eDiscovery Trends in 2024
TransPerfect Legal experts from across the globe sat down earlier this month to discuss the trends that will affect the eDiscovery industry (and all those who use the technology) in 2024. Stefan Nigam (UK), Tom Balmer (Australia) and Michael Deeker (Middle East) based their observations on work with corporate and law firm clients globally. Summarised below are the seven trends they believe will have a significant impact on the industry in 2024.
1. The Rise of Generative AI
Just a year ago, we predicted wider adoption of AI technology by legal professionals in eDiscovery exercises. What we didn’t expect was the scale of this adoption, and how much would be driven by the rise of generative AI.
While the spotlight on generative AI has intensified overnight, it has also accelerated the adoption of existing AI-powered tools such as Technology Assisted Review (TAR), which enables doc review at scale through predictive coding. These tried-and-tested solutions remain critically important as the legal industry learns how to navigate the generative AI landscape.
2023 was a year for experimenting with generative AI. Since the release of ChatGPT a little over a year ago, the potential of generative AI to fundamentally reshape eDiscovery processes has captured the minds of legal professionals globally. New generative AI use cases, products and services were developed at an unprecedented pace – while lawyers and technologists grappled in parallel with the risks of accuracy, bias, data security and reliability. Some early adopters experienced these risks first-hand as the New York courts saw multiple cases underpinned by fake case precedents generated by ChatGPT and Bard.
We believe 2024 will be the year of implementation. As the capabilities of these massive language models continue to rapidly expand, 2024 will be a pivotal year when both the promises and perils of generative AI become more apparent. Legal practitioners and regulators will dare to drive the efficiency of document disclosure and disclosure through generative AI solutions. Simultaneously, they will focus on safeguards like human verification of AI-generated outputs, detecting deepfakes and ensuring consistency when identical prompts produce different results.
2. Increased Regulatory Scrutiny and Compliance Burdens
Corporate organisations can expect heightened regulatory oversight globally in 2024. Against the backdrop of global headwinds and the cost-of-living crisis, regulators are flexing their muscles and ramping up enforcement.
For example, the last year has brought a resurgence of dawn raids and the use of information-gathering powers by global competition regulators concerned with consumer welfare. Several raids have evidenced international cooperation between enforcers, and it seems that more investigations are on the horizon.
In APAC, there are already signs that we will see a more aggressive Australian Securities and Investments Commission (ASIC) pursuing violations in high-risk sectors. In their view, the lull of the pandemic years obscured wrongdoing like supermarket price fixing, superannuation funds greenwashing, online platforms gamifying monetary investment and cryptocurrency misconduct that may now face increased scrutiny.
In the UK, multiple regulators, including the Financial Conduct Authority (FCA), Advertising Standards Authority (ASA) and the Competition and Markets Authority (CMA), are focussing their attention on ESG concerns such as greenwashing. The Serious Fraud Office’s (SFO) pre-investigative powers will be expanded beyond bribery and corruption cases, while the Treasury puts cryptocurrency and digital assets in its crosshairs. Across the UK and EU, new regulations are being introduced to monitor digital markets and AI.
In Saudi Arabia, the GAC are becoming more and more active with the influx of foreign investment. Price fixing and merger control are at the forefront of the GAC’s agenda. And with merger control rules in place for information gathering, international and local organisations should be looking at their infrastructure to avoid potential fines.
As scrutiny intensifies, global companies must bolster multinational regulatory compliance programmes and investigation preparedness. Technologies that help monitor evolving rules, conduct cross-border investigations efficiently and facilitate disclosure to regulatory bodies will be in high demand.
3. Rethinking Data Strategies for the Modern Legal Landscape
The explosion of modern data sources, including collaboration tools, chat applications and mobile devices, continues to challenge general counsels' ability to effectively prepare for evolving dispute and compliance demands. Skyrocketing communication volumes exponentially complicate the task of building one’s case – while the ability to meet disclosure obligations can depend on how organised a company’s data frameworks are.
To mitigate these risks, organisations must collaborate, both internally and with external advisors, to manage and extract key evidence from the myriad of new digital sources across global regions. While European disclosures come up against the challenges of modern attachments (e.g., links to multi-version files in shared data systems such as OneDrive), Asian disputes must understand best practices in working with evidence extracted from WeChat. Rethinking data management strategies through improved technologies and oversight is imperative to thrive within this complex legal and regulatory landscape.
