Brown v BCA Trading Ltd (2016)
Brown v BCA Trading Ltd  EWHC 1464 (Ch)" is an important England and Wales case management − in which the Companies Court allowed the use of predictive coding in an electronic disclosure process involving the contested party for the first time − for the underlying case of “unfair prejudice” petition based on section 994 of the Companies Act 2006. It is also the first reported judgment to endorse the landmark decision in "Pyrrho Investments Limited v MWB Property Limited"  EWHC 256 (Ch)," whereby the main difference is both parties have approved the  utilisation of predictive coding. The case shows a development in the field of Artificial Intelligence and Law in the United Kingdom. Facts. The petitioner, David Brown, had submitted a petition based on section 994 of the Companies Act 2006 (regarding company's member protection from unfair prejudice) against several respondents, which are BCA Trading Limited, Robert Feltham, and Tradeouts Limited. The case had been registered as a ten-day trial. He attempted to recover an amount of more than £20 million. In this case management hearing, the court (Mr Registrar Jones) were requested to settle the following issues: Judgment . The directions were given as follow: Commentary. Disclosure process in English litigation requires all parties to identify all documents related to the proceedings that they hold and provide them to the opposing party (save for some exclusion). Predictive coding, also known as a technology-assisted review (TAR), might assist this process. Predictive coding software requires a senior lawyer to assess several disclosure documents and then analyse the review, along with a couple of enhancement, producing an algorithm. Subsequently, the algorithm will be applied to the entire disclosure documents database to make numerous documents for lawyer's manual review. This process  is arguably more precise than a human (paralegals) review, and it reduces time and costs. This method is more suitable and proportionate to large-volume documents. One electronic disclosure provider in the United Kingdom, ‘Consilio’, recommends a minimum database of 50,000 documents to commercially reasonable for using the predictive coding. Nevertheless, a lesser number of documents may still use the software if desired. In the first direction of this judgement and "Pyrrho Investments Ltd v MWB Property Ltd," English courts finally legally accept this method due to the cost-saving element of the technology. The courts are also sceptical to  any concerns on its inaccuracies. People commonly concern on the possibility of losing control of the predictive coding work. However, the experts argue that people do not assign the “case-critical decisions” to computers entirely in the predictive coding mechanism. It is managed by human decision-making instead and gives a greater supervision of the work. The court in this judgement also emphasises the significance of collaboration between both parties to identify the issues and concentrate on the scope of review before conducting the disclosure process. Concentration on this matter at preliminary phase will save time and cost provided that  there are reasonable discussions conducted. Furthermore, this judgment also shows that the court may consider the opinion of the party possessing a large volume of documents – who bears the greater responsibility for the electronic disclosure process – in determining whether predictive coding may be employed or not. Also, the respondents’ solicitor on this case (Berwin Leighton Paisner LLP) shows that the cost-saving benefit will be gained by the larger firms owning in-house software rather than, the smaller firms using the external provider's services. Nevertheless, expert views that outsourced model of predictive coding may still be more efficient than  traditional manual review model. The practice has been initially developed in the United States, particularly in the case of "Da Silva Moore v Publicis Group" in 2012 and "Rio Tinto plc v Vale SA" in 2014 and also used in Ireland in the case of in "Irish Bank Resolution Corporation Ltd v Quinn" in 2015. Because the United States is the first one use the predictive coding, it is questionable whether English Courts’ electronic disclosure follow the United States’. Practitioners argue that there is a different justification in using predictive coding in the disclosure in both jurisdictions. The United States ’ disclosure puts the importance of the relevance and proportionality to the issues in the disputed case and claims size. On the other hand, the English Courts’ approach emphasises on the costs proportionality the most. Observing this new trend, some practitioners predict the development of the utilisation of predictive coding in English courts. As the court in this judgment has approved such use despite the existence of a contested party – there might be a case where the court directs the disclosing parties to use the predictive coding software against their wishes. When that situation occurs, experts believe that using predictive coding  in the electronic disclosure will be regarded as the standard rather than the exemption.