Technology, Courts and Arbitration/Managing Technology

Technology, Courts and Arbitration - Courts

General Background

The New Zealand courts have introduced the widespread use of computer technology principally in a manner similar to a business or firm. In other words, computers are used internally in the management of aspects of the court business, in the creation of documents (notices, judgments etc) and are available to judges, with a number of productivity applications, in a manner similar to their use by lawyers.

In addition, transcripts of oral evidence in the High Court are available as a matter of course in digital form as well as in hardcopy form and, in a small number of lengthy document-intensive cases, a document imaging system has been installed in the High Court for the use of the Court, counsel and the witnesses.

Despite the use of computer technology internally by the courts and the widespread use of computers by the profession, the fundamentals of litigation practice have not altered. It remains paper-based and no rule changes to allow or require such things as electronic filing or service of court documents or electronic exchange of discovery lists, trial bundles (sets of documents required for the trial) or briefs of evidence have occurred.

Specific rule changes regarding the use of new technology to date have been limited to the taking of evidence by videoconferencing or teleconferencing in real time in Australia.

While there is an awareness of the potential importance of computer technology in the future development of the New Zealand civil justice system, pressure for change is not coming from the profession. Until pressure is exerted by the profession, the necessary changes to the rules of procedure and the capital investment by the Department of Courts are unlikely to occur.

Commencement of action

There is no provision under New Zealand rules of court for electronic filing or commencement of an action. The rules expressly require the filing of paper documents.

Jurisdiction

Issues relating to the use of electronic communication can arise on question of jurisdiction relating to the formation of contracts which is one of a list of criteria appearing in the rules of court, any of which would confer jurisdiction on the New Zealand courts. The New Zealand courts are yet to rule on the formation of contracts by email or webpage forms.

In the area of forum conveniens, the availability of evidence via videolink (discussed below) and ease of communication as a result of advancing technology generally have been weighed in the balance in cases in which New Zealand courts have had to exercise discretion on whether to retain a case in New Zealand.

An interesting aspect of the videoconferencing and teleconferencing rules which exist for the taking of evidence in Australia for New Zealand proceedings and vice versa (which are discussed further below) is that the appearance on videolink in the country where the witness is located is regarded as extending the jurisdiction of the foreign court into the former country. The rules make specific provision for counsel in the former country to participate in the foreign hearing and other provisions indicate that the administration of the oath and control of the examination (including questions of privilege) are in the hands of the foreign court. These intrusions into sovereignty are limited only to the two countries (Australia and New Zealand) and are mutually conferred by rules in each country.

Service of process

There is no provision under New Zealand rules of court for electronic delivery of documents. The rules require personal service of paper documents in the case of individuals and physical delivery of paper documents in the case of companies. Subsequent service of paper documents on solicitors for parties may be effected by delivery, post, document exchange or fax. Service by email attachment, for example, is not provided for in the rules of court.

Procedure to identify issues

The procedures to identify and refine the issues (pleadings, particulars) require paper documents.

Discovery procedure

The rules of court require the provision of a written list of documents, usually verified as complete by affidavit. Similarly the other parties are entitled to inspect the original documents of the discovering party, although they may accept the provision of copies. In the case of interrogatories, they must be delivered in writing and answered in writing on oath (affidavit).

Despite the lack of provision in the rules, parties to litigation may co-operate in providing discovery lists or documents in imaged form electronically. In a case in which I was involved, arrangements to provide lists of discoverable, non privileged documents in a form which could be directly imported into the document database application which was being used by all parties in a multi-party action were largely agreed but did not proceed because of an early settlement.

Witness examination

A significant development in recent years in New Zealand civil litigation practice has been the move from purely oral presentation of direct evidence to pre-trial exchange of briefs of evidence (witness statements or proofs) which are read at trial. This is now virtually invariable practice for civil trials.

While the rules require the service of briefs of evidence in paper form, they are almost inevitably prepared using a word processing application and could be made available to other parties in electronic form (such as diskette or email attachment). It is not common to do so.

