I know that at election time, we, the voters, are supposed to ask the difficult questions and receive the collective wisdom of our political masters, even if it bears little resemblance to the policies they then pursue once the ballots have been safely counted.

With a deficit of around £160 billion, you would imagine that the odd £80 billion would come in handy. By almost halving the deficit it would, in fact, help Chancellor Darling or Chancellor Osborne or even Chancellor Cable ( surely some mistake here) to achieve at a stroke what the present Government has said it wants to do over the next 4 years.

It sounds too good to be true, and like everything which sounds too good to be true, it is!

The figure of £80 billion is the figure commonly bandied around by the cognoscenti who are thinking about the cost of replacement of our Trident nuclear missile capability. Being no military expert, I am led to believe that this is not in fact the cost of replacement but the overall lifetime cost presumably spread over the next 10 to 15 years but even so the annual amount would come in handy!

I was prompted to think about Trident by a trenchant article in The Times  [Money spent on Trident can’t go on troops, 21st April, 2010] written by four eminent former commanders. Field Marshal Lord Bramall, General Lord Ramsbotham, General Sir Hugh Beach and Major-General Patrick Cordingley asked whether the nuclear deterrent was good value for money.

You can read the article for yourself but it was not so much the arguments nor the conclusion reached by the authors which intrigued me but the process by which they evaluated the problem and the various solutions.

Firstly there is the financial aspect of potential replacement. At a time of straitened economic circumstances, with a black hole of some £35 billion in the defence equipment budget, it is difficult to see how anyone can be thinking of replacing Trident at £80 billion or any sum in the same stratosphere. (Incidentally, had the deficit run up by Messrs Brown & Co been incurred by directors of a public company, whom this Government loves to hate, they would have surely lost their jobs and/or resigned before they were pushed and would now be expecting criminal and fraud charges to be brought against them).

At the very least, the long term consequences for the military and the equipment budget need to be examined.

Secondly, there is the growing international consensus around cuts in nuclear and other defence spending as evidenced by the recent Obama-Medvedev meeting to sign a treaty bringing about some multilateral disarmament.

Thirdly, is it sensible to spend large sums of money on replacing a defence system with something so eye wateringly expensive that even this Government might baulk at the cost? God knows they have thrown money in staggering amounts at almost every other project imaginable. Not only that, but the relevance of such a system to warfare in the modern world is questionable. What may have been essential in the 1980s and 1990s may look out of place in 2010 to 2030.

Fourthly, the effect of spending that money has to be considered. What will be the effect on the finances of our nearly bankrupt country and on future “normal” spending on our troops who appear in recent conflicts to have lacked such basics as good boots, flak jackets and other basic kit to protect them as much as possible in the field?

Fifthly, what would the effect be on international disarmament negotiations if we were committed to renewing Trident? As the former head of the International Atomic Energy Authority, Mohamed El Baradei, put it: “It is very hard to preach the virtues of non-smoking when you have a cigarette dangling from your lips and you are about to buy a new pack”.

The Generals called for a full and proper evaluation of all the options and urged all political parties to allow a full and open debate about Trident replacement as part of the forthcoming strategic defence review, from which the whole issue of Trident is currently (inexplicably) excluded.

As I have said, it is the process of it all rather than the arguments which intrigued me as I read the article, although the arguments are themselves fascinating. It set me thinking about the process which lawyers go through when evaluating the options in the electronic arena.

Often, the major issue, the elephant in the room as it is sometimes called, is excluded from the discussion, just as Trident appears to have been excluded from the defence review. People involved in e-disclosure often ignore the end game. What is the objective to be achieved? How much money is available for this process? How will spending that limited amount of money on e-disclosure impact on the costs throughout the rest of the case?

I am not sure that I can claim that it is an original statement but it seems clear that in many cases, the tyranny of the technology is that you do things because you can and not because it is appropriate (or indeed proportionate) to do so.

What is needed in each case, and I stress in each case because every case is different and there is NO one size fits all, is a thorough evaluation of the problem and the possible solutions so that clients and lawyers can come to an informed decision about what is best for them in that particular case after an expert consideration of the position armed with all the relevant facts. Without that, it is so much guesswork and often pure luck if the right conclusion is reached.

That cannot be sensible and almost certainly will involve spending too much money for a system which will not be fit for purpose. Could this be the result of the defence review to be conducted by whatever Government we have after May 6th? It is a possibility!

Governments, generals and those advising clients in the e-disclosure field all need to consider all the options from a position of knowledge if they are not to be sold a pup!

