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Technology, big data and the regulatory arms race

In 2010, the then Office of Fair Trading (OFT) launched an investigation into a suspected price-fixing cartel between aviation giants, British Airways and Virgin Atlantic. The airlines were alleged to have conspired to fix fuel surcharge prices. However, the case collapsed following the discovery of 70,000 emails that had not been disclosed to the prosecution until the last minute due to a technical error.

The collapse of the case caused the OFT to be universally criticised, with commentators describing the investigation as a “fiasco” and the OFT exhibiting “incompetence on a monumental scale”.

Fast-forward four years and both the OFT and the Competition Commission (CC) have been dissolved and replaced by the Competition and Markets Authority. Thanks to the technological failings seen in cases such as the Virgin-British Airways price-fixing case, the two authorities may have created the impression that competition authorities lack technological prowess when it comes to investigations. Yet corporations hoping that this new authority will follow in the footsteps of its predecessors in the handling of electronic evidence should take heed; the CMA has a completely different approach .

How does the CMA differ from its predecessors?

More funding

The Treasury has granted funds which have allowed the CMA to invest further in the capacity it needs to increase the number of cartel cases it can pursue and the speed with which it can do so.

Increased quality and quantity of staff

According to Stephen Blake, Senior Director of the Cartels and Criminal Group at the CMA, the CMA has doubled the size of its Cartels and Criminal Group. In addition to doubling the size of that team, the CMA has also focused on building a team with the ability to work proactively and follow an intelligence-led investigation strategy. With this in mind, the CMA have hired a coterie of senior investigators and experienced intelligence officers.

Sophisticated technology

According to an experienced competition expert in London, “Enforcement authorities have learnt a lot over the past few years. They will have seen a change in the volume of documentation that needs to be collated and reviewed and this will have driven the change in approach which is now becoming apparent in their approach to information requests and general case management. The CMA has had the benefit of the hard lessons learned by the OFT, and will be far more engaged on this topic and cautious in planning how to manage an investigation, not just in terms of adhering to best practice but also in managing an investigation to criminal standards.”

To avoid repeating incident such as the Virgin-British Airways data mishandling, the CMA has adopted the same ediscovery and investigatory tools used by law firms and corporations undergoing scrutiny. In a dawn raid scenario, this means they are now able to process very large volumes of data quickly, scan entire corporate IT landscapes and drill down and forensically examine or analyse specific trails of evidence, in detail.

More collaboration

As part of the CMA’s commitment to implementing intelligence-led detection and enforcement strategies, leadership at the CMA has promised to foster closer partnerships with the police and other criminal enforcement agencies.

What will these changes mean for corporate compliance officers and in-house counsel?

The CMA has more funding, highly-trained and motivated staff and is actively pursuing investigations, as well as addressing the cases inherited from the OFT and CC. With the technological gap between authorities, law firms and companies now closed, the best way for corporations to prepare is to take a proactive approach to compliance. This can take the form of conducting regular internal investigations, streamlining and understanding data estates and for the ultimate in preparedness, arranging a mock dawn raid.

About Tracey Stretton

Tracey Stretton is a legal Consultant at Kroll Ontrack in the UK. Her role is to advise lawyers and their clients on the use of technology in legal practice. Her experience in legal technologies has evolved from exposure to its use as a lawyer and consultant on a large number of cases in a variety of international jurisdictions.

Ediscovery anywhere, Ediscovery now: New ediscovery Solutions for Germany

We are excited to announce the launch of in-country ediscovery processing capabilities in Germany, thanks to our new state-of-the-art and highly secure data centre, located in Frankfurt. We are also proud to announce the recent launch ofediscovery.com Onsite™, a self-contained, on-premise ediscovery solution.

This now provides us with the flexibility to process and host data for our German clients either in country or within the confines of a company’s own infrastructure without sensitive data ever having to leave German borders. Our German clients can now successfully meet ediscovery obligations while minimizing security and data privacy challenges.

For more information see our press release here.

