October 2012 update

As a New Zealand company, we regularly add new features and enhancements to LawFlow to meet local requirements based on feedback from our users. Here is a selection of the latest updates:

Easier creation of repositories

Repositories are used to group related documents in order to create separate document lists. They can be used to create logical divisions in document lists, for example if you want to list a particular group of documents together on a discovery list, then you can create a specific repository for that group of document.

It is now easier to convert an existing folder into a repository (and vice-versa), and create a new repository.

Separate prefixes/suffixes for each repository

Each repository can now have its own unique prefix and suffix for list numbering. For example, if you have two repositories, “ABC Ltd” and “XYZ Ltc”, you can assign separate prefixes to list numbers in each. E.g. ABC.0001 for one repository and XYZ.0001 for another. Or, if you want to divide your lists by issue, then each issue can have its own prefix.

Continuous list numbering

Previously, each repository would number documents starting at 1. This meant that if you set up two or more repositories, each Part 1 document list in each repository would start at number 1. Now, you can set repositories to continue numbering from a previous repository.

For example: you have two repositories, ABC and XYZ. The documents in the ABC repository lists run from ABC.0001 to ABC.0099. The XYZ repository can be set up to automatically continue numbering, so its documents will be numbered from XYZ.0100 onwards.

Custom list start number

You can now set a custom start number for document lists in each repository, if you do not wish to start at 1.

Optional Part 2 and Part 3 lists

By default, each repository creates a Part 1, Part 2 and Part 3 list (corresponding to open, privileged and confidential documents under the High Court Rules). You can now optionally disable Part 2 and/or Part 3 lists for any given repository.

This can be useful, for example, when you do not wish to provide a list of privileged documents (Part 2 list) but instead wish to list privileged documents by group (which is expressly permitted under the rules). In such a case, you can disable the Part 2 list. This means that a Part 2 list will not be generated, and any Part 3 documents will continue numbering from Part 1.

More options for bulk-setting discovery information

Previously, LawFlow enabled bulk-setting of the discoverable, confidential and privileged fields. You can now bulk-set all discovery fields, including:

  • Document type
  • Date
  • Author
  • Recipient

More enhancements coming soon

These new features are available immediately to all users. Plus, more updates are coming soon, including a popular request from a number of users: the ability to add text to a redaction (for example, adding the word “Redacted” or “Privileged” to a redaction block).

If you would like to find out more about these features or arrange a demonstration of LawFlow, please contact us.

Handling confidential documents in discovery

By its nature, discovery often involves disclosing confidential documents, or documents containing confidential information.

Confidentiality is usually not grounds for withholding (i.e. not disclosing) a discoverable document. Documents can be withheld on the grounds of privilege (either as codified in the Evidence Act 2006, or the residual common law privileges) or irrelevance, but there is no privilege for “commercial sensitivity” or other such aspects of confidentiality (see ss 68-70 of the Evidence Act for other grounds).

But this does not mean that confidential documents need to be handed over without restriction.

The starting point is relevance, under the “adverse documents” test. If a document is not required to be discovered, then issues of handling confidential information in that document should not arise.

If a document is discoverable, then High Court Rule 8.15(2)(f) permits the producing party to propose “restrictions … to protect the claimed confidentiality of any document”. Rule 8.28(3) then permits the producing party to produce those documents subject to the proposed restrictions. If the receiving parties wish to challenge the proposed restrictions, they may do so pursuant to Rule 8.25.

There are several important points to note:

  1. The confidential documents must be listed as confidential documents in the affidavit of documents (usually ‘part 3’).
  2. The proposed restrictions on the confidential documents must be stated in the affidavit of documents itself.
  3. The producing party is free, within reason, to propose whatever restrictions they consider appropriate, though this should be read subject to the duty to co-operate.
  4. It is up to the receiving party to challenge the restrictions, if they wish. This will usually require an interlocutory application or a memorandum seeking directions (a party that inappropriately claimed confidentiality, or proposed inappropriate conditions, would likely have to pay costs).

What restrictions can be applied?

While rule 8.30(4) limits the use of discovered documents to the purposes of the proceeding only, and prevents extra-judicial disclosure, the producing party still may wish protect the confidentiality of certain information.

The producing party is at liberty to propose appropriate restrictions. Common restrictions include:

  • Redacting documents. While relevant information cannot be withheld on the grounds of confidentiality, non-relevant confidential information could be redacted, making the resulting document discoverable with redactions (“DWR”; the same can apply to privileged documents). For example, a document may be commercially sensitive because it contains sales figures or name of other customers. If sales figures or customer names are not relevant to the dispute, a redacted version of the document omitting that information could be provided (as a Part 1 document).

    LawFlow includes an easy-to-use redaction tool that allows you to safely redact documents directly in your browser.

  • Limiting inspection. Confidential documents are sometimes provided on an “attorney’s eyes only” basis that limits inspection to the receiving party’s lawyers and experts only. This is usually supported by an undertaking from the receiving party’s solicitor.
  • A combination of the above, where redacted versions are made available to the receiving party themselves (without restrictions), and the full versions are available for the receiving party’s lawyers (with undertakings) to inspect in order to confirm the legitimacy of the redactions.

