Changes to ASIC’s production guidelines – ASIC’s new expectations for entities producing documents

On March 2, 2020 ASIC released a new document production protocol for entities to follow when producing documents voluntarily or in response to a statutory notice. The changes are designed to clarify and standardise the way people respond to ASIC’s requests or notices compelling production of documents. While we have seen variations of these guidelines as necessary over the last 12-18 months, these new guidelines are the most extensive yet.

At Mackay Lawyers & Advisors we believe it’s crucial to have an awareness of this new protocol and how it may impact you.

Who do the new guidelines apply to?

People or organisations who will produce books to ASIC, either in response to a notice to produce documents or voluntarily (where ASIC has requested the voluntary production of documents), in hardcopy and electronic form.

The guidelines outline ASIC’s preferred production methods for production of electronic and hardcopy books, and address review methodologies and production specifications relating to the use of litigation support systems. They are divided into two major parts, based on documents produced through a litigation support system and those that are not.

What are the key takeaways?

• Failing to follow ASIC’s guidelines may result in ASIC asking you to produce the documents again, or ASIC processing the documents in accordance with the guidelines and subsequently seeking to recover their costs of doing so from you;
• ASIC suggests that the first point of call for any questions regarding a notice, including its scope, the meaning of certain terms, and the way documents will be produced, should be the ASIC officer named in the notice. One of the purposes of this call can be to clarify the scope of the notice. We strongly recommend getting expert legal advice on the technical validity and scope of the notice from a specialist in ASIC notices before entering into such discussions. But armed with that advice, these discussions can be beneficial;
• ASIC considers recipients should ‘carefully document’ their review methodology (such as how whether the review was conducted manually, using keyword searches, or in some other way, the approach they took, and any decisions that were made about the review ). ASIC has suggested that pursuant to s 37(9) of the ASIC Act 2001, they may compel entities to explain their review. It appears ASIC considers this power applies equally to those who are compelled to produce documents, and those who have voluntarily produced them.
• Where the notice requests electronic documents, they should be produced in their native format (such as .msg, .docx or .xlsx files), including any metadata. If there are problems producing documents in their native format, they must be produced ‘in a way ASIC is able to interpret or understand’. If producing documents from your system proves difficult, you should contact ASIC to discuss those difficulties and how the documents can be produced;
• Practically speaking, you should provide all documents produced in response to a notice behind a single covering letter and on the same storage medium.
• Documents that form part of a group, such as an email and its attachments, or documents referring to part of a database, may be required to be produced together. This will depend on the scope of the notice;
• You should only produce a hard-copy document if the notice specifically asks for it. Otherwise, a good quality, text searchable .pdf scan of the document should be produced;
• You can object to producing documents falling within the scope of a notice to produce on the basis they are privileged, however ASIC does not have accept your claim. In fact, ASIC will not accept a ‘blanket claim’ that everything covered by the notice is privileged;

Litigation support system or not

For those who are not using a litigation support system, the new guidelines indicate that ASIC is willing to take a practical and open approach to the production of documents based on the above.

For those who have implemented a litigation support system to manage their documents, the new guidelines provide extensive, detailed information about ASIC’s requirements for document naming conventions, metadata fields and the consequences of not complying with ASIC’s new requirements. These are best interpreted by a lawyer or an e-discovery expert experienced with such systems and protocols. This informative article from Jonathon Prideaux and Roman Barbera, from Korda Mentha, gives e-discovery insight. Worth noting is that:

• De-duplication, a standard part of the litigation support system methodology, is allowed under the guidelines unless the notice states otherwise;
• The provision of metadata has been extended to mean that all metadata relating to the document must be produced. This includes:

• where the documents extracted are from a document management system, metadata from a document management system.
• ‘where available’, metadata for all duplicates not being produced (while de-duplication is allowed, ASIC expects metadata for excluded duplicate documents);
• ASIC requires data that identifies the numerical category the document responds to. While there is an argument that this information is part of a lawyer’s work product and therefore privileged, ASIC may avoid this by issuing a separate notice for each category.

You can access a copy of ASIC’s new guidelines here.

Conclusion

ASIC’s new guidelines indicate a practical approach to producing documents which allows for negotiation between the recipient of the notice and ASIC as to the timing, scope and terms of the notice.

As ASIC’s notices are legal instruments, recipients should always consult an expert lawyer to assist you to determine the validity of the notice, its scope, and your obligations.

Should you receive an ASIC notice or request for voluntary disclosure, get in touch today on +61 3 8596 8196.

Note that the above is not legal advice and does not take into account your personal circumstances. It is general information only.

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