 


Ediscovery überall Ediscovery jetzt

Neue ediscovery lösungen für Deutschland

 

Wir freuen uns, Ihnen heute die Eröffnung unseres Hochsicherheits-Rechenzentrums in Frankfurt am Main verkünden zu können. Zusammen mit der vor kurzem auf den Markt gebrachten mobilen Lösung ediscovery.com Onsite™ – gedacht für den Einsatz vor Ort beim Kunden – haben wir damit unsere Ediscovery-Kapazitäten in Deutschland entscheidend erweitert. Wir können nun Daten unserer deutschen Kunden im Land oder sogar innerhalb der abgegrenzten Infrastruktur eines Unternehmens bearbeiten und speichern. Unsere Kunden können ihrerseits mit diesen Lösungen ihre Verpflichtungen im Rahmen einer Ediscovery unter Berücksichtigung der Anforderungen an die Datensicherheit und den Datenschutz erfüllen.

About Tracey Stretton

Tracey Stretton is a legal Consultant at Kroll Ontrack in the UK. Her role is to advise lawyers and their clients on the use of technology in legal practice. Her experience in legal technologies has evolved from exposure to its use as a lawyer and consultant on a large number of cases in a variety of international jurisdictions.

2014: Data De-Tox and Tweet-a-Service

Digital Detox

If you are interested in predictions and do some “Googling” you will read about the future of wearable computers, the growth in super-computing and the emergence of exaflop machines capable of carrying out a quintillion (a million trillion calculations per second).  You can click on  a timeline for 2014 and read that the Internet will have greater reach than television, Google Glass will be launched to the public, most telephone calls will be made by the Internet and smart watches will be the latest must have gadget.  If you are interested in ediscovery predictions for this year you can read what some of us have to say by reading these articles on “E-disclosure 2014 and beyond” in the New Law Journal and on the SCL website.

Zero email and cyber-cleaning

By far the most appealing prediction I have read about so far for 2014 is the emergence of digital detox.  Given the deluge of data we produce daily via email and over-sharing on social channels it is quite clear we are now polluting our “virtual environments”.  I read recently that Atos, the IT company, with its 77,000 employees in 52 countries is embarking on an ambitious plan called the Zero email TM initiative which aims to reduce internal emails between employees by relying on other communication channels such as social media tools.   Of course, one has to ask whether this will simply result in the time being spent managing emails being diverted to the management of hundreds of chatter communication strings.  Nevertheless this is a bold and commendable move.

Some trend spotters are talking about the emergence of cyber-cleaning services which will help clean up our virtual environments.  That sounds like data nirvana and I am keen to find out more.  I do wonder though if any of us have time to back track and purge or clean up our storage unless we really have to.  It has become so cheap and easy to stash data and search across it and so hard to decide what to keep and what to through away.

Of course, for companies, and especially those exposed to legal action, retention and deletion raises some interesting legal and technical questions:

  • How do you decide what to keep and what to delete?

It’s all good and well to scrub your hard drive and purge the data from your mailboxes and devices but what if there is litigation hold in place requiring you to keep certain data?   You cannot simply delete with gay abandon and ignore company policy and preservation obligations.

  • How do you get to the data to delete it?

You may find is easy to delete posts on your company’s chatter tool or on Google Docs but how do you persuade your IT department or Google to deep cleanse their servers or sift through a mountain of back up tapes, delve into them and delete certain categories of data?

  • How do you ensure that you have really deleted it?

When it comes to ensuring that your tapes are in fact squeaky clean there are procedures like “degaussing” (which sounds a lot worse than it is). This  gives you an expert stamp of approval if you need to show, for data protection or confidentiality reasons that all copies of certain data have been destroyed properly.

This is a topic that needs more research and I am resolving to find out more by talking to experts like my colleague Tony Dearsley and writing more this year about digital detox.

Social media – from advertising to commerce

My second favourite prediction for the year relates to social media commerce.  I read the other day that Starbucks has launched its Tweet a coffee service which allows app users to buy a coffee for someone viaTwitter by simply tweeting “@tweetacoffee” to @ ….. (recipient’s Twitter name)”.  I am all for that kind of sharing and am wracking my brains for services to offer via Twitter.

If you have any ideas please Tweet them to me on @TraceyStretton.

About Tracey Stretton

Tracey Stretton is a legal Consultant at Kroll Ontrack in the UK. Her role is to advise lawyers and their clients on the use of technology in legal practice. Her experience in legal technologies has evolved from exposure to its use as a lawyer and consultant on a large number of cases in a variety of international jurisdictions.

