March 25, 2008
Legal and technological developments are capable of generating both challenges and additional expense for businesses. Combine the two and, for some, the results could be overwhelming. Taking a proactive review of how your organisation handles its electronic documents, and ensuring that you have policies and procedures in place to plan for the risk of having to undertake an electronic disclosure exercise now, could pay significant dividends later.
As a result of the relentless growth of email and the proliferation of electronic documents in the business world, specific provisions have been introduced into the Civil Procedure Rules to deal with what is termed “Electronic Disclosure”, or e-disclosure. The definition of a document which has to be disclosed during any litigation includes:
“…electronic documents, including e-mail and other electronic communications, word processed documents and databases. In addition to documents that are readily accessible from computer systems and other electronic devices and media, the definition covers those documents that are stored on servers and back-up systems and electronic documents that have been ‘deleted’. It also extends to additional information stored and associated with electronic documents known as metadata.”
A reasonable search, as defined within the Rules, has to be made for these documents (in addition to traditional paper material) and each party has to certify precisely where it has searched. In relation to electronic material, the relevant part of the certificate which the parties are obliged to complete when they give disclosure refers expressly to:
“documents contained on or created by the Claimant’s/Defendant’s PCs/portable data storage media/databases/servers/back-up tapes/off-site storage/mobile phones/laptops/notebooks/handheld devices/PDA devices”
and
“documents contained on or created by the Claimant's/Defendant's mail files/document files/calendar files/spreadsheet files/graphic and presentation files/web-based applications”
Where to look?
Even a small project team can generate a mass of electronic documents. These will typically be created by various individuals and be scattered across a range of devices, often at different locations, and different computer programs. The vast majority of these documents will never be reduced to paper and, in the case of many companies, will be “filed” by the authors/recipients in their own ad hoc electronic filing systems.
If litigation ensues, long before the inevitable search for disclosable material has to be carried out, management will need to assemble all of the relevant material quickly to assess the claim to be made or defended. The days of being able to reach for a centrally held paper file are fast receding. Without proper procedures in place to manage electronic documents, identifying critical information on servers, PCs, laptops, PDAs and other storage devices (did you know that your staff may be carrying documents around on their MP3 players?) is a time consuming and disruptive task.
What to do?
Strategic planning is essential to avoid many of the problems which frequently arise when such an exercise has to be undertaken. If you have an IT team, you already have a skilled resource that can and should be well placed to ensure that you are prepared for the challenges of e-disclosure.
The key to dealing with electronic documents is knowing what you have and where it is kept. A document management policy which sets out rules for how and where documents are to be stored and backed up is vital. This will facilitate the timely coordination, identification, preservation and collection of electronic information before and during the disclosure process.
- The policy should be clear, readily understood and enforceable.
- It should also be regularly audited to ensure that it is complied with – a policy is only as good as its implementation.
- Once the policy is in place, ask your IT department to produce a chart of your system’s architecture which identifies the different types of data you create and work with, where it resides and how it flows between the system’s components and applications – this will act as a road map and highlight the starting point for searches.
An electronic document retention policy should also be put in place to govern how electronic documents are retained. This may be akin to your existing paper document retention policy, but it must give consideration to electronic document specific issues. For example, imagine the situation where a salesman, who has the use of a company laptop, leaves. The laptop’s hard drive is wiped on his departure and the machine is passed on to the new recruit. Hard copies of the salesman’s documents will survive his departure; any electronic documents which have not been backed up to a central server will not.
The policy must also deal with “litigation holds”. These should be put in place as soon as litigation is contemplated to ensure that the requirement to preserve disclosable material is complied with. Whilst the scope of your disclosure obligations are identified, technical staff should suspend the automatic deletion of backups and business people should be instructed not to delete potentially relevant material. If necessary, items of hardware should also be isolated to ensure that data is not inadvertently lost. The extent of the hold can be refined once the scope of disclosure becomes clearer. From an administrative point of view the imposition of a hold needs be clearly communicated and documented. It should also be auditable so that it can be defended at a later stage if need be. A body of case law in relation to sanctions imposed on those who do not comply with their disclosure obligations is developing in the US. These sanctions can be swingeing and it remains to be seen how the English courts will approach this area.
The issues generated by e-documents are not confined to litigation. If you operate in a regulated sector, it makes good sense when developing a document retention policy to take account of any standards your regulator might have, for example in relation to how any electronic documents have to be provided to it. A great deal of subsequent work and cost can be saved if you archive documents in that format and do not have to restore and convert them at a later date.
Faegre & Benson has a team of lawyers and together with a dedicated Client Technology Services Group with extensive experience of dealing with e-disclosure. For further information see www.faegre.com/firm_about_technology.aspx.
This article was first published in the September/October 2006 edition of The Commercial Litigation Journal