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The truth about discovery

Legal matters

Trials are sometimes brought to a halt by a scrap over discovery. Discovery of documents is a process entered into by all parties after pleadings have been exchanged and before expert and factual evidence is prepared. Each party lists every relevant document and decides which should not be disclosed because they are privileged, because either they were produced with litigation in mind or they actually give legal advice.

The extent to which parties are obliged to disclose their documents depends upon their chosen dispute-resolution forum. In litigation, there are rules which stipulate in detail which documents should be disclosed and how they should be listed. The emphasis is upon relevance to the matters in issue. In arbitration, the 1996 Act gives the arbitrator far wider discretion as to whether any documents should be disclosed at all and, if so, how and when.

Discovery has a bit of a bad reputation, particularly in building cases, as a result of the sheer scale of the operation. Although the rules require disclosure of only relevant documents, relevance is usually interpreted as relevant to the contract rather than the case: sizeable projects produce vast amounts of documentation.

Examining documents and preparing a list is onerous and time-consuming. It does not warrant the time, or cannot bear the charges, of a senior solicitor, someone whose experience is sufficient to isolate the relevant from the irrelevant. Instead the work is done by trainees and paralegals. Inevitably they err on the side of caution: if in doubt - don't leave it out.

One hears stories, no doubt apocryphal, from some City firms of solicitors used to acting on major disputes, that there is seldom a case that does not need a warehouse to accommodate their discovery. With discovery on this scale, the cost of misprints and blank pages can run to a five-figure sum. It comes as no surprise, therefore, to learn that discovery is one of the most expensive stages of litigation.

Ironically, the use of inexperienced, and relatively inexpensive, personnel increases the cost of the exercise. They lack the management skills necessary to master the job, which then takes even longer than it should. Irrelevant documents will be photocopied innumerable times, which is expensive in itself, but not as costly as having them read by each party's teams of lawyers and experts.

Usually, it is not until trial bundles are prepared that the parties apply their minds to relevance. Even so, trial bundles for big disputes often run to upwards of a hundred lever-arch files. The hard-pressed tribunal calls for a core bundle of key documents and something in the region of 20 files is produced. Despite all this, as the trial commences and the courtroom drama unfolds, it becomes increasingly clear that a clutch of crucial documents has not been disclosed and proceedings are halted pending their production.

How can this be? The answer is seldom because a sharp-eyed protagonist has spotted that the future of the company depends upon the contents of a particular file, but usually lies in the haphazard way most businesses organise their filing. Different departments keep different records and have various ways of storing or disposing of dead files. When a director is advised by the lawyers that all relevant documents are to be disclosed, the message seldom seeps down to the technical department's archives and, if it does, it is unlikely that it will be thought to encompass the box of old files used to prop up the broken filing cabinet. As one worldly- wise expert once recognised, when it comes down to it, discovery is what you discover.

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