Evidence given orally at a hearing in the High Court is transcribed in a system which can provide output in both electronic or paper form. Parties are able to obtain an electronic copy of the transcript for use on their own computers, perhaps using a transcript management application, or indexing or word searching utility. The present system used by the courts does not provide live feed or perfect transcription (the output is likely to contain typographical errors and typist abbreviations as a result of pressure of production), the latter being an issue for the use of word searching.

Videoconferencing is the recent exception to rules of court which otherwise assume the continued use of paper and/or the appearance of live witnesses before the court.

The new court rules make specific provision only for the receipt of evidence by videolink or teleconference from Australia and mirror similar rules in that jurisdiction. Judicial experience with videolink in Australia is now creating a strong preference for evidence in other countries by that method rather than the taking of written depositions before trial under letters of request and similar procedures.

My firm was involved in a recent case in which the existing procedures both in New Zealand and England were used to achieve the receipt of evidence by videolink from England. The witness resided in England, would not co-operate voluntarily with the party calling him (requiring compulsion to attend examination) and would give evidence which gave rise to credibility issues. An application was made in New Zealand to issue a letter of request to the court in England. In response to the expressed preference of the New Zealand trial judge to see and hear the witness, the examination time and venue were set by the English court so as to enable the process to be the subject of a videolink with New Zealand. The examination took place in England before an examiner appointed by the English Court and a written deposition taken in the usual way. Counsel conducting the direct examination and cross-examination did so via videolink and the New Zealand trial judge was also in attendance at the videoconference facility; the witness, the examiner and an English solicitor attended at a similar facility in England. The example illustrates the fact that rule changes are not always necessary to utilise technological advances.

Document imaging systems and real-time on-line transcription of oral evidence are not routinely available but have been used in a limited number of cases. Each of these technologies was first used in lengthy criminal trials prosecuted by the Serious Fraud Office and each has been used subsequently in civil trials. However this use is exceptional and has required the parties to the litigation to procure the services and install them, with the assistance of the Court, in the assigned courtroom. While the courts have shown a willingness to co-operate in the installation of the necessary equipment on a case-by-case basis, the cost and responsibility for arrangements is borne by the parties to the action.

Settlement

The rules of court provide for a settlement conference before a judge (who may not hear the action if it proceeds to trial) originally by agreement of the parties but, more recently, by order of the court. No provision for the use of technology is made.

Judgment

Judgments may be delivered orally in court with a written transcript being issued subsequently or in writing through the Registry of the court. They are not provided electronically.

Access to court records and documents

The New Zealand courts receive, hold and manage the documents filed in actions in a system which is entirely paper-based. There is a paper record of filings and documents are held on a physical file. No computer-based document management system is in use although one may be established in the medium term.

As a consequence, no provision for electronic public or third party searching of court records is available. The rules of court also make express provision, with specific limitations, for access to court files. While a case is pending, access to any document is restricted to parties or those who can show a proper interest in the action. Access is provided by physical inspection or the provision of a photocopy. Even if a document management system were introduced, unrestricted electronic access to pending cases is most unlikely.

Database of pending cases and judgments

While the New Zealand courts do not utilise computerised document management, computerised case management is in use in a number of courts around the country. The system tracks the progress of cases and allocation of fixtures, not the documents filed. At present the system is neither universal nor integrated (ie there are separate systems in each location where it is used). The Department of Courts plans to introduce an integrated case management system and this is likely to proceed in advance of any introduction of computerised document management or storage. Although the courts themselves make use of computer applications to manage their business, including monitoring the progress of actions filed, there is no external access to this information.

While there is greater public rights of access to court files after judgment, including copies of the judgments themselves, no public database of cases, even those in which judgment has been given, is available within the court system.

Third parties may gain access electronically to judgments of the New Zealand courts in the following ways:

• Cases which are reported in the official law reports or in one of the specialist law reports are usually available electronically in full text on CD-ROM or via an on-line service such as Lexis.
• In addition to reported cases, many providers of full text decisions include otherwise unreported judgments of courts. By way of example, unreported decisions of the New Zealand Court of Appeal since 1990 and the Privy Council (on appeal from New Zealand) since 1988 are available in full text electronically.
• Summaries of unreported decisions are available electronically from several publishers, often derived from paper publications. From a summary (whether located in paper or electronic form), a request may be made for a paper copy of the unreported judgment either from the publisher or related judgment service or from the court itself, if it is not available in full text form electronically.

