The High Court has approved the use of predictive coding in e-disclosure, for what is believed to be the first time in this jurisdiction.
Ruling in a case involving 3.1m documents, Master Matthews described predictive coding as a review “undertaken by a proprietary computer software rather than human beings”.
He went on: “The software analyses documents and ‘scores’ them for relevance to the issues in the case. This technology saves time and reduces costs.
“Moreover, unlike with human review, the cost does not increase at the same rate as the number of documents to be reviewed increases. So doubling the number of documents does not double the cost.”
The High Court heard in Pyrrho Investments and others v MWB Property and others  EWHC 256 (Ch), yet to be published, that two claimant companies sued four directors and a property company in respect of payments allegedly made as a result of breach of fiduciary duty.
Master Matthews cited 10 factors in favour of the use of predictive coding.
He said that experience in other jurisdictions, although “limited”, had shown that predictive coding could be useful in appropriate cases.
“There is no evidence to show that the use of predictive coding software leads to less accurate disclosure being given than, say, manual review alone or keyword searches and manual review combined”.
The Master said there was some evidence from US and Irish cases to the contrary.
He went on: “Moreover, there will be greater consistency in using the computer to apply the approach of a senior lawyer towards the initial sample (as refined) to the whole document set, than in using dozens, perhaps hundreds of lower-grade fee-earners, each seeking independently to apply the relevant criteria in relation to individual documents.”
“There is nothing in the CPR or Practice Directions to prohibit the use of such software.
“The number of electronic documents which must be considered for relevance and possible disclosure in the present case is huge, over 3m. The cost of manually searching these documents would be enormous, amounting to several million pounds at least.”
Master Matthews said that, in his opinion, “full manual review” of each document would be “unreasonable” under the Practice Directions, “at least where a suitable automated alternative exists at lower cost”.
He said the estimates given for the use of predictive coding in the case ranged from almost £182,000 plus monthly hosting costs of £15,700 to £469,000 plus monthly costs of almost £21,000, which was “obviously far less expensive than the full manual alternative”.
The Master said that, bearing in mind that the value of claims in the case was “tens of millions of pounds”, the estimated costs of using predictive coding software were proportionate.
“The trial in the present case is not until June 2017, so there would be plenty of time to consider other disclosure methods if for any reason the predictive software route turned out to be unsatisfactory.
“The parties have agreed on the use of the software, and also how to use it, subject only to approval of the court.”
Since there were “no factors of any weight pointing in the opposite direction”, the Master concluded that the case was suitable for the use of the software, although “whether it would be right for approval to be given in other cases will, of course, depend on the particular circumstances”.
A spokesman for Taylor Wessing, which acted for the fourth defendant, said he hoped that “we have seen the birth of a new standard order that will be used in all cases where directions for the use of predictive coding are appropriate”.