Moreover, as the risk of cyberattacks increases and data privacy restrictions intensify worldwide, companies must urgently re-examine their information governance and data retention strategies. With regulators ramping up scrutiny of data stockpiling and protection capabilities, organisations risk penalties if unable to efficiently retrieve relevant evidence for disputes or incidents. Law firms managing valuable client data troves similarly face growing regulatory and reputational threats, as demonstrated by A&O’s ‘data incident’ and HWL Ebsworth’s 4TB breach (including highly sensitive government documents) in 2023.
4. The ESG Factor in Disputes and Technology Adoption
Environmental, social and governance (ESG) reporting requirements will dramatically increase for law firms, providers and companies alike in the coming years. Regulators have already started enforcing these standards more rigorously, and ESG-related litigation is expected to rise markedly worldwide.
As noted above, UK regulators are placing ‘greenwashing’ concerns in their sights as well as scrutinising overall ESG compliance.
Meanwhile, in Australia ASIC has confirmed it will continue its crackdown on greenwashing this year, with a focus on advertising claims made by investment and superannuation funds. In the first case of its kind, the regulator took Mercer Superannuation to court for allegedly misleading investors in the marketing of its ‘Sustainable Plus’ funds. Mercer paid $11.3M to settle the case.
These developments were top of mind at Australia Arbitration Week, where global attendees discussed new challenges around sustainability. Flying large legal teams for hearings is increasingly unfeasible, necessitating alternative technological solutions such as holograms, virtual reality headsets and further optimised online litigation protocols. The accelerated adoption of online hearings begun under pandemic conditions is likely permanent, changing evidentiary standards and expanding remote access to dispute resolution. Strategies around leveraging new technologies to validate ESG credentials will thus be crucial.
5. Rise in Global Disputes
The current uncertain economic outlook characterised by slowing growth, high inflation, looming recession and insolvencies threatens to drive up litigation rates globally as companies look to monetise their potential commercial claims. History serves as a guide, with the countercyclical nature of disputes driving an increase in litigation after the 2008 financial crisis. The current availability of litigation funding will only compound that trend.
In addition to commercial disputes, antitrust litigation, including collective redress, also represents a growing source of litigation. In Australia, class actions specifically concerning data privacy breaches and cybersecurity incidents have drawn heightened regulatory and public interest after large data breaches at Optus, Medibank and HWLE affected millions of individuals. The UK and Europe have likewise been experiencing a surge in recent years, with 121 total class actions filed in 2022, up from 55 in 2018. This trend will only continue as the rise in regulatory investigations, discussed above, confirms more corporate wrongdoing in the years to come.
Tools that facilitate digitised document processing and data-driven case assessment in a cost-efficient way will be paramount in navigating an era of heightened legal risk and tightened legal budgets.
6. Talent Shortages in Legal and eDiscovery
The eDiscovery sector faces acute talent shortages at a major time of growth, with vendor and law firm demand for eDiscovery, privacy and AI specialists outstripping supply. Meanwhile, law firms struggle to recruit and retain overworked lawyers seeking work-life balance.
One solution to this dilemma is to facilitate career changes from law to eDiscovery. Internal programmes in eDiscovery, information governance and associated technical skill sets can retrain lawyers interested in a technology career. This could develop dually-qualified candidates with legal and technological experience who can leverage technology to mitigate the talent shortfall, and service clients appropriately in the complex world of modern data challenges.
7. Developing Best Practices on Short Message Review and Disclosure
Short message formats like Slack, Teams and mobile messaging are increasingly frequent in disclosure requests from regulators and litigants alike. Whereas evidence was previously sought predominantly on computer hard drives and emails, enquiries now routinely capture a range of collaboration platforms and mobile devices.
However, the process of collecting, reviewing and disclosing these new file types is still in a state of flux – as new challenges are encountered and overcome with a variety of innovative, non-standard solutions. For example, the lack of context inherent in these short messages limits the application of TAR, machine translation is less effective on colloquial language frequently used in chat and it is not clear what is required for a ‘native’ submission of such files.
Amidst this uncertainty, 2023 saw several cases consider the questions of proportionality and efficacy in reviewing these documents as well as vendors developing innovative solutions to reoccurring problems. We predict that 2024 will see more courts and regulators globally establish their preferences and expectations for matters concerning these new file types.