Different procedures for different classes of cases

Since 1 May 1994 the High Courts at Auckland and Napier have been conducting a case management pilot. A similar pilot was started in the District Court at Auckland on 1 September 1995. Both pilots involve classifying all actions at an early stage for subsequent judicial management. The classifications are as follows:

• Immediate track: Bankruptcy, company liquidation, summary judgment, originating applications and urgent injunctions and applications for judicial review.
• Swift track: Urgent civil actions, cases for which a priority fixture has been granted, appeals or applications for review, cases involving limited legal or factual issues (with agreement of the parties).
• Standard track: Everything else.
• Complex track: Cases requiring higher levels of judicial management.

The classification of each action results in the Court aiming to manage actively the pre-trial process to achieve a resolution within an ideal timeframe depending on the track assigned. The normal rules of procedure continue to apply but the timing is the subject of greater judicial intervention with pre-trial procedures being dealt with at judicial conferences scheduled periodically by the Court rather than on an ad hoc basis in response to applications filed by the parties.

The process is neither dependant upon nor affected by the use of technology other than that which would be used in the normal course. The assignment of a case to a particular track has no effect per se on the extent to which new technology will be used.

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Arbitration

General background

Arbitration in New Zealand is a private, decentralised process. No large, centralised arbitral facilities or organisations have yet grown up, providing a full arbitral service including sophisticated technological services. The application of technology to arbitral proceedings is in the hands of the parties, their counsel and the arbitrator. Because of the absence of large fully integrated arbitral service organisations with premises and facilities, the use of advanced technological applications has been ad hoc. Documentary imaging and real time on-line transcription have been used on a small number of lengthy and complex arbitrations but the lack of ready availability of such services, conveniently packaged, results in cost and inconvenience in arranging their supply on a case-by-case basis. This is a substantial impediment to the use of this technology in other than the largest cases.

New Zealand arbitral procedure was the subject of recent review, resulting in the Arbitration Act 1996. The Act contains rules of procedure in two schedules. The provisions of the Act are intended to be a complete code but contain much less specific requirements than the rules of Court. As a result, the arbitral rules create fewer impediments than some of the rules of court to the use of technology, in particular electronic communication.

It is also the case, however, that nothing in the new rules specifically embraces, provides for or requires new forms of technology or communication.

It is important to bear in mind throughout that most of the arbitral rules are subject to the parties' agreement to the contrary.

Start of arbitration procedure

Arbitration is a consensual process in the sense that a parties cannot be compelled to arbitrate a dispute unless they have previously agreed to do so. Arbitrations are commenced by a request to arbitrate a dispute.

There is no requirement for an arbitration agreement to be in writing. Oral agreements are generally enforceable, the main exception relating to consumers (against whom they are not enforceable without writing and a signature). Difficulties can arise, however, if one has to enforce overseas an award based upon an oral arbitration agreement. Agreement via electronic means is not prohibited generally and issues relating to agreement would be approached on normal contractual principles.

The rules provide that an arbitration process commences on the date on which a request for the dispute to be arbitrated is received by the respondent. The rules do not require the request to be in writing or specify a mode of communication or delivery. However, the rules contain deeming provisions in respect of the receipt of written communications, the advantage of which would be lost if actual physical delivery of a document to a person or place did not occur.

The result is that, while there is no express legal impediment to the use of electronic communication, arbitration agreements do not usually expressly allow for it or provide for its use and its use would be unusual and incur risks which could be avoided by the use of the physical delivery of hard copy documents.

Exchange of information and documents between the parties and arbitrators

While the rules provide for the submission of statements of claim and defence, no form or means of delivery is specified. The usual practice, for reasons of proof and avoidance of unnecessary risk, is physical delivery of hard copy documents. Electronic submission of these and other documents is not contrary to the rules.