Autumn Ediscovery News: New Solutions and Education for Companies

We are very excited this week to announce the launch of in-country ediscovery processing capabilities in Germany and France as well as Ontrack® Onsite™, a self-contained ediscovery solution that can be deployed onsite to any country.  Many of our European clients have grappled for a long time with data protection laws that restrict data transfers in cross-border cases and increase the complexity, cost and risk associated with ediscovery. We have also seen data security and the protection of intellectual property become more important to companies as cyber attacks, data breaches and surveillance become a day to day reality.  As our President and CEO, Dean Hager notes in our press release issued on 1 October, we are addressing these needs head on with flexible solutions that allow data to be processed either in country in Germany and France, in addition to already established data centre hubs in the U.S., U.K. or Japan, or behind a company’s own firewall when data cannot leave its premises.  If you would like further information about these new capabilities you can read our press release or give us a call.

Coinciding with the announcement we are also launching a complimentary webinar programme in EMEA in which we will be examining the management of electronically stored evidence from the point of view of corporate counsel in Europe and some of key issues which arise.

In our first webinar on 8 October on Data Control: Ediscovery Solutions for European Companies we will look at how to manage company data in litigation, regulatory inquiries and internal investigations when security, confidentiality and compliance with data protection laws are of paramount importance.   If you would like further information about the event please click here and if you would like to register please email us at events@krollontrack.co.uk.

We have on our panel:

Christian Kuss, Associate, IT, Copyright and Data Protection Law, Luther, Cologne

Mark Surguy, Partner, Fraud and Investigations Group, Eversheds, Birmingham

Thomas Sely, Electronic Evidence Consultant, Kroll Ontrack, Paris

Andrew Szczech, Director for EMEA, Kroll Ontrack, London (Moderator)

The panel will be discussing the reasons clients choose to process data in country or onsite, whether that be due to data protection and privacy laws or concern about data security.  We will also be looking into solutions such as behind the firewall ediscovery solutions, in country solutions and other legal mechanisms for handling data protection restrictions on cross-border data transfers and client concerns about confidentiality.  This intended to be a practical session and our speakers will share experiences in an area where the law is often grey and client’s appetite for risk varies.

In our next two webinars we will be hosting discussions on the following:

22 October – Ediscovery – What In-house Counsel Need to Know – what companies need to do to ensure that costs, risks and response times are reduced when responding to formal demands on company information such as discovery requests in litigation, compliance checks, due diligence or regulatory requests.

5 November – The Changing Face of Data Theft – what new risks companies face due to advances in technology such as the use of mobile devices, cloud storage and social media by employees and how to respond forensically

About Tracey Stretton

Tracey Stretton is a legal Consultant at Kroll Ontrack in the UK. Her role is to advise lawyers and their clients on the use of technology in legal practice. Her experience in legal technologies has evolved from exposure to its use as a lawyer and consultant on a large number of cases in a variety of international jurisdictions.

Document Review with an Army of One?

Ralph_SearchOn 10 September we are hosting a complimentary breakfast seminar in London for lawyers and litigation support professionals on “Predictive Coding – How it’s Bringing Innovation to Legal Practice”.  We are delighted to have as our guest speaker Ralph Losey, Partner and National e-Discovery Counsel at the US law firm Jackson Lewis who will share his extensive experience using machine learning technology in legal practice. We are also pleased to have as our UK legal expert, Neil Mirchandani, Partner at Hogan Lovells in London who will be commenting on the applicability of these technologies to UK legal practice.  Although this technology is not new there is still a lot of uncertainty in the UK about how it works and which cases and which document collections it works best on.

The seminar will include discussion on scientific studies comparing human to computer review, some war stories showing how the technology has worked and the cost benefit analysis looking at a recent survey of corporates and how to control disclosure costs.  We are hoping to debate the issues that arise in the UK in relation to the use of this sort of technology and what our experience of it has been.  For those who would like to stay on afterwards, there will also be a more mechanical session and demonstration of how to use the technology with Ralph.

If you would like further information about the event please click here and if you would like to register please email us at events@krollontrack.co.uk.  We are hoping for a lot of audience interaction and you can pose questions for the experts to answer during the session by emailing us or commenting below.

