Pyrrho Investments Ltd v MWB Property Ltd & Ors

Predictive coding may be used for electronic disclosure where it is suitable for the particular case and consistent with the overriding objective. The court should assess the proposed methodology, including its safeguards, accuracy, transparency, proportionality and cost. A full manual review may be unreasonable where the electronic document set is very large and a suitable automated alternative is available at lower cost. The Civil Procedure Rules and Practice Directions do not prohibit predictive coding. Approval remains case-specific.

The claim concerned alleged breaches of fiduciary duty and related transactions involving the defendants. More than 17.6 million electronic files had initially been restored from backup tapes, later reduced to approximately 3.1 million by de-duplication.

The parties agreed, subject to court approval, that predictive coding should be used for the Second Claimant’s electronic disclosure. The central issue was whether that methodology was permissible and appropriate under the Civil Procedure Rules and applicable Practice Directions.

1. Application granted. The court approved predictive coding for the Second Claimant’s electronic disclosure. Approval in another case would depend on its particular circumstances.
2. Under Civil Procedure Rules 1998 Part 31 and Practice Direction B, the obligation was to make a reasonable search for disclosable documents. Relevant considerations included volume, complexity, accessibility, retrieval and disclosure costs, the likelihood of locating relevant data, possible alteration, availability from other sources and the significance of documents likely to be found.
3. The fundamental issue was the scope and quality of the search. A defective search would not be cured by later listing or production for inspection. The rules did not require human review alone and did not prohibit predictive coding, provided the methodology was reasonable and appropriately validated.
4. Predictive coding was suitable because the document set exceeded 3 million files, full manual review would be unreasonable and disproportionately costly, the proposed costs were proportionate to the value of the claims, the method offered consistency and safeguards, there was sufficient time before trial, and the parties had agreed the methodology.