We're taking you back to basics with an in-depth look at the privilege review process, including how to conduct a privilege review and how to reduce your discovery expenses.
Federal Rule of Civil Procedure 26(b) allows "privileged matter" to be excluded from the scope of litigation discovery. The oldest and most common type of privilege asserted is Attorney-Client. Attorney-Client privilege is defined as “A [written or oral] communication made between privileged persons in confidence for the purpose of seeking, obtaining, or providing legal assistance to the client.” Each element of the preceding statement is necessary for the privilege to apply. This particular privilege does not only exist during ongoing litigation, it can last the duration of the representation period and indefinitely after, including death. The scope of protection with any privilege depends on the type of privilege and your jurisdiction. For instance, some jurisdictions have expanded the scope of privileged matter to include other categories of privileged information, such as husband/wife or priest/parishioner privilege.
If a party to a lawsuit believes a privilege applies and wants to withhold information they must (i) expressly assert the privilege claim; and (ii) describe the nature of the documents, communications, or tangible items not produced or disclosed—and do so in a manner that, without revealing information itself privileged or protected, will enable other parties and the court to assess the claim. A party withholding privileged documents from discovery complies with Rule 26(b)(5)(A). A privilege log is often used to meet this requirement. A privilege log will contain information for each withheld document, including, but not limited to the date, type of document, author(s), recipient(s), general subject-matter of the document, and the privilege being claimed (e.g., attorney-client).
What is Discovery?
The discovery phase in litigation refers to the pre-trial period during which the parties have the opportunity to request and gather information that may support or shed light on their case. Discovery can be conducted through requests for production of documents, requests for admissions, and/or depositions.
eDiscovery, also known as electronic discovery, is a growing subsection of the discovery process that is carried out in electronic formats. It involves what most often is referred to as electronically stored information, or ESI. ESI includes, but is not limited to, emails, databases, audio and video files, social media, and web sites.
While paper discovery is still a significant part of the discovery process, the emergence of technology has made eDiscovery the largest and most expensive aspect of discovery. The processes used for eDiscovery are often complex due to the sheer volume of electronic data produced and stored. Additionally, unlike paper evidence, electronic documents often contain metadata such as time-date stamps, author and recipient information, and file properties. Preserving the original content and scanning for relevance is essential to ensure compliance with discovery requests.
In order to determine whether you have information, documents, or eDiscovery to produce, you will need to conduct a complete review of all of your documents.
How and When to Conduct a Review
Enacting two levels of document review will provide the most accurate review results. The first level is a high-level document overview used to separate documents that clearly do not meet privilege criteria from those that have the potential to be privileged. The second level is a more methodical review of potentially privileged information to ensure privilege does, in fact, apply as well as to develop justifications such privilege.
Level 1: Document Review
A document review of each page in your possession should be assessed and analyzed to determine what should be produced and what can be withheld from production to opposing counsel. It is a good idea to recruit document reviewers who are attorneys as they will have an easier time understanding the legal and factual issues in the case and can make the necessary decisions as to privilege and responsiveness. When conducting document review, you should establish standard operating procedures for items such as:
- Logging format (how you will track the reviewed documents, i.e. spreadsheet, automation software, etc.)
- Document tagging (a name convention or labeling system for each document)
- Privilege designations (for what categories of information will you typically assert privilege, i.e. attorney emails, protect health information, etc.) and
- Review hierarchy (what is the internal escalation process when privilege status is uncertain)
Reviewing and organizing your documents may seem like a daunting task initially, but once you establish this system of organization it will be easy to store documents moving forward. Investing in an automation vendor, can make this process even more efficient and allow you not only instantly categorize and enter document information, but also quickly generate reports and logs.
Once you have completed your initial document review and done a high-level separation of non-privileged and potentially privileged documents, you can move into the privilege review stage where each document is more closely examined.
Level 2: Privilege Review
Privilege Review is the stage during which all the documents initially tagged as "Potentially Privileged" during the document review will be subject to closer scrutiny and a final determination as to whether the document is subject to privileged status. This is also the point where you will need to note your justifications for asserting the privilege (i.e. “document was obtained during client’s trial strategy consultation and is thus subject to attorney client privilege”). It is crucial that your justification be legally sound. In In re Rivastigmine Patent Litigation, the court permitted a party to submit a privilege log, but warned that if it later found any justification inadequate, it would order all of the documents within that category to be produced without further review.
During your privilege review, it is also helpful if documents are sorted into categories. For example:
- Responsive: Will be produced. Documents are considered relevant, responsive, and not privileged.
- Non-Responsive: Will not be produced. Documents are not relevant and responsive.
- Responsive-Redact: Will be produced. Responsive, but need to be redacted because they contain confidential information, such as personally identifiable information (PHI).
- Privileged: Will not be produced. Responsive, but will be withheld from production entirely because they contain privileged information. These will later be itemized on your privilege log.
- Privileged-Redact: Will be produced. Responsive, but need to be redacted because they contain privileged information.
