Supreme Court ruling on electronic discovery - Orders may extend to extracting and analysing data

In an important decision - Dome Telecom v. Eircom - the Supreme Court has held that the courts, as part of the discovery process, have the power to order a litigant to carry out data analysis to extract, collate and analyse records from a database and to produce a report containing that information. While this is not the first case on this point (the High Court made a similar order in 2006 in Used Car Importers of Ireland v. Minister for Finance) this is the first case to consider the issue in detail and the first time that the matter has been ruled on by the Supreme Court.

By way of background, Irish law on discovery is contained in Order 31 of the Rules of the Superior Courts, which gives the courts power to order parties to disclose to the other side those "documents" which are relevant and necessary to the case. This rule has been applied without difficulty to situations where what is sought is a specific document stored in electronic format - cases such as Clifford v. Minister for Justice have accepted that computer files should be regarded as "documents", and electronic discovery is now common.

What presented a problem in Dome Telecom was the traditional understanding of discovery as being limited to disclosure of existing documents. As Fennelly J. put it:

"a court will only order discovery of documents or records which exist. If no record has been made of a relevant conversation, meeting or event, a court will not, for the purpose of discovery, require a party to make one."

Here Dome Telecom alleged that Eircom had damaged its call card business by charging on a discriminatory basis for calls made from mobile phones to its 1800 freephone number. To put a figure on the damage suffered, Dome Telecom sought discovery of the total number of minutes of calls made to specific 1800 freephone numbers operated by its competitors. This was granted by the High Court, notwithstanding Eircom's claims that this would go beyond merely disclosing an existing document, but would require it to engage in an expensive analysis and filtering process to create an entirely new document. Eircom appealed, claiming:

1. That the power of the High Court to order discovery of documents does not extend to directing a party to create documents for the purposes of the action.

2. That the power of the High Court to order discovery of documents does not extend to directing a party to create documents that do not exist at the time that the order for discovery is made.

3. That the creation of the documents directed by the High Court imposes a disproportionate burden on the appellant where an order to comply with that order it would be required

(a) to extract in excess of 20 billion call data records from the tapes on which they are currently stored;

(b) to record the said records onto a parallel data base;

(c) to collate and analyse the records on the parallel data base in order to correlate them with the 1800 freephone numbers the subject matter of the order for discovery;

(d) to create therefrom a document containing a report of the total monthly volume of freephone minutes traffic per month from the 1st July 2000 to the 7th April 2005 in respect of each 1800 number by reference to access method by the appellant to international carriers – limited for the time being to those identified and set forth in the Schedule where the volume of minutes trafficked to that international carrier in any given month exceeded 5,000 minutes.

On appeal, the Supreme Court agreed by a majority (Fennelly and Kearns JJ, Geoghegan J dissenting) that the discovery was unnecessary and disproportionate in the particular circumstances of the case. However, on the matter of principle - whether the court could make an order of this type, and whether this amounted to requiring a party to create an entirely new document - the majority (Fennelly and Geoghegan JJ, Kearns J reserving his position) rejected the arguments of Eircom and held that the court could make orders requiring a party to analyse data in their possession and to present it in a certain form. Per Geoghegan J:

The Rules of Court are important and adherence to them is important but if an obvious problem of fair procedures or efficient case management arises in proceedings, the court, if there is no rule in existence precisely covering the situation, has an inherent power to fashion its own procedure and even if there was a rule applicable, the court is not necessarily hidebound by it. It is common knowledge that a vast amount of stored information in the business world which formerly would have been in a documentary form in the traditional sense is now computerised. As a matter of fairness and common sense the courts must adapt themselves to this situation and fashion appropriate analogous orders of discovery. In order to achieve a reasonable parity with traditional documentary discovery it may well be necessary to direct a party "to create documents" within the meaning of the notice of appeal. It may indeed also be necessary to direct a party "to create documents" within the meaning of the notice of appeal even if such "documents" "do not exist at the time the order is made". I am deliberately using quotation marks because I do not intend to adjudicate on the quasi-metaphysical argument of Mr. Paul Anthony McDermott, counsel for the respondent, that the "documents" do in fact "exist". At any rate that matter can probably be argued both ways but I would be firmly of opinion that an order of discovery can be made which involves the creation of documents which do not exist, made in the kind of context in which it is sought in this case. Otherwise, potential litigants could operate their business computers in such a way that they would be able to evade any worthwhile discovery.

This promises to be a very significant decision, and will certainly make electronic discovery more attractive for litigants while at the same time increasing the burden on those from whom discovery is sought.