It should also be borne in mind that there is no absolute requirement for an oral hearing. Conceivably (with the possible exception of the delivery of the award) an arbitrator could conduct an arbitration entirely by electronic communication, receiving documents, other evidence and submissions in that form and delivering the award electronically.

Discovery

Arbitration agreements may provide for discovery to be given and, in domestic arbitrations, the arbitrator has a power to order discovery (unless the parties agree otherwise). There is a lack of specific rules of form and means of delivery compared to the equivalent court rules of procedure. Unless it would be unreasonable or oppressive to order it, there is no reason why an arbitrator could not direct that discovery be effected using electronic communication.

Witness examination

There is no requirement for a record or transcript to be taken of any aspect of the hearing, including oral evidence given. If a transcript is made, it is carried out by the agreement of the parties or at the direction of the arbitrator. Transcription services, in common with the engagement of the arbitrator and arrangement of premises, must be organised by the parties and their cost is part of the arbitration hearing costs.

As all services and facilities must be arranged and paid for by the parties, the use of sophisticated or expensive forms of technology are dependant on the experience of those involved and the cost/benefit.

Document imaging systems with screens for all participants and real time on-line transcription have been utilised by the parties in a very small number of lengthy and complex arbitrations. Evidence by means of videolink is also used on a case by case basis and the ready availability of such facilities, either within corporate parties to the arbitration or through Telecom, means that the cost and organisational impediments are not significant and their use can be expected to increase.

Arbitral award

Awards are required to be in writing and signed by the arbitrator. Arguably, this rule creates an impediment to the electronic delivery of an award.

Access to record and documents

There are no specific rules. As the arbitrator is engaged by the parties to determine the dispute and the services are arranged by them, difficulties in gaining access to the record and documents would not be expected.

Access to database of pending cases and awards

Arbitration in New Zealand is private and confidential. There is no centralised arbitral system. For both reasons, there is no means of obtaining access either to information on pending cases or to awards.

Differences between small and large cases

The rules of arbitration do not vary according to the size of the case. As the use of technology is dependant upon arrangements made, and at a cost borne, by the parties, the complexity and value of the dispute obviously has a direct impact on the utilisation of sophisticated and expensive technology in the arbitral process.

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Document Management Systems

Court

As indicated in the preceding section, computerised document management is not used by the courts in New Zealand. The filing of documents is entered on paper records and they are subsequently managed by being held on a physical file.

As a result of the use of a document database by the parties to an action, instances have occurred where the trial judge was provided with a database of the trial documents to assist with location of documents. This is a practical necessity in cases where imaged documents are used by the trial participants. Such use is exceptional and depends upon the parties choosing to utilise the application and make the necessary arrangements with the court.

Law firms

The use of computerised document management systems to manage and retrieve documents created by a firm and held on a central server is common, especially in the larger firms with numerous authors and a substantial number of documents to manage. Document management of this kind (managing the firm's own output) does not impact directly on the dispute resolution process. It would not be the case that all or even most firms would use a specialised document management application.

Another potential use of document management would be the maintaining of virtual files in which all documents utilised by the lawyers (whether created or received) are held electronically and accessed by screen. It requires the storage or conversion of all incoming communications in digital form. I am not aware of any New Zealand law firm which has abandoned paper files in favour of the electronic file.

The principal use of document management systems within the dispute resolution process involves management of documents relevant to a dispute, including documents received from one's client and those obtained from other sources, including from other parties on discovery.

Many New Zealand law firms have document database applications for litigation available although the extent of their use is variable. Although production of discovery lists by database is not uncommon, especially where substantial volumes of documents are involved, it is rare for the discovery process between the parties to be directly affected by that. Provision of discovery in a form which endeavours to leverage mutual benefits from the use of such databases is a matter for co-operation between practitioners and, although I went close to achieving this in one case, I am unaware of any instances actually occurring. This is an area where co-operation concerning the means of delivering information could result in substantial cost savings to all parties.

