Disclosure and privilege update

There have been three cases of interest since our April update. These are briefly summarised below.

Disclosure: the Irish courts approve of predictive coding

Electronic disclosure is placing an increasing burden on the expense of litigation. Technology is fast-moving to assist with the process. Technology-assisted review (TAR) has the potential to significantly decrease the cost and time involved in document review. However, concerns have been raised with regard to its use, and were recently voiced before the High Court of the Republic of Ireland¹. The High Court's endorsement of the use of TAR is significant as it marks the first reported case where TAR is considered, and illustrates the growing judicial approval of the use of TAR and predictive coding in disclosure exercises.

The case for and against

TAR covers a variety of computer-aided review technologies, including predictive coding. In this case, the claimant sought the Court's approval to use a TAR methodology which involved identifying relevant electronic documents using a combination of technologies based on predictive coding and expert human input. Without it, it estimated that it would take ten lawyers nine months to manually review its set of potentially relevant documents, at a cost of €2 million.

The defendant objected and argued that:

• the fact that TAR would not capture 100 per cent of relevant documents meant it was not compatible with the claimant's disclosure obligations;
• TAR was not suitable for data sets of fewer than one million documents; and
• TAR would not lead to any savings in cost or time.

The Court's endorsement

The Court noted that the Rules of the Superior Courts of Ireland are silent on the method which a party should use to identify relevant documents for disclosure. However, the principles of expedition and economy were also relevant considerations. After considering United States case law and evidence on the use of TAR, the Court held that:

• the evidence established that, in disclosure of large data sets, the use of TAR incorporating predictive coding is at least as accurate as, and probably more accurate than, a manual review for identifying relevant documents;
• no method of identification is guaranteed to return all relevant documents; and
• TAR would also allow for a more expeditious and economical disclosure process.

The Court also held that the TAR process had to contain appropriate checks and balances so that each stage was capable of independent verification. The Court was satisfied that, provided the process had sufficient transparency, TAR using predictive coding would discharge a party's disclosure obligations under the relevant rules.

Slam dunk for TAR?

Parties are under increasing pressure to conduct cases as efficiently and cost-effectively as possible. Given the potential cost savings TAR can make, it is likely that the English courts would adopt a similar stance to that of the Irish courts.

Waiver of litigation privilege and the Freedom of Information Act

Hallows -v- Wilson Barca LLP² explores the interaction between the duties imposed on public bodies by the Freedom of Information Act 2000 (FOIA) and litigation privilege. It highlights the need to ensure that, where you are communicating with third parties for the purposes of any litigation, the third party is made aware of that fact and that the communications will be subject to litigation privilege. This is particularly important where the third party is a public body subject to the FOIA.

Wilson Barca LLP, a firm of solicitors, had registered title to a plot of land on behalf of the claimant, who filed proceedings alleging that Wilson Barca had failed to register certain rights of way. The claimant's new solicitor wrote to the local planning authority asking whether planning permission would be granted for development on the land. The solicitor told the authority the request was on a confidential basis but did not mention that it was being made in connection with litigation. Wilson Barca subsequently requested information from the authority under the FOIA and was given a copy of the advice which had been given to the claimant's solicitor. The claimant argued that the advice was legally privileged.

The High Court accepted that the advice was prima facie protected by litigation privilege. However, the claimant's solicitor had not told the planning authority that the advice was for the purpose of litigation. As such, the advice could come into the public domain by virtue of the authority's duties under FOIA to provide information to the public. The claimant had thereby impliedly waived any privilege which existed.

Another nail in Three Rivers' coffin?

A recent decision from Hong Kong on the application of legal advice privilege when the client is a large company is potentially a step towards a more common sense approach being adopted in England.

The English Court of Appeal decision in Three Rivers (No. 5) Limited the scope of legal advice privilege by adopting a narrow view of who is the client in the corporate context. The Court of Appeal held that only a small group of employees within the Bank of England tasked with responding to an inquiry was the client of the solicitors providing advice on how to respond to the inquiry. The client was not the corporate entity itself but the specific group of individuals who were expressly charged with seeking and receiving legal advice on its behalf. This meant that communications with ordinary employees outside of that group were considered to be non-confidential communications with third parties, and therefore not protected by legal advice privilege.

The decision in Three Rivers (No. 5) is controversial and has been criticised as unrealistic in the context of the large corporations which are reliant on the input and involvement of a broad group of employees to seek effective legal advice.

In Citic³, Hong Kong's Court of Appeal rejected the narrow definition of "client" adopted in Three Rivers (No. 5). The Court of Appeal took a pragmatic view and found that a dominant purpose test, rather than the restrictive client test, should be used to limit the scope of legal advice privilege. Under the dominant purpose test, communications will be privileged where they are created for the dominant purpose of obtaining legal advice. This can cover internal communications within the company and direct communications with the company's external solicitors.

Who and what is covered will always be fact dependent. In Citic, privilege covered information provided to external solicitors by employees who were not part of Group Legal (which had been regarded as "the client" at first instance), as the information was clearly provided for the purposes of seeking legal advice. The Court of Appeal recognised that a small group of legally qualified employees is unlikely to have the technical knowledge and skills required to gather information necessary for the purpose of seeking legal advice and they would need to involve employees from throughout the corporation.

Hong Kong's approach is now in line with that of Australia, Singapore and the US. It is hoped that the English courts will follow suit if given the opportunity.

A more detailed analysis is available here.

<sub>1. Irish Bank Resolution Corporation Limited and others -v- Sean Quinn and others [2015] IEHC 175.
2. EWHC (Ch), 10 September 2015.
3. Citic Pacific Ltd -v- Secretary for Justice CACV 7/2012, 29 June 2015.</sub>