By now almost everyone has read newspaper articles or heard news reports about the burgeoning responsibilities in electronic discovery (e-discovery). Depending on the size of your company and the extent of your electronic communications systems, the burden to produce e-discovery during litigation can be both time consuming and very expensive. And it can become more time consuming and expensive if you haven’t taken steps, once you are on notice of a claim, to preserve potential electronic evidence. So, rather than waiting until you are served with a lawsuit, it is a good idea to put some plans in place now. Document-retention policies simply are not enough.
Once an employer is on notice of a claim against it, the employer has a duty to preserve evidence (as well as an interest in preserving it). And an actual claim does not need to be filed for an employer to be under an obligation to act; rather, only notice of a claim is required. When it comes to electronic evidence, such as e-mails or other electronic documents, understanding how your company’s systems work and putting some processes in place will save you some effort and expense later.
Being prepared to engage in e-discovery also will protect you from claims that you have destroyed evidence (even if it was done inadvertently). Court cases in the past couple of years have made clear that the courts are willing to impose harsh penalties for failing to preserve electronic evidence. For example, the court could require a party to pay for the opposing party’s experts and/or attorneys in conducting discovery and trying to recover evidence that was thought to be destroyed or simply difficult to retrieve.
Penalties also can be much more severe. Courts have imposed discovery sanctions in the form of instructions to the jury that adverse inferences be drawn against the party who allowed the destruction of evidence. If that happens, a party can be prevented from presenting evidence relevant to some aspect of a claim. Courts also can impose default judgments against a party. Finally, criminal charges can be filed against a party based on handling of e-discovery.
It is best to have a cross-functional team look at the issue of e-discovery. The team should review all the electronic communications systems in place, how they work and store information, whether the systems are storing information that is no longer necessary, the ability to “search” the system and retrieve information, written policies on which electronic information must be stored, for how long and in what form, and processes to put in place in the event of litigation. Members of the team should include:
- IT professionals who know the company’s communications systems. These professionals should be aware of where and how data is stored, including e-mail data, backup tapes, how data is overwritten, and the system in place for searching stored data. PDAs used by employees and instant messaging programs can pose a particular challenge for creating accessible stored information, and IT professionals will be invaluable partners.
- Human Resources professionals who can help write electronic communications policies and communicate with the business about its obligations if and when notice of a claim arises. Also, HR professionals should be aware of the general rules regarding how long employment-related documents must be maintained, regardless of claim filing, and they will often be more aware of where potentially discoverable evidence exists (in conjunction with counsel) because of working with the business on a daily basis.
- Legal representatives who know the legal duties involved in e-discovery. This usually involves attorneys of different disciplines, including employment counsel, IT counsel, compliance counsel, and counsel charged with Sarbanes-Oxley responsibility. The attorneys will help identify what systems and information must be accessible in the event of a claim and will help determine how best to preserve that information.
- Compliance/Risk Management representatives, particularly if you are in a regulated industry, will be helpful in identifying systems and electronic information that must be maintained and accessible.
The bottom line is that the computers we rely on to help make our lives easier and more productive also can become burdensome and expensive weights around our necks. Being prepared in advance for litigation can save you both time and money and preserve your legal position as well as your reputation. Contact your legal advisors to discuss the best way for your company to get ready for e-discovery.
Barrie Gross is former Vice President and Senior Corporate Counsel (Employment Law) for an international Fortune 1000 company and is a regular contributor to AllBusiness.com. She is the founder of Barrie Gross Consulting, a human resources training and consulting firm dedicated to assisting companies to manage and develop their human capital. Visit www.barriegrossconsulting.com to learn more about Barrie and the services BGC provides.
Note: The information here does not constitute legal advice and should not be relied upon as legal advice. If you have a legal issue or wish to obtain legal advice, you should consult an attorney in your area concerning your particular situation and facts. Nothing presented on this site or in this article establishes or should be construed as establishing an attorney-client or confidential relationship between you and Barrie Gross. This article is provided only as general information, which may or may not reflect the most current legal developments or be complete.