About Tracey Stretton

Tracey Stretton is a legal Consultant at Kroll Ontrack in the UK. Her role is to advise lawyers and their clients on the use of technology in legal practice. Her experience in legal technologies has evolved from exposure to its use as a lawyer and consultant on a large number of cases in a variety of international jurisdictions.

Reporting on Change

ReInvent Law London

My colleague Rob Jones delivered a six minute talk at Re-invent Law London, a novel crowd-sourced conference which took place in London on Friday 14 June.    His presentation “Wax Up, Not Wipe Out!”  was about seismic changes taking place in the legal profession.  According to Rob, “Change brought by technology is a wave and lawyers are like surfers out in the open waters. ‘Wiping Out’ (to fail) is an ever present risk that can lead to embarrassment or worse. It is better to ‘wax up’ the board and tackle the waves with enthusiasm and a little intelligence, to make sure that you stay on top of them”.    Rob’s talk was videoed and we will post a link to it soon.  For now suffice it to say that he looked into the crystal ball at a world driven by technology where justice will perhaps be obtained from the cloud through an app available on your tablet. He also looked at the tsunami of information surrounding us and how to extract meaning from it in legal disputes using new technologies like Technology Assisted Review.  Recognising that justice comes at a cost and the legal system is creaking and groaning under its own weight, Rob spoke about smart computers rescuing the situation by allowing leanness, efficiency and case winning power to enter the legal process. Referring to our experience using TAR on over 250 projects, Rob said that the computer is already looking over the shoulders of humans to build intelligence and suggested that it may not be long before similar algorithms are used to create a legal super brain that can predict outcomes, forecast fees and aid strategic decision making which could turn human lawyers into formidable competitors and opponents.

If you would like to read more about the event you can use the following hashtag on Twitter #ReInventLaw.

#ReInvent Law London

We found it to be a very refreshing conference with stimulating content and very high calibre of speakers on law and technology disciplines.

The Not So New Rules of Court

In the two months since the changes to the rules of court governing disclosure and cost management in litigation there have been no reported cases and very few anecdotal reports about how the new rules are affecting cases.  At this stage it seems that there are still more questions than answers about how cost management, proportionality and tailor-made disclosure will play out in practice.  We have been tracking the changes closely and have hosted two seminars on the impact of the new rules for the legal community in London and Manchester.  These enlightening panel discussions have involved members of the judiciary, experts from legal practice, and providers of disclosure-related services.  We have prepared a detailed note The Jackson Reforms on Disclosure and Costs Management:  FAQ, on some of the key questions lawyers are asking about the new rules along with insights we have gained about them.

As Mark Surguy, a partner at Eversheds and a respected voice on edisclosure recently pointed out, the weighing up of options, solutions and costs is a best practice approach to any dispute.  With that approach in mind, the new reforms should not present any client, lawyer or technology service provider with any difficulty.  Judge Waksman echoed this sentiment when he said in Manchester that there is no need for litigators to be afraid of the changes.  By far the best tactic according to Mark will be to get to the heart of a case quickly, using technology so that the client can understand the prospects of success and make the right decisions about settlement or further investment in the litigation.

On a Company Note

On the topic of change, we have seen some ourselves recently at Kroll Ontrack. Tim Phillips, has been appointed as the new Managing Director for our Legal Technologies business. Tim has been with us at Kroll Ontrack since 2007, serving as Sales Director for the European Region.  As MD, he will have responsibility for operations and business development throughout EMEA, reporting to Dean Hager, president and CEO of Kroll Ontrack.  Tim says, “I’m delighted to take on this new role. In the EMEA region, we are focused on steady growth and development geographically and in terms of new products and services to specifically address data privacy requirements.  Our vision is to leverage the extensive European footprint we have through our existing facilities to provide a full suite of electronic evidence handling software and services to our clients across the region. Our focus in EMEA integrates well with Kroll Ontrack’s broader strategy to help companies manage edisclosure strategically by making it a repeatable process that is managed at a portfolio level, not just at the one-off project level.”

About Tracey Stretton

Tracey Stretton is a legal Consultant at Kroll Ontrack in the UK. Her role is to advise lawyers and their clients on the use of technology in legal practice. Her experience in legal technologies has evolved from exposure to its use as a lawyer and consultant on a large number of cases in a variety of international jurisdictions.

