Hat tip to Martin Nikel for making me aware of this case for which he provided an expert report to the plaintiff. The case is the latest eDiscovery disaster (the latest not involving Alex Jones, that is) but since it’s “across the pond”, it’s really an eDisclosure disaster.
The latest eDiscovery disaster involves the case is Cabo Concepts Ltd. v. MGA Entertainment, and the July 29th ruling is available here and an article discussing the ruling from Legal Futures is here. The case involves alleged anti-competitive actions by the defendant against the plaintiff, a UK toy start-up which claimed the defendant’s actions put it out of business. Ronit Kreisberger QC, acting on behalf of the plaintiff, identified “five overarching themes which, taken together, justify an order for indemnity costs”:
- MGA’s original insistence on e-disclosure being conducted in-house
- Inadequate supervision of the e-disclosure process by Fieldfisher (defendant’s counsel) and its in-house document review provider, Condor Alternative Legal Solutions
- The suite of technical failures that occurred during the e-disclosure process
- Failure to identify “red flags”, i.e. indicators that the disclosure exercise was defective (Kreisberger also described this as “turning a blind eye” to the deficiencies), and
- The defective nature of the re-harvesting process which has been undertaken since the deficiencies in MGA’s disclosure exercise have come to light.
What were the “technical failures” in the latest eDiscovery disaster? They included:
- The use of Microsoft Outlook software to conduct search and collection “which is not designed for a disclosure exercise of this sort and has various well-known limitations”,
- The “inappropriate” use of Microsoft 365 “which (whilst it is commonly used in e-disclosure) also appears to have limitations when it comes to searching data”,
- The failure to follow guidance from Microsoft as to how to conduct date range searches in mailboxes held in Microsoft 365, a failure which led to the “Creation Date” field being used instead of the Sent or Received dates, leading to incorrect results (described by Kreisberger as “a rooky error”),
- The decision to filter the data prior to upload in circumstances where MGA wrongly believed that full dataset exports would result in significant extra expense in data hosting charges, and
- The failure to exercise appropriate levels of quality assurance and control.
Failure to identify “red flags” included failing to act on a key email from the senior vice president of MGA UK to a toy retailer and a small number of relevant emails by the senior VP to Fieldfisher. Fieldfisher stated that it was “not unduly alarmed by this”, knowing that “disclosure is an imperfect process and errors occur”. There was also a batching error that caused another 389 documents to be omitted from review.
So, how many documents were missed? As noted by Justice Joanna Smith, “it now appears to be common ground that approximately 40% of documents were missed by MGA at the harvesting stage (just over 1 million documents were harvested with something in the region of 800,000 documents having been missed), that nearly half of all potentially relevant documents were never even reviewed and that a number of warning signs were (inadvertently) overlooked” (emphasis added).
What were the consequences of the latest eDiscovery disaster?
- The trial, which was to have started on June 27th, was pushed back to October 1, 2024 – over two years later.
- Justice Smith awarded the plaintiff 45% of the plaintiff’s total costs incurred in preparation for the trial, which amounted to £578,444.17 of the £1,285,431.49 plaintiff costs.
These are a few of the highlights (or lowlights, depending on your perspective) of the case and the eDisclosure process that took place – you can check out the full ruling here for much more.
Justice Smith did note “that the failures on the part of MGA were not deliberate”. With that in mind, it seems evident that the defendant’s insistence on managing the collection process and the provider’s lack of oversight and management of that process played a big part in what happened in the latest eDiscovery, er, eDisclosure disaster. If any case illustrates the importance of having experienced eDiscovery/eDisclosure professionals involved in the project, this one does.
In a recent case I covered, Illinois District Judge Iain D. Johnston cited “Hanlon’s Razor” as a possible explanation for the failures in that case to preserve video evidence. As he noted, Hanlon’s Razor states “in its most polite form, that we should not infer malice from conduct that can be adequately attributed to incompetence.” But incompetence still has a price, and, in this case, that price was over £500K.
So, what do you think of the latest eDiscovery disaster? Please share any comments you might have or if you’d like to know more about a particular topic.
Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by my employer, my partners or my clients. eDiscovery Today is made available solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Today should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.