Debevoise & Plimpton had sued former client Candlewood for $6million in unpaid legal fees and found itself facing “an answer and counterclaim” seeking damages of $55million! [Ex-Debevoise Client Raises Nasty Counterclaims in Unpaid Bills Case, The American Lawyer, 14 January, 2010]

Apparently, some of Candlewood’s allegations against their former advisers were not too flattering which only goes to show that the publicity generated by this type of dispute is often publicity the law firm could well do without.

According to Candlewood’s counterclaim, D&P managed to bill for more than 15,000 hours or the equivalent of 10 lawyers working full time for the 10 month period in question, whereas Candlewood’s Delaware based lawyers successfully represented the company for two and a half years at a total cost of $450,000.

Could this happen in England?

It is possible but it would be as well to remember an interesting part of the judgement of His Honour Judge Simon Brown QC in Earles v Barclays Bank PLC . The case is often cited as an example of justified criticism by the judge of lawyers who fail to abide by the CPR, something he described as “gross incompetence.”

But it also shows that judges in this country are now very much aware of the need to manage costs and in that case, Judge Brown made a distinction between the costs charged in the City of London and the costs charged and recoverable in Birmingham.

If Earles is followed, it looks as if clients will only be faced with “Delaware” costs for “Delaware” type cases.

David took on Goliath in Earles! As the judge said at paragraph 80 of his judgment: “Here we have an impecunious bank customer facing the might of one of the country’s largest banks and a blue chip legal team to match when he has struggled to afford to have a highly competent but small firm from Stratford upon Avon to represent him just for trial”.

The judge allowed Birmingham rates and disallowed City of London rates.

If David did not actually slay Goliath, he gave him a very bloody nose!

The reason is the timely conjunction of market need, technical capacity and tumbling costs.

To illustrate how far e-discovery costs have fallen, we estimate that a large e-discovery project undertaken five years ago which took upwards of six months and cost more than £500,000 would today be completed within days and cost less than £10,000.

There are four key factors at work here – cost pressure from clients; increasing maturation of e-discovery technology; a judiciary increasingly aware of e-discovery and prepared to address costs; and competitive pressure as the more innovative law firms leverage the technology for competitive advantage.

A key benefit of these technical improvements and increased speed is that the latest e-discovery technology is available to any law firm of any size on any matter, at a price that will be proportionate to the claim. We are now at the point where it should  be normal practice to use e-discovery technology in relation to even relatively low value disputes. The question for those practitioners who have been slow to embrace the new paradigm is, “How much longer can you afford not to?”

Further reading:  e-Discovery in the Spotlight

The pictures at the top of the article showing a grim faced Dick Fuld, former Chief Executive, and one of the workers who lost her job that fateful day almost one year ago brought home what a momentous event the collapse of such a major investment bank actually was. The banks in the UK were deemed to be too big to fail and have been bailed out with huge amounts of taxpayers’ money but Lehman Brothers went under owing an eye watering $613 billion.

The thrust of the Sunday Times article was the bill to be incurred for sorting out the claims arising as a result of the bank’s collapse. Apparently, advisers liquidating its remains have already billed $500 million. It is said that Enron cost $725 million to unravel, currently the world record!

This figure is likely to be dwarfed if Tony Lomas is to be believed. He is the PwC partner   leading the UK liquidation and he has said that the costs could exceed a massive $4 billion once litigation costs are included.

The article reports that there are at present some 76 actions going on in courts around the world from Luxembourg to Germany to Japan with more to come as claims are notified, the deadline for which is in 3 weeks’ time, some 53 weeks after the bank filed for bankruptcy.

All these figures made me wonder how much was being spent on processing the paper and electronic documents involved. I would hazard a guess that it will be more than a drop in the ocean as lawyers and other advisers struggle to get to grips with the complexities of the arcane trading in which the traders at Lehman excelled in the good times.

For any advisers reading this, may I offer a few thoughts on how their job might be simplified? Unsurprisingly (since this blog is about Smart e-Discovery) I return to a favourite theme of mine -  the imperative to reduce the costs of discovery, as noted by the judge in the recent Multiplex/Cleveland Bridge judgement and referred to elsewhere in this blog [see: The Road from Wembley]

A few tens of thousands saved here and there on discovery costs, even if seemingly a small proportion of the billions involved overall, can have significant impact particularly if the cost of the advisers themselves can be reduced as fewer people need less time to understand the issues and litigate them.

I shan’t recite the Millnet mantra here but if you are curious about the scope for cost reduction in the e-Discovery process, take a look at our Introduction to Smart e-Discovery Services [PDF - 531KB]