Proactive discovery, broadly defined, is any review of materials undertaken prior to receiving a formal document request or subpoena.While the term may encompass several practices, such as internal investigations, it generally refers to a ongoing practice designed to eliminate irrelevant documents while classifying and analyzing documents of potential importance to future proceedings. The practice has been a core function in the legal departments of many American companies for several years. Japanese companies generally have less incentive to initiate such programs given the lack of formal discovery obligations in Japan's legal system, however, the unprecedented level of investigations and lawsuits against Japanese corporate defendants in recent years has caused some companies to reconsider the value of proactive measures. Several U.S. subsidiaries of Japanese companies have already adopted proactive discovery programs, most notably, Honda Motor Company of North America.
The principle aim of proactive discovery is to drastically reduce the volume of materials subject to review in a potential lawsuit or investigation, while actively gauging the companies vulnerabilities to such actions. Naturally such programs complement existing compliance and information management efforts, but proactive discovery advances beyond mere data deletion and classification. Proactive discovery also yields tremendous benefits for when litigation ultimately arises. Irrelevant data can be purged before costly legal holds are activated. Legal departments can more effectively and confidently distinguish between relevant and irrelevant materials, foregoing the need for over-inclusive document collections and costly manual review. Companies develop the internal capacity to review and produce materials unilaterally, generating significant savings while minimizing the risks of exporting data to third parties. Most importantly, proactive discovery offers greater visibility for in-house counsel to identify and redress problems quickly.
Proactive discovery programs accompany some degree of risk and must be devised and implemented with the utmost attention and caution. Review efforts must be documented and data collection must be handled in a forensically sound manner. Internal document productions should strictly adhere to the form and format agreed to with opposing counsel. In-House Advisory Group can assist is developing and managing an efficient, accurate, and defensible proactive discovery program to drastically reduce litigation expenses while providing clients with greater visibility and control over their data.