Part I: Q&A with Dave Sannar on E-Discovery Trends in Asia

[This is the first of a two-part Q&A between Dave Sannar, Catalyst’s head of Asia operations, and Rachel Teisch, Catalyst’s director of product marketing. Part I discusses trends in Asia discovery. Part II focuses on tactical considerations for collecting, processing, reviewing and transferring data subject to litigation, investigations and regulatory compliance.]

Q: What’s your role at Catalyst, and why did you join?

A: I head Catalyst’s Asia operations. I’ve been in the e-discovery industry for a while, and had experienced first-hand the unique challenges that Asian companies, particularly in Japan, face with respect to litigation and investigations. I was intrigued by the technology Catalyst develops and provides to solve Asian language challenges, along with the company’s on-the-ground experience and presence in Asia—specifically with Japanese companies. When the opportunity arose to join the company, I was thrilled.

Q: Where do you see the most growth in the e-discovery market? What’s driving it?

A: There’s still a lot of growth in the United States and we’ve seen an uptick in other regions in recent years. There’s been a lot of focus on the UK and Europe, especially with the GDPR. Growth has been historically slower in Asia, but it’s actually the fastest growing market for e-discovery right now. There are a few reasons for that. One is obviously globalization. A lot of companies are either based in Asia or have major operations there, and with that growth we’re seeing an uptick in litigation in the region. There’s also a huge wave of merger and acquisition activity happening, particularly involving Japan, since they’re often viewed as the economic bridge to Asia.

The U.S. and other countries’ regulatory agencies are also taking a more active role in the region. We are seeing more governments begin to investigate inappropriate behavior by companies, resulting in fines and other legal action. Quite often we see the governments in Asian countries actively cooperating and coordinating with their counterparts in the United States and EU to investigate questionable activities of multinational corporations.

We are also seeing a significant increase in voluntary compliance investigations using e-discovery protocols. Although the reasons vary, there have been a series of high-profile admissions of inappropriate activity by large multinational corporations in the last few years, from Volkswagen to Toshiba. This seems to have fueled a wave of self-investigations.

Finally, Asia is catching up to the EU’s data privacy rules, and as litigation and investigations increase in Asian countries, there’s a greater need to abide by the local regulations and customs as they comply with U.S. legal obligations. Last May, for example, Japan amended its Act on the Protection of Personal Information, known as the APPI, which is one of Asia’s oldest data protection laws. There were a series of high-profile breaches in 2015, including unlawful sales of personal data, which led to the amendments. The most important part of it is the creation of a centralized data protection authority for enforcing privacy laws. All these factors are converging and leading to e-discovery growth in Asia.

Q: In addition to different data privacy regimes, what are the differences in Asian nation legal systems that can complicate U.S. discovery efforts?

Many Asian countries, including Hong Kong, Malaysia and Singapore, have a common law framework that looks similar to the system in the U.S. For example, Hong Kong has Practice Direction SL 1.2, the “Pilot Scheme for Discovery and Provision of Electronically Stored Documents in Cases in the Commercial List.” This practice direction provides “a framework for reasonable, proportionate and economical” e-discovery in commercial cases involving 10,000 or more documents with claims valued at HK $8 million (about US $1 million) or more. Parties can either voluntarily agree to follow the Practice Direction, or courts can direct parties to adhere to it.

Other Asian countries have a civil law legal framework. That means companies in those countries, along with their management and even their outside law firms, may not be familiar with the concept of sharing or exchanging documents in discovery. In fact, in some countries, the parties exchange few, if any, documents before trial.

Take Japan, for example. Only a limited amount of discovery happens, and it’s only during trial when judges may direct discovery to obtain specific information during the case. That’s a stark contrast to what U.S. legal teams are used to, that is, exchanging all potentially documents relevant to the issues beforehand.

Q: What changes do you see on the horizon for litigation and investigations in Asia?

There are a number of changes. First, Asian companies are slowly becoming more sophisticated about discovery. In Japan, litigation is seen as a source of embarrassment and historically many companies have been reluctant to proactively pursue any litigation. In Korea, companies are beginning to realize they can use litigation as a business strategy, similar to how many western companies use litigation. China is also figuring out how to handle western litigation.

Second, it’s now a common expectation that regardless of where they call home, companies that are forced into litigation or investigations want to keep their legal and discovery costs low. That’s a core tenet of Catalyst’s approach, regardless of where our client is geographically located.

Third, a lot of the recent changes in e-discovery are driven by multinational corporations who deal with litigation and investigations as they conduct business in the United States and EU. As litigation and investigation increase in Asia, we will see greater influence from Asian nations on the developing changes to e-discovery protocols, expectations and laws, particularly in how data privacy issues and cross border data transfers are handled.

As such, it’s important that U.S. legal teams understand local customs and laws that affect data handling and by extension, e-discovery in Asia. In the next Q&A, I’ll discuss some of things that are necessary to help U.S. legal teams be sensitive so that they can provide proper support and advice to their Asian clients.

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About David Sannar

A veteran e-discovery executive with extensive experience in Asia and the Pacific, Dave Sannar is responsible for all Catalyst operations and business growth throughout Japan and Asia, including our operations and data center in Tokyo. Dave has been immersed in the e-discovery industry since 2004, when he became president and COO of AccessData Corp., the second-largest computer forensics software company in the world. Dave spearheaded a restructuring of AccessData that grew its workforce by 200 percent and its sales revenues from $4.2 million to over $10 million in just two years.

About Rachel

Rachel brings 18 years’ experience in e-discovery technology and services. As director of product marketing, Rachel is responsible for marketing strategy, planning and execution. From 2011 to 2017, Rachel was vice president, marketing with Conduent (formerly Xerox), where she led marketing efforts for the company’s e-discovery division and helped build the big data analytics and compliance offerings. Previously, she held senior marketing and strategy positions with H5. Earlier in her career, she co-founded Navigant Consulting's business development division, helping lead its growth to a $50 million top-line revenue practice. She first got her feet wet in e-discovery at CaseCentral (acquired by Guidance Software, now OpenText). Rachel regularly writes on topics related to e-discovery and bit data analytics, and holds a B.A. from Brown University and a Masters in Public Policy from Harvard University.