The consequence is that document database use is mainly private and behind the scenes. Document databases are used variably to locate and analyse documents, brief witnesses, and prepare trial bundles, evidence and submissions. It is difficult to know the extent to which document databases are actually utilised by New Zealand litigators, even if they are created for discovery purposes. Knowledge and skill levels will have a substantial effect on the achieved benefits.

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Off-Site Professional and Paralegal Services

With the exception of the bar, the use of such services is not well established in New Zealand. The largest firms, who would have the greatest potential need for such services, have tended to maintain litigation resources in-house.

The profile of the New Zealand profession is that there are a relatively small number of large firms and that other firms tend to be quite dramatically smaller in size, dominated by sole practitioners and partnerships of two or three. Firms tend to be either very large or very small and, particularly in the larger cities, there are not a large number of medium-sized firms.

In the area of off-site professional services, a significant development has been the very substantial growth of the separate bar (barristers sole) within a profession which is fused (admitting lawyers as both barristers and solicitors). The growth of the bar has resulted in the movement of litigators from firms to sole practise as barristers. While such movements have been from firms of all sizes, the effect has undoubtedly been to reduce (or eliminate) litigation capacity with small and medium firms, with the result that much litigation work is done off-site by the engagement of a barrister. As a consequence of this development (and experience and training, as most barristers originally practised in firms), New Zealand barristers typically assume a much greater responsibility for the conduct of the litigation process than is the case in jurisdictions where there are separate professions. The growth of the bar has diminished rather than increased the number of litigation solicitors. Of course, barristers are also engaged by the larger firms as required. In such cases their role is likely to be as senior counsel with litigation lawyers in the firm performing the dual role of litigation solicitors and junior counsel. Many of the larger firms have very experienced advocates within the firm, reducing the need, in many cases, to engage a barrister even in a senior role.

This profile of the New Zealand profession may well account for the absence of external specialist paralegal services. The cases which involve the need for significant resources usually go to a relatively small number of very large firms who typically provide the necessary resources from within, sometimes by hiring additional legal or clerical resources on an individual basis as required. Existing practice is no doubt an impediment to establishing a permanent external service as it would be unclear, without a prior commitment from some of the larger firms, where a sustainable volume of work would come from.

One exception to the foregoing has been the provision of document imaging services for litigation. Document imaging has been used very infrequently and only in cases where substantial volumes of documents have been involved. In those cases, an external specialist imaging firm has been engaged to handle the process on a non-exclusive basis. The firm concerned typically has worked with all participants in constructing and maintaining the document image database and viewing system.

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Advertising And Ethical Codes Of Practice

Legal practitioners in New Zealand are permitted to advertise but advertising is the subject of specific ethical rules. Generally speaking, the principal requirement is that the advertisement be "consistent with the maintenance of proper professional standards". Advertisements must not be misleading or untruthful. Comparative advertising is regarded as unprofessional denigration of fellow practitioners (whether named or not). Barristers sole must make it clear that they can be instructed only through a solicitor.

The rules also forbid questionable claims to specialist knowledge or expertise, and the use of references to clients or their affairs without express consent.

Rule 4.03 provides:

In offering services direct to members of the public other than by normal advertising channels, a practitioner must ensure that approaches to persons who are not existing clients, are made in a manner which does not bring the profession into disrepute. Approaches must be made in accordance with proper professional standards and not in any way that is intrusive, offensive, or inappropriate.

The establishment and maintenance of home pages on the Internet is now a well-established means of promoting legal services in New Zealand. Virtually all of the large firms and many small firms have such pages. They are not regarded as offending against rule 4.03 and may well now be regarded as "normal advertising channels".

I am unaware of the use of banner advertisements by law firms on other (high traffic) web pages on the Internet but I would be surprised if such advertising were regarded as in breach of the rule.

Unsolicited email (popularly known in internet circles as "spam") is another matter. Internet email enables a single text message to be sent cheaply and instantaneously to a large number of recipients. Such unsolicited use by commercial parties, however, is generally regarded as a form of misuse of the Internet and resented (to various degrees) by recipients. Although no instance has been reported, and no complaint considered, I would expect that "spamming" by law firms would be regarded as "intrusive, offensive or inappropriate" and in breach of rule 4.03.

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