The Supreme Court of Victoria has become the first court in Australia to order the use of technology assisted review (also known as TAR), or predictive coding, in discovery.

The Court has also issued a new practice note on Technology in Civil Litigation, which came into effect on 30 January 2017.   The Court requires parties to agree on a practical and cost effective discovery plan incorporating the use of technology and to agree on a protocol for the use of TAR.

What is predictive coding?

Predictive coding is a sophisticated software that enables a computer to review documents and identify those that are relevant in a legal proceeding.

A person, usually a lawyer, firstly reviews and identifies a sample set of relevant documents. From the sample review, the computer is programmed to predict which documents are relevant to the issues in the proceeding from the full set. This can result in significant time and cost savings compared to traditional manual review of discovered documents.

While predictive coding is new to formal Australian court practice, the Supreme Court of Victoria recently made orders for its use in large scale document-intensive litigation.

McConnell Dowell v Santam

In McConnell Dowell Constructors (Aust) Pty Ltd v Santam Ltd & Ors (No 1) [2016] VSC 734, Justice Vickery made orders for the use of predictive coding in discovery.  This followed the appointment of a Special Referee to conduct a reference about the appropriate management of discovery, and to deliver a report to the Court.

The dispute involved the design and construction of a natural gas pipeline in Queensland, and related policies of insurance.  There were approximately 4 million potentially relevant documents which had been reduced to 1.4 million documents. Justice Vickery noted that it could take a junior solicitor over 583 weeks – or 230,000 hours – to complete a manual review of discovery.

The Special Referee was appointed to prepare a report for the Court on managing the discovery and reported that:

  • the parties agreed to procedures and protocols in relation to the discovery of all documents;
  • the Court should adopt the procedures and protocols agreed to by the parties as they are consistent with the obligations of all parties under the Civil Procedure Act and the Supreme Court Rules; and
  • the parties agreed that the use of predictive coding is appropriate for all of these documents and they had cooperated in establishing a protocol for this.

International experience of TAR

In adopting the opinions of the Special Referee and ordering the use of predictive coding, Vickery J noted that the use of computer technology to assist parties manage discovery has been recently recognised and endorsed in other jurisdictions, including the High Court of the United Kingdom (Pyrrho Investments Ltd v MWB Property Ltd [2016] EWHC 256 (Cth)), the High Court of Ireland (Irish Bank Resolution Corporation Ltd & ORs v Quinn & ORs [2015] IEHC 175) and the US District Court, New York (Rio Tinto Plc v Vale S.A. et al 14 Civ 3042 (RMP) (AJP) (2 March 2015) 2).

In the Rio Tinto decision, Judge Peck of the United States District Court highlighted that the use of computer assisted review is now accepted as ‘black letter law’ in the United States.

In the Irish decision of Quinn, the parties were in dispute as to whether TAR was accurate enough to ensure adequate discovery. The Court stated that the evidence was that TAR is at least as accurate and probably more accurate than manually identifying relevant documents.

Large scale document intensive litigation is very costly.  The use of predictive coding technology has finally arrived and is one innovation which will result in significant cost savings  for clients.