E-disclosure - Divulging digital information

During litigation, documents from both sides need to be disclosed and, while many brokers will know that this includes electronically stored information, not all may appreciate the extent of electronic disclosure requirements or the current scrutiny being given to this area.

It is a misconception that electronic disclosure only applies to big-ticket litigation. With technology's rapid advance, every business is reliant on electronic sources of information. Moreover, disclosure is not something to be left for consideration once litigation is in train. Rather, anyone that may be subject to litigation in the future (whether brokers themselves or their policyholders) should be putting their house in order now to ensure that the relevant electronic documents can be identified, preserved and collected when the time comes.

A number of developments are pushing electronic disclosure higher up the courts' agendas. New requirements under the Civil Procedure Rules are due to come into force this year, including a technology questionnaire that requires all parties to confirm what electronic systems and equipment they use. Lord Justice Jackson's litigation costs review is also expected to consider disclosure, as it is suggested by many to be the biggest single cause of expense in the litigation process.

Evidence of the courts' increasing interest in electronic disclosure was seen in the recent case of Digicel v Cable & Wireless.

The claimants applied for disclosure of certain classes of document, specifically the restoration of back-up tapes, so that they could search the email accounts of former employees as well as for additional keyword searches across all documents. The disclosure exercise, already carried out by the defendants' solicitors, had reduced over 1.1 million documents to approximately 5,000 for disclosure, at a cost of £2m in fees and 6,700 man hours. Nevertheless, the court still ordered that significant further disclosure exercises be undertaken.

The court also took the opportunity to set out some very clear guidelines on the scope of electronic disclosure. The anticipated technology questionnaire and associated practice direction will ensure that the parties agree the scope of electronic disclosure before the task of exchanging lists takes place.

Now, therefore, is the time for brokers to consider what systems they have in place that may contain electronic documents (including word processing files, emails and files on back-up tapes, smartphones, laptops and so on), and perhaps consider drawing up a data plan so that, should the need arise, they can find what they need with minimum interruption. For smaller businesses, a fully understood back-up system may suffice. The same principle will also apply to all policyholders and a well-managed system can only be attractive to potential insurers.

- Richard Evans, partner and head of policy coverage unit, Beachcroft.