Insurance Claims
Your Top 10 eDiscovery Tips for Insurance Professionals
Samantha Green and Ray Wood | Litigation Management
Spring 2015
Insurance-covered cases add a layer of complexity to any litigation, but once you throw in eDiscovery risks and expenses, you could potentially have a debacle on your hands. Arming yourself with some information about eDiscovery can help control costs, understand risk and make better decisions.
I0. Pretending you are on ostrich doesn't make eDiscovery go away.
With data volumes growing exponentially every year and more and more lawsuits occurring, electronic discovery is here to stay. While there is no obligation to comprehend every bit and byte, a general understanding of how eDiscovery works, the costs and the risks can help you make informed decisions. The more you know, the more apt you are to ask your counsel questions and discern if eDiscovery is being handled properly. Mishandled discovery can lead to additional discovery, which equals added costs, aggravation and potentially sanctions. Take the time to acquaint yourself with eDiscovery. It's never fun to spend prolonged periods with your head under the sand, so make the effort to get a basic understanding and consider aligning yourself with one person who is comfortable with data and information technology.
9. Processing mean something different in the eDiscovery arena.
While processing in the insurance world is an obligation by the insured to receive, investigate and act on a claim filed by insured, processing data mean something completely different. This accounts for confusion when this line item shows up on eDiscovery provider invoice. In the eDiscovery context, processing is when the data collected is ingested by a tool that puts it in a format that can then be uploaded to a database for review. During the processing stage, data can be culled by key terms, date limiters, document type, etc.
There are a couple of models of how process data can be built, with the most popular being the "get in, get out" method. When this is done all the data is ingested at a low rate, and only the gigs that "hit" on terms and filters are extracted at a higher rate. If you expect most of the data to filter out, this billing model makes the most sense. However, if you believe almost all the data collected needs to be reviewed, and all the data can be processed on a per gig model. When review your invoices, there should be a red flag if you see thousands of gigs processed at one price.
8. Know when you should fight back.
With so many insurance-coverage cases having extreme asymmetry between the insurer and insured, make sure your attorneys are doing their best to limit discovery and attempting to get cost shifted when appropriate. Lawyers today, especially when you they know they have limited productions, will ask for everything but the kitchen sink. Put the burden of cost place on the producing party to collect, process and review their data, there is no reason for them to not too. That is why it is imperative that your council is equipped to go with the FRCP 20 6(f) meet and confer conference armed and informed. Counsel needs to know, before the conference, the amount of data responding to requests would produce, the costs associated and key custodians. If the data being asked for will cost as much to review and produces the cost of the case, there's definitely an argument for limiting the scope of discovery. The other side is asking for many custodians’ data, know ahead of time of those custodians or even likey to have any relevant data. Counsel can also ask for costs be shifted to the requesting party if the data requested is out of control. The narrower in scope the request, the narrower the discovery, and the lower the eDiscovery bills.
7. Not preserving the appropriate data can destroy your case.
Since much since much of what happens later in discovery is dependent upon having ensured that information relevant to the dispute is neither altered nor destroyed, it is imperative that all potentially relevant data be preserved. Failing to properly implement a legal hold can have serious consequences. Spoliation – the distraction or alter patient of relevant evidence – may lead to a range of evidence and monetary sanctions, some severe, including termination of a case of the opposing parties favor or loss of cooperation credit with investigating agency. Satellite litigation or preservation shortcomings can be an expensive and burdensome distraction from the merits of the case.
In order to ensure relevant data is not deleted, a legal hold notice should be sent and acknowledge by every person likely to possess or control potentially relevant information. The notice should explain the preservation obligation in a manner that ensures the recipients will receive actual, comprehensible and effective notice of the requirement to preserve information, and it should clearly define what information is to be preserved and have reservations to be undertaken. This notice should resent to all key custodians periodically to ensure they remember their obligations.
In addition to issue a written litigation hold notice, ensure counsel is taking the necessary steps to protect information from alteration or destruction. IT should be told to stop all auto delete functions and freeze any data that could be altered. This process should be documented.
6. Metadata is more important than you think.
Metadata or data about data has limited applicable the ability in the business world how many people really care about the last print date? However, in the world eDiscovery, modifying metadata, whether intentionally or accidentally, can have serious repercussions. Examples of metadata fields are author, creation date/time, modifications to the document, last time accessed, hidden or versioned text in the origin of the date. Metadata is what is used for searching, sorting and reviewing the data in the review platform.
When producing data for the other side, metadata is almost always sent as a load file with the document. If the metadata was not properly preserved or collected, it will change, which can be viewed as spoliation of evidence. The last thing you want is for there to be additional discovery (called discovery about discovery) over why the metadata was incorrect. Additional discovery means additional cost of potentially sanctions. Metadata holds extremely vital information in the litigation process.
