In a victory which extends to parties involved in complex,
document intensive litigation, the Supreme Court of Victoria on
Friday, 2 December 2016, endorsed the use of predictive coding in
discovery. This marks the first time the technology has ever been
approved in Australia in a Court process, and will potentially lead
to big changes in the way parties conduct discovery in major
matters in the future.
Predictive coding is software that is able to determine the
relevance of a document by using the attributes of documents that
have previously been coded as relevant by a lawyer. In a sense the
lawyer will 'train' the software by marking documents as
relevant and irrelevant in a sample provided to them until the
software is able to establish relevance on its own.
The case in question is McConnell Dowell Constructors v
Santam Ltd & Ors1, an insurance coverage
dispute in connection with a large claim that arose from the design
and construction of a natural gas pipeline in
Queensland.2 In an underlying arbitration concerning a
dispute about the construction contract, approximately 4 million
documents were discovered. The judgment of his Honour Justice
Vickery concentrated on how discovery should be managed in
document-heavy circumstances such as these (with large construction
projects ordinarily being accompanied by masses of documentation)
so as to comply with the principles of proportionality, and the
overarching purpose of a 'just, efficient, timely and cost
effective resolution of disputes', that are contained in the
Civil Procedure Act 2010 (VIC) (CPA).
Whilst the Plaintiff was able to reduce the number of documents
down to 1.4 million in the insurance case following a process of
de-duplication, the Court estimated it would take a junior
solicitor approximately 583 working weeks to review the remaining
documents. This estimate did not include the time that it would
take for a senior solicitor to conduct a review of the junior
solicitor's work, and for the other parties in the matter to
then inspect and review the same documents. Vickery J found that
this process would neither be proportionate or cost effective, as
required by the CPA.
After a special referee was appointed to facilitate discovery,
the use of predictive coding technology (also known as Technology
Assisted Review or TAR) was recommended to the parties.
In affirming the use of predictive coding for this case, Vickery
J cited both international case law and Australian Court practice
notes that support the technology. In the Australian context,
Vickery J noted a Practice Note set to be published in 2017 for
general use in the Supreme Court of Victoria:
In larger cases, ordinarily technology assisted review will
ordinarily be an accepted method of conducting a reasonable search
in accordance with the Rules of Court. It will often be an
effective method of conducting discovery where there are a large
number of electronic documents to be searched and the costs of
manually searching the documents may not be reasonable and
proportionate. In such cases, the Court may order discovery by
technology assisted review, whether or not it is consented to by
Vickery J indicated that the technology could have a potentially
wide application, and should not be confined to use in engineering
and construction cases, or even those cases in which all the
parties have agreed to participate in the process. In cases where
the parties cannot agree, Vickery J stated that a single party
could employ the software to conduct a review of its own
This decision recognises that deploying manual discovery
techniques in cases where technology has already facilitated the
creation of millions of documents is illogical, and demonstrates
that Australian Courts are embracing legal technology that makes
discovery in big litigation a more efficient and less expensive
process for everyone involved.
1  VSC 734
2 Clyde & Co act for the Second and Third Defendants
in these proceedings
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