claimed to be privileged.

Australian legal practitioners have an ethical obligation not to misuse documents inadvertently disclosed. Rule 31 of the Legal Profession Uniform General Rules 2015 provides that unless an exemption applies, a solicitor who receives or becomes aware of an inadvertently disclosed document must not use the material and must return, destroy or delete it. Furthermore, under Rule 31, the solicitor in possession of the inadvertently disclosed material must notify the other party of the disclosure to prevent inappropriate misuse of the material.

The High Court of Australia in Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited [2013] HCA 46 held that inadvertent disclosure of privileged documents will not amount to a waiver of privilege, provided it occurs in a court-ordered process and the party who committed the error acts promptly upon realising their error. To allow for the recovery of inadvertently disclosed privileged information by the producing party, clawback clauses are commonly implemented into the document management protocol. These clauses assist in avoiding situations where equitable intervention must be relied upon to recover privileged information.

The use or disclosure of ESI containing personal information is permitted for the purposes of discovery as part of a civil or criminal proceeding.

The Privacy Act 1988 (Cth) (Privacy Act), governs privacy law in Australia. Generally, an entity that holds personal information about a person that it collected for a particular purpose must not use or disclose the information for another purpose.

Section 16A of the Privacy Act allows for the use or disclosure of personal information if reasonably necessary for the establishment, exercise or defence of a legal or equitable claim, or for the purposes of a confidential dispute resolution process. This is a general exemption that applies in all litigation and dispute resolution involving Australian personal information.

Courts expect parties to be alive to the general need to protect personal information from unnecessary disclosure and will generally accommodate parties’ efforts to maintain confidentiality of personal information (for example, by use of redaction or pseudonyms), where that is appropriate in the litigation.

In Australia, the rules and procedures for the transmission of electronic evidence to a foreign jurisdiction are derived from the Hague Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters (Hague Convention), ratified in 1992. In the Convention, Australia generally authorises the transmission of electronically stored information overseas for the purposes of civil litigation. However, blocking statutes do exist that limit the transfer of ESI.

The Foreign Proceedings (Excess of Jurisdiction) Act 1984 (Cth) is one such blocking statute. This Act was enacted in the wake of the Westinghouse litigation that sought to address the deficiencies of its predecessors, the Foreign Proceedings (Prohibition of Certain Evidence) Act 1976 (Cth) and the Foreign Antitrust Judgment (Restriction of Enforcement) Act 1979 (Cth).

The 1984 Act aims to "consolidate and expand Australian laws which protect Australian trading interests and policies against the extraterritorial enforcement of foreign laws." Under Section 7, the Attorney-General may prohibit the production or any action that may lead to the production of documents in Australia to a foreign court. Predominately concerned with the extraterritorial application of US antitrust laws, the legislation intends to block the transfer of ESI where it poses a risk to Australian corporations and the political independence of the Australian government.

The Foreign Evidence Act 1994 (Cth) also provides for a further blocking provision at Section 42, where the Attorney-General has the power to make written orders prohibiting a document production and the giving of evidence or information, whether in relation to the contents of a document or otherwise. These powers operate in accordance with Section 41 of the Act, where they must not be exercised unless the Attorney-General is satisfied that it is desirable to do so for the purpose of preventing prejudice to Australia’s security.

Australia’s privacy regime regulates the treatment of personal information and the transfer of data to foreign jurisdictions. Australia’s privacy regime is regulated at the federal level under the Privacy Act 1988 (Cth) and the Australian Privacy Principles (APPs). Each Australian state and territory has enacted privacy laws that regulate the activities of state entities.

Specifically, APP 8 regulates the cross-border disclosure of personal information to overseas jurisdictions. Under APPs 8.1 and 8.2, an organisation must take reasonable steps to ensure that an overseas recipient of personal information does not breach the APPs in relation to the information and if it does, it is the APP entity that will be held accountable. This requirement does not apply where there is a reasonable belief that the recipient of the information will protect the information to a standard that is as at least substantially similar to the way in which the APPs protect information. There must also be enforcement mechanisms available in the overseas jurisdiction to the affected individual. This requirement is usually achieved by imposing contractual obligations on the receiving overseas organisation to treat that information in accordance with the Privacy Act. APP 8.2 outlines situations where 8.1 does not apply; for example, 8.2(c) if disclosure of the information is required or authorised by or under an Australian law or a court/tribunal order, or 8.2(e) if the entity is an agency and the disclosure is authorised by or under an international agreement relating to information sharing to which Australia is a party. Additionally, as set out in 15 Privacy Statutes & Rules or Regulations, above, an entity that is subject to Australian privacy law has a general exemption to use personal information for the purposes of court proceedings or confidential ADR procedures.

Corrs Chambers Westgarth

Level 17
8 Chifley
8-12 Chifley Square
Sydney NSW 2000

+61 2 9210 6500

+61 2 9210 6611

michael.do.rozario@corrs.com.au www.corrs.com.au
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Corrs Chambers Westgarth (Melbourne - HQ) has a market-leading Legal Technology Solutions group providing e-Discovery support to clients. It comprises over 20 e-Discovery professionals, including a significant forensic technology and analytics group that provides clients with end-to-end management of their evidence in litigation, ADR, investigations and inquiries. Corrs Chambers Westgarth has established itself as firm of choice for bet-the-company litigation throughout the country, being appointed to the most complex disputes in the country, acting for major multi-nationals and leading Australian corporates. Additionally, the firm has one of the leading class action practices in Australia – and the country has among the highest levels of class action activity in the world. Over the past 12 months, the team has been active on numerous mandates in this field, including some of the most of the prominent class actions to reach the Australian courts. The firm also play a prominent role for the Australian Government, acting in some of the highest-profile cases to reach the courts.

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