The case of Cabo Concepts Limited v MAG Entertainment UK Limited has sent shockwaves through the eDiscovery world (well at least in the UK!). In Cabo, the defendant and their lawyers were heavily criticised for their eDiscovery processes, and costs of close to £600,000 were awarded on an “indemnity” basis.

Cabo, a UK toy start up, claimed damages and declaratory relief against MGA for breaches of statutory duty, including abuse of a dominant position and unjustified threats of patent infringement proceedings, which was claimed to have caused Cabos’s business to fail.

In her decision handed down on 29 July 2022, Mrs Justice Joanna Smith awarded significant costs on an indemnity bases against MGA for various failures and errors in its eDiscovery processes.

Just three weeks before the trial was due to commence, MGA informed the court that they had missed circa 84,000 documents during the discovery process, although subsequent investigation suggests the real number was closer to 800,000 documents and that nearly half of all potentially relevant documents were not reviewed.

In her judgement, Mrs Justice Smith discusses some important concepts often used in the eDiscovery world, but which are ill defined, such as best practice, and what constitutes a reasonable and proportionate approach to eDiscovery.

Below we identify five key practical steps that can be learned from the case: 

1. Collect widely and only attempt to filter or cull documents after they have been loaded into an eDiscovery platform, which will give a full audit trail.
2. Use specialist eDiscovery software that is designed for the job. The defendants were criticised for using Microsoft software not designed for large scale searching, and also for not following Microsoft’s own guidance as to how conduct searches.
3. Follow up red flags, don’t park them. Double check batching and check all documents have been reviewed. Beware being fooled by numbers appearing to add up. And check and keep checking that known key documents in the case are included in the collection set and disclosure bundle.
4. Oversight is important. Lawyers cannot simply rely on their clients’ in house IT departments, they have to exercise some control.
5. Use eDiscovery expertise. If the law firm or end client does not have the requisite expertise, consider engaging an independent eDiscovery provider (like FORCYD).

About the author:

Robert Gradel leads FORCYD’s Document Review Services in the UK.

Robert has over 10 years’ experience in eDiscovery, assisting legal teams and corporates on complex document and data review projects, including matters related to banking finance, fraud, regulatory activities and commercial litigation.