Common sense should prevail

Care should be taken not to claim confidentiality over-zealously. Rule 8.30(4) provides a reasonably robust level of protection to all discovery documents, and it is not necessary (nor appropriate) to claim confidentiality across tracts of documents without an “elevated” need to do so. A robust case should be made.

In practice, most discovery issues of this nature can and should be resolved between the parties on a common sense basis – which is supported to some extent by the duty to co-operate that the new rules impose.

Increased project storage

In response to demand, we’ve increased the storage allowances for projects at no extra cost. This allows larger files to be stored per project. Please see our pricing page for details.

Which just goes to show that modern discovery is a “big data” process – one that LawFlow can help you manage effectively.

Application of new discovery rules

The new High Court Rules (requiring electronic discovery and changing the relevance test, inter alia) came into force in February this year. Somewhat unusually, though presumably by design, they contained no transitional provisions. This has led to contention in some proceedings instigated prior to February 2012 over which rules apply.

The position appears to be as follows:

  • The previous rules apply to discovery being undertaken pursuant to orders in place prior to 1 February 2012: Premier Events Group Limited v Beattie [2012] NZHC 1025.
  • Unless the Court orders otherwise, the new rules applies to discovery ordered after the commencement of the new rules on 1 February 2012, regardless of when the proceeding was commenced: Karam v Fairfax New Zealand Ltd [2012] NZHC 887, paragraphs 135-136.
  • Where discovery has been completed but no inspection has occurred, the new rules relating to inspection, including the requirement of electronic exchange, will apply: McGechan on Procedure, HRPt8Subpt1.03.

Tailored discovery under the new High Court Rules

A recent High Court judgment of Justice Asher includes some useful comments on tailored discovery and proportionality under the 2012 High Court Rules. While the decisions in Commerce Commission v Cathay Pacific Airways Ltd [2012] NZHC 726 is relatively straightforward, the comments carry weight because Justice Asher was on the Rules Committee that forumulated the new requirements.

The starting point in such a consideration of appropriate tailored discovery orders must be an analysis of the issues. Discovery categories will reflect the issues and will only be ordered for the discovery of documents that are relevant to those issues. Except in exceptional circumstances, these issues will be discernible from a review of the pleadings. Discovery orders that are essentially of a “fishing” nature are not part of tailored discovery. Orders will not be granted where the categories do not relate to a pleaded relevant issue, but rather a non-pleaded issue which might be pleaded should discovery reveal documents that support such a pleading.

Which highlights the importance of getting the pleadings right. It is surprising how much issues can “shift” from those pleaded, especially if insufficient analysis of available documents (usually only your client’s documents, pre-discovery) is carried out before pleading.

Of course, pleadings can be amended, and such amendment is commonplace (in Cathay the Commission was on the 5th version of its statement of claim).

On proportionality, His Honour says:

To determine the proportionality arguments in relation to tailored discovery of particular categories it is necessary to consider the chances of finding relevant documents in the discovery exercise and their degree of relevance. This should then be balanced against the cost of carrying out that discovery process. Broader considerations such as the amount at issue, the resources of the parties, and delay to the proceedings may also be relevant…

It is notable that it is not so much the amount at issue or the resources of the parties that are of primary relevance (though they are still factors), but balancing of the chances of finding relevant documents verus the cost of doing so. As His Honour clearly summarises:

In a decision whether to order discovery under the particular category it is necessary to measure the likely return of relevant documents against the cost of the exercise. If highly relevant documents may be revealed, then a greater cost can be justified.

Handling discovery documents – Physical vs Scanning vs Native

Discovery documents traditionally came in one simple form – paper – and production was a matter of physically copying those documents.

Today, the majority of original documents in most commercial cases are electronic – emails, Word documents, images – and there are a lot more of them. This has prompted a change in how documents can be most efficiently discovered.

There are 3 main ways (in terms of format) to exchange documents in a modern discovery:

  1. Printing all documents to paper
  2. Scanning / converting documents to PDF
  3. Providing documents in native format.

The new High Court Rules, in effect since February 2012, mandate electronic discovery as the default process. This requires the use of either or a combination of options 2 (scanning) and 3 (native format).

While the new rules remove any “argument” over whether discovery should still carried out physically, there are good reasons anyway for providing discovery electronically (which are the rationale for the new rules, as well as the reason why many firms have elected to provide documents electronically for some years), including:

  • Most modern documents originate in electronic format.
  • A printed version of an electronic document is not the same as the original document, which is what must be discovered.
  • A number of electronic documents cannot be printed anyway, e.g. audio/video files.
  • It can incur considerable unnecessary effort and cost to print documents.
  • The sheer volume of documents can result in a “paper war” if multiple copies of vast amouts of documents are printed, collated and bound.
  • It is more environmentally friendly.

In addition:

  • A printed version of an electronic document loses information about the document (e.g. hidden comments, document properties, cell formulas, etc) that may be properly discoverable.
  • Printed documents can no longer be searched.
  • Electronic documents can be handled in an e-discovery system such as LawFlow.

Some firms are currently in the practice of essentially carrying out discovery manually (i.e. on paper) and then scanning (or re-scanning) documents back into electronic versions. Unfortunately this can be a very inefficient way to go about the task.

As electronic documents continue to proliferate, a solution designed for New Zealand requirements such as LawFlow can enable discovery to be undertaken efficiently and effectively.