eDiscovery in SA - Does privilege extend to Service Providers and LPO’s?

I was very pleased to spend 3 extremely productive days in Johannesburg recently seeing six law firms and two service providers. Great meetings, presentations and discussions combined to tell me that more and more people are acknowledging that electronic documents are here right now and need to be treated accordingly. As with other recent posts this one is borne out of questions and conversations which came from this trip.

The question which forms the title of the post could be answered, perhaps sarcastically, by saying that if privilege does not extend to service providers and LPO’s then there are literally millions of lawsuits waiting to happen right across the world! 

Let us look initially at the basics of privilege which can be claimed to prevent documents for discovery and then I will follow with my views on this question, which appears to be important to some SA lawyers. In essence there are 3 types of privilege:-

  1. Legal professional privilege - whereby communications between lawyers and their clients are deemed to be privileged from disclosure.
  2. Litigation privilege - relates to communications, reports, statements, recordings, notes, conversations etc. made between the client or the lawyer and third parties in relation to pending or contemplated litigation. 
  3. Without Prejudice privilege - this relates to communications or statements made in settlement negotiations.

To examine some practicalities a useful starting point is that so much of SA’s laws of evidence is derived from the UK and to the very best of my knowledge and experience there has never been either legislation or case law on this specific point. I would go further and say that I believe this also to be the case in the USA or indeed anywhere else in the world. There have been cases involving privilege and other types of outside parties but not service providers and LPO’s. So, what is South Africa’s problem? It has been suggested to me that there is a fear that if privilege does not extend outside the law firm then that could open the possibility of a “third party” being subject to a subpoena to give evidence as to the content or existence of documents which would otherwise be privileged. 

I think it is important first of all to establish exactly how and on what basis third parties are engaged in a case.

I take the view that the law firm can protect itself and its client, in the first instance, by covering this aspect in its Letter of Engagement with the client by extending the privilege to others. I also take the view that the matter can be dealt with within the agreement or Letter of Engagement with the service providers and LPO’s. Before anyone jumps down my throat I totally understand that there is a difference between privilege and confidentiality and surely it is within the ability of lawyers to include suitable clauses in agreements or LOE’s. 

In order to make more sense of this I want to point out some important practical factors to support my argument.

Many cases involve the use of an external expert witness; an Accountant or Forensic Accountant in a financial matter; an Engineer in a construction matter; a Specialist in a medical matter; or dare I say it, an eDiscovery Consultant in a technical dispute about electronic documents. The list of possibilities is endless but you get the drift. In any of these instances it may be necessary to produce to the expert documents or statements which are “privileged” in order for the expert to give his opinion on his subject. Does it mean, therefore, that the expert could be subpoena’d to give evidence or even produce “privileged” documents? 

Even before the advent of electronic documents we would have had boxes of paper documents which would then have been copied for review purposes. If the person who copied happened to read or glimpse a document that was “privileged” could that person be compelled to disclose it? Law firms regularly outsource copying and I wonder if they think of “privilege” when doing so? Even if the documents are copied in-house it is inconceivable to think that a law firms’ privilege can extend to a copier operator so what do the law firms do - only allow the lawyers themselves to copy those documents? We are close to fantasy land now! With electronic documents being processed and hosted by a service provider the staff of the provider are in the same position as the copier operator - in other words it is nonsense.

The real motivation behind these concerns is, I suggest, aimed at persons who actually review documents in a case rather than process the documents.

Once again, let us look hypothetically, at for example, a matter in which the law firm realising that it does not have sufficient staff to undertake a review hires contract lawyers from an Agency or by advertising at a University or College. These contract lawyers are then temporarily “employed” on a contract to carry out a review in the name of the law firm. Does the privilege afforded to the permanent lawyers of the law firm extend to the temporary ones and more importantly what is the difference between contract lawyers employed directly by the law firm as opposed to contract or in-house lawyers of an LPO company? It seems to me that if the law firm contracts with an LPO company to assist with a review then those reviewing lawyers must enjoy the same protection with regard to privilege as lawyers within the law firm.

Sometimes the service providers who process and host the documents in a case also have reviewing lawyers or indeed they hire contract lawyers as above. There are other instances where the service provider contracts with a partner company, an LPO, to provide reviewing services. In my view, it would be unusual (and unnecessary) in a case of the latter, for the law firm to insist on a separate contract with the LPO as all should be covered within the agreement and LOE with the service provider.

Let us also note very very carefully that in most cases where a service provider works with an LPO company there are controls in place.

For example,  if the law firm knows that there are likely to be privileged documents within a collection between certain parties then the service provider can extract all documents between these parties and set them aside for review only by the law firm. If a competent service provider is being used with a good hosting solution then it is possible to disable printing or downloading so that a reviewer cannot physically possess a document. Above all it should be remembered that the LPO or service provider reviewers never actually possess the documents in a case, they are all held on the secure system of the service provider and the reviewers merely have visual access, as users, to perform their reviews. They are not physically given the documents and therefore could not be subject to a subpoena duces tecum.  It would be a case of a reviewer giving evidence under subpoena and being asked to remember if he saw a certain document or documents and what the contents were. Given that he is likely to be reviewing up to 500 documents per day is this really likely even if it got this far?

I must repeat that as far as I know there has never been a decided case anywhere in the world on this which says a great deal. Indeed if taken to an illogical conclusion then there would be no outsourcing anywhere at all! I guess the overall concern here is one of risk aversion by SA lawyers - sorry guys I think you are at much greater risk for failing to deal with electronic documents properly, where, I know, that many are not even being captured, never mind reviewed.