Limber up for the Big Data Marathon

The Data Craze for Sports Fanatics and Lawyers

One of my colleagues has just run the Reading Half Marathon and I am expecting any minute to see his race stats published on Facebook.   Well done Rob Jones, a GPS time of 2:21:19.  Budding athletes and intrepid cyclists are downloading various  apps to their phones (like Endomondo Sports Tracker or apps.strava.com), relying on the information they gather to track distance travelled, time taken and  energy expended and using this to not only subtly show-off on social networking sites but also to plot and plan their race strategies. Of course, a positive spin-off is that the rest of us, having shared their pain and gain, feel inspired to do something similar and before you know it the data craze has turned into a sports craze and a new way of doing things. This phenomenon highlights how data can be transformed into intelligence, can inform decision making and strategy and possibly even have an unintended impact.  It got me thinking again about the influence that big data and predictive analytics is having on business and on the legal profession and how edisclosure fits into the picture.

Big data in business

Initially it was only big companies like telecommunications companies, banks and government agencies that could afford to store and analyse big data.  Thanks to advancements in hardware and databases you no longer need supercomputers to carry out complex analytics across large data sets.  Many businesses are finding that for a reasonable investment they can collect data and make it relevant to their business; by measuring consumer behaviour and using pattern detection they can respond to customer needs and market conditions and make data-driven decisions.   Supermarkets, healthcare providers, gaming companies, insurance companies and even florists are jumping on the bandwagon and tapping into the intelligence running through the big data stream and finding ways to monetise the data they hold.

But (and it’s a big but) what about law firms? 

Can lawyers, who have tended to shy away from technological innovation really harness big data to predict case outcomes and legal costs?   We know that big data can be exploited to predict the outbreak of diseases, but can it be used to predict the outcome of a litigation case?  In an interesting article by Mike Wheatley on Silicone Angle it appears that databases of legal history are being built up and algorithms are being developed to help predict case outcomes.  Apparently, companies are also developing mobile apps that predict the average legal cost of different types of cases in the US.

As we enter a new era of cost management in the UK and the need to stick to case budgets becomes more important, we will need all the help we can get to estimate costs and guess what impact variables like the number of witnesses or extent of disclosure might have, not only on costs, but also on the outcome of a case.  Of course the data that needs to be collected, analysed and correlated to make sensible predictions includes not just the key features and facts of the case itself but also the results recorded in subsequent court decisions.   When it comes to costs, law firms and e-disclosure providers are all holding a lot of valuable billing data that could be analysed to assist with cost estimating.   This might all be feasible but has not yet been done.

On the edisclosure front, data analytics has been used for some time.  We have had email analytic tools that can be used to visualize who has been communicating with whom, when and about what.  Similarly, Technology Assisted Review (TAR) (also known as Computer Assisted Review or Predictive Coding)  analyses decisions made by humans on a sub-set of documents, and then look for similar patterns in a much larger document universe to predict which documents are relevant to a case and top priority.    At this stage most of us know about TAR and some are testing the water. Here are some tips on analytics from the sports scene:

Sports analytics and the CIO: Five lessons from the sports data craze

Collect the right data to start with, both qualitatively and quantitatively.  In edisclosure this means targeting the right sources of data and is an area where experts can help.  Is it better to present a raw unfiltered set of data (to teach the system in a balanced way) or a set of results based on a carefully crafted search, or is that somewhat prejudicial. Until there are better statistics and more guidelines from real cases, the ultimate decision is likely to be a strategic one.

Start with statistically significant data.  This refers to the selection of your seed set of documents that will be reviewed by humans and used to train the prediction software.   You cannot expect the software to achieve peak performance on 1,000 documents.

Remember that the ability to contextualise data is important.  There are incalculable factors that come into play with prediction and this is where human quality control is vital.

Perhaps, as we use these predictive tools more in legal cases and share our practical experiences and results, their use will become widespread and a status symbol just like Nike + is.

About Tracey Stretton

Tracey Stretton is a legal Consultant at Kroll Ontrack in the UK. Her role is to advise lawyers and their clients on the use of technology in legal practice. Her experience in legal technologies has evolved from exposure to its use as a lawyer and consultant on a large number of cases in a variety of international jurisdictions.

