Predictive Coding and the future of e-discovery in Australia

On 16 February 2016, the High Court of England and Wales gave judgment in Pyrrho Investments Limited & Anr v MWB Property Ltd and Others.1 The case scrutinised the use of predictive coding within litigation, a technology that streamlines the review of large sets of documents in an efficient and cost-effective manner. Predictive coding software learns from data input by a practitioner, and then uses that data to create an algorithm to scan and identify similar documents contained within large document sets.

By approving the use of predictive coding, the decision stands as an example of how courts are adapting to the technologies available to reduce costs and make litigation more efficient. The case is an important one, following endorsements from Courts in United States, of America and Ireland.2

Facts in Pyrrho

Prryho involved a dispute that required the review of more than 3 million documents. The parties sought the approval of the Court to use predictive coding as part of the disclosure process. The High Court of England and Wales highlighted ten factors in favour of approving the use of predictive coding technology, including:

  • Use of predictive coding technology in other jurisdictions has proven useful in appropriate cases;
  • There is no evidence to show that the use of predictive coding software leads to less accurate disclosure being given;
  • There will be greater consistency in using computers to apply the approach of a senior lawyer towards the initial sample to the whole document set, than using lower-grade fee-earners;
  • the cost of manually searching through 3 million documents would be extensive; and
  • the estimated costs of using predictive coding software is proportionate to the value of the claim.
Application in Australia

Although there has been no judicial consideration of predictive coding in Australia, many firms have already embraced the technology and Pyrrho is likely to be persuasive by Australian Courts some Australian courts have already demonstrated their willingness to embrace technology to simplify litigation and reduce costs,3 it is more likely than not that the use of predictive coding technology will be viewed favourably.

Some lawyers may hold concerns about trusting technology to make decisions ordinarily left to a trained lawyer. These concerns are especially relevant given predictive coding software is dependent on the parameters defined by the user. The software is only as accurate and thorough as the data that has been provided by the user to create the algorithm; however, provided the algorithm has been created by a reliable data set provided by an experienced practitioner, the software will be able to significantly reduce the costs of reviewing documents and provide an accurate and consistent result that is just as good as a review conducted by a human, if not better.

Pyrrho provides a strong indication that courts are willing to evolve to incorporate the use of technology; however, this does not provide practitioners with a licence to freely implement the use of all novel technology.

1 [2016] EWHC 256 (Ch)
See, eg: Irish Bank Resolution Corporation Ltd & Others v Quinn & Others [2015] IEHC 175.
3 See, eg: Idoport Pty Ltd v National Australia Bank Limited [6] [2000] NSWSC 338; Harris Scarfe v Ernst & Young (No 3) [2005] SASC 407.

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