5. Understand the triggering event.
The duty to preserve ESI is a generally triggered when litigation is reasonably foreseeable. Reasonably foreseeable? That just sounds like lawyer speak... what does it really mean? There's no black letter law governing a triggering event and there's really no clear answer in the insurance context:
"In insurance coverage context, it may therefore be argued that the duty to preserve does not arise when a policyholder's notice of a claim results in active good-faith negotiations with the insurer over the amount of coverage, or when the insurer agrees to advance defense costs subject to a strongly worded reservation rights. On the other hand, one federal appeals court recently rejected the contention of a party that litigation was not reasonably foreseeable merely because some contingencies existed before litigation would occur.” – P. Benjamin Duke and Mari K. Bonthuis, Electronic Discovery Iinsurance Coverage Llitigation, 2012 emerging issues 6867 (Matthew Bender and Company, Inc. 2012.) It is better to be overly cautious and over preserve than to not preserve. Spoliation is the leading cause of sanctions, so it's better to be safe than sorry.
4. There is more in this world than search terms.
While search terms can be a perfectly suitably way to cull down a data set, there are many other analytical tools that can be used to save both time and money. It is important to assess a case early to determine if and how these tools can help streamline the discovery process.
Examples of some analytical tools are:
Near – duplicate identification, which groups near duplicates together. There is a percentage provided on how "near" documents need to be, and a determination can be made early on the documents at, let’s say, 80% or above be bundle and only reviewed once. If something is found to be responsive, all the like documents will be pulled in for production. This gives much greater consistency to any review and cuts down on the number of document that need to be reviewed and checked.
Email threading, which can greatly decrease the number of emails need to review by letting you know if the email is part of a chain. The system can alert you to an email with the entire email thread as it can be reviewed once, which leads to greater speed and consistency.
Clustering, which analyzes data and groups together similar documents based on their conceptual relationships. For example, if a document mentions dogs, documents with references to canines, man's best friend, grooming and leashes will be grouped together. This allows you to do a fast analysis of the data set by seeing all the concepts present. Any key concerts are missing, a commune early indications of some data was not collected. If any key concepts are missing, it can be an early indication that some data was not collected. If any concepts are not relevant, they can be cut for the corpus of data to be further searched and reviewed. Also, clustering simplifies the review process by allowing a single reviewer to see similar documents all at one time. This improves consistency while reducing the time, effort and resources needed to run the document review.
Technology Assisted Review (TAR) is the most talked about analytical tool on the market. It is essentially a combination of machine–learning technology and workflow processes that use keyword search, filtering, and sampling to automate portions of the eDiscovery document review. A reviewer with a high level of understanding of the case will review a seed set of documents, which will then train the machine to be able to assess the entire corpus of data and evaluate if it is response for not. New case law has validated this process. Used properly, TAR can save both time and money.
3. Third parties are people too.
Insureds and insurers also should be aware that they occasionally may have a duty to notify third parties of their preservation obligations. In Haskins v. First American Title Ins. Co., the court held that the insurance company has a duty to issue a litigation hold two independent title agents because litigation was reasonably foreseeable and the duty to preserve extends to their pardons, as long as the documents are "within the party's possession, custody, or control."
Although it did not have physical possession of the documents, the insurance company controlled the agents’ documents because it had "the legal right or ability to obtain the documents from [the agents] upon demand." So don't forget to send out notices to anyone with data relevant to the case.
2. Don't forget about social media.
Organization should treat social media as they would any other ESI and assume it is potentially discoverable. The rule 34 the Federal Rules of Civil Procedure, litigants can request "any designated documents or electronically stored information – including writings, drawings, graphs, charts, photographs, sound recordings, images, and other data or data compilations – stored in any medium from which information can be attained either directly or, if necessary, after translation by the responding party into a reasonably usable form..”
Additionally, as it relates to insurance coverage actions, the collection and preservation of social media should be implemented at the claims stage of litigation. Of important note, during collection and preservation of social media, it is prudent to engage expert assistance from companies that specialize in the collection, preservation and management of social media. If data is improperly collected, it may not be authenticated and admitted into evidence.
1. The more you know, the better you can control risks and costs.
By understanding the impact of eDiscovery has on your cases, you take control of costs and risks before they occur. A little education on eDiscovery will better equip you to properly vet eDiscovery providers at ahead of time. By assessing providers and focusing your resources, you will get both bulk discount pricing and ensure the safety of data. With cybercrimes on the uptick, ensuring the safety data is extremely important.
The content of this article is intended to provide general information and as a guide to the subject matter only. Please contact an Advise & Consult, Inc. expert for advice on your specific circumstances.