All Change! Are You Ready? – The New Cost Management Rules

Cost Management Rules

The way in which litigation costs are managed is about to fundamentally change in the UK. From 1 April 2013 new costs management rules will require litigants to prepare and exchange litigation budgets before the first case management conference. The courts will thereafter approve and actively manage cases within the parameters of these budgets.

Which Cases Will Be Affected?

The new regime was initially going to apply to cases in various courts across England and Wales except for cases in the Commercial Court.

In a statutory instrument laid before parliament on 12 February the new rules were set to apply to all multi-track cases commenced on or after 1 April 2013 in a county court or the Chancery Division or Queen’s Bench Division of the High Court (except the Admiralty and Commercial Courts), unless the proceedings are the subject of fixed costs or scale costs or the court otherwise orders.

See http://www.legislation.gov.uk/uksi/2013/262/made

In a last minute change to the rules announced on 21 February high value cases worth more than £2 million will also now be exempt from the new cost management regime unless the court so orders.

http://www.judiciary.gov.uk/JCO%2fDocuments%2fPractice+Directions%2fcosts-budgeting-announcement-draft-direction-cpr-rule-3-12.pdf

This means that cases before the Chancery Division, Technology and Construction Court (TCC) and Mercantile Courts, worth more than £2 million will not be subject to automatic cost management.

As is normally the case, the Courts have retained the discretion to apply the new regime to “any other proceedings where the court so orders”. A Court might therefore embark on active costs management as part of case management and order budgets to be prepared. Of course, a budget is not something that can be put together on the back of envelope, so there is some advantage to being prepared ahead of time.

How Will the New Rules Affect Your Cases?

If the new regime does apply to a case then only costs that have been budgeted for and approved by the court will be recovered at the end of a case. The Courts have indicated in early case law that they will not depart from the budget without good reason (Sylvia Henry v News Group Newspapers Ltd [2013] EWCA Civ 19). Costs will need to be tracked accurately and budgets will need to be living documents that are kept up to date.

The key concept underpinning the change is that of proportionality when it comes to litigation costs and this is now made clear in the overriding objectives of the rules. Even costs that are reasonably or necessarily incurred might not be recoverable if they are out of proportion to the value of the claim or the issues at stake in a case. You will therefore need to focus more on costs from the outset of a case, particularly on the relationship between the estimated costs of running the case and the most likely ultimate recovery at the end, and shape your litigation strategy around an informed cost/benefit analysis.

What About Disclosure?

In order to budget effectively, you will need to consider and quantify disclosure requirements early on in the life of a case rather than leaving it to the last minute, which tends to be the current practice. Importantly, you will need to focus on the scope or extent of the disclosure exercise from the outset because that will shape the cost of the exercise which follows. That is where the new CPR rule 31.5 comes into the picture. It applies to all cases (except for personal injury cases) and requires that:

  • no less than fourteen days before the first case management conference each party must file and serve a serve a report verified by a statement of truth, describing what documents exist, how and where they are located and stored and estimating the broad range of standard disclosure costs.
  • not less than seven days before the first case management conference, parties must agree a proposal in relation to disclosure.
  • a new menu of disclosure options will allow the courts the flexibility to adopt a far more tailored approach in substantial cases. This includes limiting the exchange of documents to those related to specific issues only or other novel approaches such as simply handing over the “keys to the warehouse” and allowing the other side to find the documents they need.

What Now?

Even before their introduction, the anticipated changes to the CPR are already being changed. There is no doubt, however, that we are entering a new era of cost management in litigation and that cases will require a greater degree of management from the outset. The need to file a report and cost estimate on disclosure is still a fundamental change even if the need to file case budgets under the cost management rules has been restricted. Technical expertise is likely to be very helpful as approaches to edisclosure are designed and costed. Innovative technologies and techniques such as Technology Assisted Review and outsourced review can reduce the burden and cost of disclosure and these have a role to play in reaching the goal of proportionality. We are primed and ready to help you when the new rules are implemented.

About Tracey Stretton

Tracey Stretton is a legal Consultant at Kroll Ontrack in the UK. Her role is to advise lawyers and their clients on the use of technology in legal practice. Her experience in legal technologies has evolved from exposure to its use as a lawyer and consultant on a large number of cases in a variety of international jurisdictions.