A global financial institution with headquarters in London and New York, conducts banking operations throughout Southeast Asia. The financial institution requires the resolution of commercial banking disputes in a “familiar” common law system of courts. It chooses to operate in the two major Asian financial centers of Singapore and Hong Kong. The financial institution’s internal compliance team wishes to ensure that it is in a state of readiness to comply with e-disclosure obligations in these two jurisdictions.
Disclosure Obligations in Singapore
The rules and practice of the Supreme Court of the Republic of Singapore are derived from those that traditionally governed civil procedure in the Courts of England and Wales. Discovery has traditionally been based on the former Order 24 of the former Rules of the Supreme Court in England and Wales.
Singapore was the first common law jurisdiction in Southeast Asia to introduce formal procedures for the disclosure of electronic documents, by way of Practice Direction 3 of 2009 (PD3). PD3 provided for an “opt-in” framework under which parties could agree, or the Supreme Court could order—on application by a party or of its own motion—that discovery, inspection and production of electronic copies of electronically stored documents take place in a proportionate and economical manner, based on a “reasonable search” for classes of electronic documents identified by search terms or phrases, limited by storage locations, media or devices and time periods. Limits were placed on recovery of data that is not reasonably accessible, and a suggested e-discovery protocol was prescribed.
Some two and a half years after PD3 was introduced, changes were implemented to the Supreme Court’s Practice Directions by Amendment No. 1 of 2012. This followed a review of the discovery process and took into account feedback from a public consultation exercise and the relevant stakeholders, with the aim of streamlining the e-discovery procedures. The Court’s interpretations of PD3 in a number of cases were also formalized.
The status of the Practice Direction on discovery was changed from an “opt-in” framework to one that the Court can apply whenever appropriate, without consent of the parties, particularly in relation to certain categories of cases listed in the Practice Direction. The amendments place even greater emphasis on proportionate and economical e-discovery. Examples include provision of greater flexibility by conducting searching and discovery in stages and using sample searches to generate more efficient search terms. Exchanges of checklists are also encouraged.
Disclosure Obligations in Hong Kong
Under the principle of “One Country, Two Systems,” Hong Kong operates as an autonomous Special Administrative Region (SAR) of the People’s Republic of China. The Hong Kong legal system, including its rules of court, are based on English common law. The High Court Rules were significantly changed in 2009, to implement Civil Justice Reforms that adopt some of the Civil Procedure Reforms introduced in England after 1999, principally a set of “Underlying Objectives” which include cost-effectiveness, expedition, fairness and a sense of reasonable proportion and procedural economy in the conduct of proceedings.
While Order 24 on discovery was amended to permit the High Court to replace traditional broad discovery with a more limited regime, to be tailored by the Court to requirements of each case so as to further the “Underlying Objectives,” these powers were not accompanied by any formal procedures relating to electronic disclosure. In the absence of a specific regime, the Court has not yet been asked to adjudicate on contested e-discovery applications under the Civil Justice Reforms.
In September 2013, the Hong Kong Judiciary revealed that it is actively engaged in creating a pilot scheme for discovery and inspection of electronically stored documents in the Commercial List. The pilot scheme is expected to be implemented by way of a Practice Direction (PD) to be issued in the first quarter of 2014. Preparation of the PD is presently a work in progress. The judiciary expects to release a draft of the PD for consultation in the final quarter of 2013, at which time it will hear views from the wider legal profession and other concerned stakeholders on the proposals contained in the consultation draft of the PD.
Financial institutions and other corporations submitting to the jurisdiction of the courts in Hong Kong and Singapore can be confident in their expectations of encountering robust judicial systems in the English common law tradition, which have gradually introduced rules aimed at achieving greater cost-efficiency and procedural economy. Keeping the costs of search and disclosure within reasonable limits is critical to these objectives.
Litigants who implement reasonable information governance systems that cater for the preservation and identification of documents that may be responsive to potential litigation should not have any difficulty in meeting the requirements of the Practice Direction on e-discovery in Singapore and those to be shortly introduced in Hong Kong. They may also rely on these rules to ensure that opposing parties provide reasonable disclosure of electronic documents relevant to litigation in these courts.