- Further Review: Tagged for further review by a subject matter expert.
The use of artificial intelligence and privilege review automation to read and identify documents that fall into each of the tag categories above allows teams to process all manner of electronic information faster and with greater accuracy.
After identification by the parties, relevant documents (electronic and hard-copy) should be placed under a legal hold – meaning they cannot be modified, deleted, or erased.
Logging Your Privileged Documents
Your privilege log will be an organized document or report that describes the items that you have labeled as “privileged” and will thus, not be producing. For any document marked privilege it is crucial that you draft detailed explanations for each item on your log where you expressly assert the privilege claimed and describe the nature of the documents.
In generating your privilege log, you should follow the same or very similar format as you established in the document review stage. As with document review, the privilege log will need to contain sections or columns for information on document date, type, author, recipients, purpose, etc. Using the same Artificial Intelligence or automation process for your log as you do for your document review will enable easy transfer of data.
Make sure the final version of your log is clear, descriptive and assertive so it can stand up to examination by opposing counsel and the judge. In St. Joe Co. v. Liberty Mut. Ins. Co, after reviewing the defendant’s log, the court found that the defendant was at risk of waiving privilege protection due to its inadequate privilege log, noting their failure to review all subject documents before asserting the privilege and failure to provide any support for its claim of privilege.
Redacted Responsive Documents and Producing Your Privilege Log
Where an entire document evidences a privileged communication, the entirety can be withheld. However, where only a portion of the document evidences a privileged communication, that portion can be redacted, and the remainder produced.
Redaction of privileged documents requires the utmost accuracy. However, redactions are often time consuming, expensive, and at high-risk of incomplete, inconsistent or inaccurate redactions and inability to ensure that linked documents reflect the redacted version of the document as opposed to the original un-redacted version.
Errors in redaction can result in inadvertent disclosure of confidential information and waiver of privilege. In the case of International Digital Systems Corp. v. Digital Equipment Corp, the court ruled that privilege can be lost through inadvertent disclosure [error in redaction] regardless of “the intention of the disclosing party.” This essentially means that once confidentiality is lost it is extremely difficult to get it back.
Luckily, many businesses are moving toward redaction automation. Advances in redaction automation and AI now give business the ability to almost fully automate this process for a more efficient, accurate, and secure process. For example, software can accurately auto-redact all 18 HIPAA identifiers, regardless of complexity.
Once all of your responsive documents have been compiled, redacted where necessary, you will provide them in response to the discovery request served upon you. Along with your responsive documents, you will submit your privilege log showing withheld documents and justification for review by opposing counsel and the court.
The Cost of Privilege Reviews & Ways to Reduce Your Expenses
On a case-by-case basis, eDiscovery costs depend on factors such as the size and type of data, amount of documents, complexity of review, and, most importantly, the eDiscovery process or software utilized (for example, manual processes are typically more costly and time-consuming than automation).
The Rand Institute for Civil Justice conducted a survey of Fortune 200 companies, where they found that “the average company paid average discovery costs per case of $621,880 to $2,993,567.” However, the same survey found that over 4 million pages of documents were produced in major cases that went to trial—only around 4 thousand exhibit pages were actually used. This means that a majority of documents produced will not be utilized, but you have the shoulder the cost of reviewing, analyzing and producing them just the same.
In a study of cases involving smaller businesses, The Federal Judicial Center, an independent research body, found that the median discovery costs for plaintiffs were $15,000, and the median costs for defendants were $20,000. Of those dollars devoted to discovery and investigation costs, producing electronically stored information (ESI) alone can comprise 60-80%.
There are many options for discovery review and production including, manual review, use of an automation vendor, or in-house review using self-configuring software. Manual review or software that you must manage yourself may seem like a good fit for your business, at first, but it can leave the door wide open to human error. However, the use of AI and automation, provides the greatest accuracy and consistency. Choosing the wrong eDiscovery solution can not only hurt your budget, but it can also cost you in other ways. It can delay your case, expose you to sanctions or waiver of privilege and even leave your data vulnerable to unintentional disclosure. For example, in Experience Hendrix, LLC et al. v. Pitsicalis et al. the court punished the defendant's inadequate privilege log and failure to remedy document production issues by:
- Issuing an adverse inference instruction (this allows the opposing party to assume, for the duration of the case, that the documents not produced were intentionally withheld because they were unfavorable to the non-producing party) and
- Ordering them to pay fees and costs to plaintiffs in bringing the motion to compel
In another case, Ceglia v. Zuckerberg, the infamous Facebook ownership case, a New York Judge ruled that an inadvertent disclosure waived attorney-client privilege since Ceglia could not show that he 1) took reasonable steps to prevent the disclosure (through a thorough privilege review) or 2) took reasonable steps to rectify the errors once he discovered the disclosure.
Whether purposeful or unintentional, human error can be detrimental to your privilege review. In addition to being cost-effective, utilizing automation or AI provides a more complete review of your documents and tracks your review process should you need to defend your efforts.