Is structuring the disclosure process at the outset on your radar?

In a recent ruling in the Sportradar AG v Football DataCo Ltd damages actions (Sportradar), the Competition Appeal Tribunal (Tribunal) refused a request for specific disclosure, providing useful clarification on the bounds and expectations around electronic disclosure in the Tribunal.[1] In particular, the ruling serves as a reminder for all parties to litigation to structure their disclosure processes appropriately at the outset.

Background

At a recent pre-trial review, Sportradar made an application for specific disclosure against Betgenius. The application concerned certain negotiations disclosure, which would be used to inform Betgenius’ subjective thinking regarding negotiations with another entity, Perform Content Limited, concerning a secondary supply licence.

As is common across most cases, disclosure in this case was framed by an order, pursuant to which the parties had already produced a substantially agreed disclosure schedule. The schedule was extensive, containing multiple issues in relation to which disclosure was to be given, and stating the proposed model of extended disclosure in relation to each issue. The Tribunal stressed that the documents reviewed and subsequently disclosed pursuant to the schedule were substantially electronic, and not in hard copy.

Ruling

Where electronic documents have been the subject of a tailored and carefully framed disclosure regime, the Tribunal noted that applications for specific disclosure are in that context “extraordinarily difficult to maintain”.

Differences between electronic and hard copy-based disclosure.

Notably, the Tribunal confirmed that the position with electronic disclosure is “extraordinarily different” compared to paper or hard copy-based disclosure.

Where a disclosure process concerns hard copy disclosure, the parties are involved in identifying among other things the file storage practices of the disclosing party, the relevant files within that universe, and reviewing those files by looking through them, using the "eyeballs" of qualified persons to ascertain what is and is not relevant, according to a pre-defined standard that is general in nature. Therefore, there is no need to set out the issues against which a search is to be conducted or to define precisely how the search is to be conducted. In those circumstances, once the disclosure process is complete, it would not be questioned or re-visited unless good reason could be shown (such as the inadequacy of the original process). Although further specific disclosure may be ordered, this would not involve a "re-run" of the original process.

Conversely, electronic disclosure includes a lot of front loading, as regards the documents that are isolated and then reviewed. The Tribunal illustrated this point by reference to a hypothetical process that is, broadly speaking, typical of today’s disclosure exercises:

• Firstly, it is necessary to isolate the relevant electronic files, either by reference to the electronic equipment operated by various ‘custodians’ and/or by reference to the servers and/or back up held by the disclosing party. The universe of documents so produced is generally vast and an “eyeball” review to determine relevance is almost always not practicable or cost-efficient as a first step.
• Instead, the volume of material produced for eyeball review is slimmed down or reduced through the use of information technology, such as key word searches or other forms of electronic sifting.
• The nature of the electronic sifting to be applied is almost always discussed between the parties and can be highly contentious, due to the difficulties in ensuring that key word searches produce all relevant documents for eyeball review.
• The slimmed-down universe of documents produced as a result of the electronic sift is then subjected to an “eyeball” review, so as to further exclude irrelevant or non-disclosable material. The material that is excluded from disclosure as a result of the electronic sift is not further reviewed and will never be produced on disclosure.

Therefore, it is important that the process of review, and the electronic sift, is done appropriately from the outset. The Tribunal affirmed that it would be near impossible for parties to strive for “perfection”, as the electronic sift is a binary tool that either excludes or does not exclude, and it does not exercise judgement. The Tribunal had therefore taken considerable time and effort to set out a series of issues which were debated by the parties, according to which the parties then conducted their search.

It is evident that it will take a great deal to persuade the Tribunal to conduct a re-run of such an exercise, which will typically require an expensive and time-consuming revised electronic sift (followed by a further eyeball review). Indeed, in refusing Sportradar’s application, the Tribunal noted that whilst the disclosure process is one of the foremost tools for getting at the truth and for producing important documentary evidence for the courts to consider, it is also one of the most significant cost centres in litigation, and that is a bad thing.

The Tribunal was not on this occasion prepared to contemplate such a review, which inevitably meant that certain documents which “might” exist and which, had the electronic searches been differently structured, “might” have been uncovered will not be uncovered for purposes of disclosure at trial.

When a disclosure process (such as the one in this case conducted under close supervision of the Tribunal and the High Court) has been completed, it is almost certain that there will always be gaps attributable to the search process. It is also close to inevitable that with hindsight, the search exercise could have been done differently. In such circumstances, absent the exceptional case, the Tribunal and High Court must make do with what has been produced.

Comment

The ruling reaffirms the importance of all parties to competition litigation structuring their disclosure processes appropriately at the outset, and clarifies that they need not, or indeed cannot, strive for perfection in doing so. Experience dictates that disclosure will almost always be prone to gaps. Parties should therefore not routinely rely on the benefit of hindsight in making requests for specific disclosure which refer to documents that might have been better searched for using a different process, which would only serve to cause the parties to incur unnecessary additional cost. If disclosure is subject to an ordered process, it may be more appropriate for the parties to effectively utilise that process.

It should also be noted that in circumstances where disclosure is becoming largely electronic, it is almost inevitable that when faced with an investigation or the prospect of litigation, electronically stored material will form a large part of disclosure. Parties should ensure that they carefully consider the structure of their disclosure processes, including any disclosure requests, at the beginning of the electronic sift, and they may well wish to make use of electronic disclosure services to assist in such processes.

 At the time of publication, the parties indicated that they are agreeing settlement terms.

[1] [2022] CAT 37