Will the Proliferation of "ESI" be the Death of Construction Litigation?

While communication is a good thing, "too much" of anything can become harmful, or even toxic.  By way of example, construction was in many ways less complicated prior to common usage of cell phones, voice mail, computers, e-mail, text messages, and the internet.  Everything went much slower and took more time. Written communications were created using paper and typewriters.  Spoken communications were originated and accepted via land line.  Photographs were taken by a camera and carried to a “Fotomat” for development.  Business records were sorted, categorized, and then physically stored by a human in a “filing cabinet”. Wet ink signatures were the norm, not the exception.  Business was conducted during working hours.  When you went home at night, it was assumed you could not be found until your next workday.  Communicating was deliberate and thoughtful.  People had to plan how and what they wanted to communicate, because doing so was cumbersome, slow, and difficult.  In almost every way creating, sending, and storing communications prior to 1995 was a “pain in the butt”.  

Nowadays, communicating is far too quick and easy, often without forethought.  Communications are sent, received and stored “lightning fast”.  Cell phones, tablets, and computers replaced landlines and typewriters.  E-mails and text messages replaced letters.  Cell phones send and receive phone calls, voice messages, e-mails, instant messaging, and text message from anywhere at any time.  Photos, videos and voice recordings are created on the spot and immediately distributed or published. People send and receive communications all hours of the day, without regard to “business hours”. Expectations are all communications will be immediately answered or returned.  People constantly carry, gaze upon, and communicate using their cell phones.  Communications are created and sent on the spur of the moment without deliberate thought.  Everyone is exchanging communications at the speed of an ”Olympic ping pong match”.

All this speed and ease has resulted in a drastic increase in the volume of communications in the construction industry.  Making matters worse, each communications is automatically stored away in our devices as “electronically stored information” or ESI.  And each ESI communication comes with its own set of “metadata” reflecting its history, creation, and edits.  In the 1980’s a large, complex, multi-year construction project might involve as many as 100,000 physical records.  Similar projects now typically involve more than 10,000,000 ESI records – an increase of 1,000%.

This explosion of ESI has had a drastic impact upon construction litigation.  Most attorneys feel compelled to collect all ESI from every party and every available source, including cell phones, tablets, computers, and even the “cloud”.  While technology makes it easy to locate, collect and produce all of this ESI, once collected something must be done with it.  First, the collected ESI must be processed, sorted and segregated for privilege, relevancy  and non-responsiveness.  Next, a mirror image of each ESI record must be generated as a  “tag image file format” of TIFF that can be tagged to reflect the source of the ESI.  Finally, the ESI must be reviewed and analyzed to determine whether and to what extent it supports or refutes the various claims and defenses at dispute between the parties.  All of these steps have a cost, and all typically require the involvement, to one extent, or the other of third-party vendors.

The review and analysis phase is by far the most expensive and threatens the future of construction litigation.  In the 1980's the review and analysis process was combined and consisted of putting “eyes on” thousands of physical records by an attorney who was intimately familiar with the claims and defenses.  Although not cheap, the costs were reasonable.  In stark contrast, the review and analysis phase is now split in two.  It is impossible for attorneys  knowledgeable of the case to put "eyes on" millions of ESI records, and even if possible the costs would be prohibitive.  Instead, as many as 100 contract attorney’s put “eyes on” a fraction of the ESI produced and apply issue tags that categorize the documents into electronic "folders".  Meanwhile "artificial intelligence" or AI learns from the coding by humans and then takes over at some point and uses predictive coding to cull the remainder of the ESI records.  Only then do attorney’s intimately familiar with the claims and defenses begin to analyze this culled set.  Given the sheer volume of the ESI that is collected, it is impossible to put "eyes on” all records collected, much less ensure that all critical evidence has been collected.  Even using this streamlined methodology, clients spend hundreds of thousands in fees upon third party consultants in collecting, hosting, and culling ESI before substantive analysis even begins.

One methodology to reduce if not eliminate review time, is to contemporaneously issue code or tag all ESI at the time of creation or receipt.  Many contractors do something similar in the normal course of business but simply do not realize they are doing so.  For example, many contractors who use ProCore in administering projects, already create separate folders for each issue, claim, or possible dispute arising upon a project.  If all documents and e-mails are categorized in this manner throughout the project, all ESI will be categorized into "folders" by project personnel who are most familiar with the issues in dispute.  A best practice is to develop a template, customized for each project, and used to categorize and issue code ESI on a real time basis.  In this manner, "an ounce of prevention is worth a pound of cure".

As ESI continues to proliferate, litigators must develop new methods to control the costs of review, clients must take a more active role, and both must take advantage of emerging AI to locate and identify critical evidence.  Other wise construction litigation will go "the way of the dinosaur".