The recent amendments to the Federal
Rules of Civil Procedure highlight the
importance of having document-retention policies in place that take into
consideration electronically stored records
and data. In order to ensure that necessary
information is preserved and can be produced in the event of litigation, it is critical
to institute a corporate policy relating to e-discovery.
“Defining record-retention protocols in
advance and not waiting until after a
lawsuit has been filed is the classic
avoidance of locking the barn door after
the horse gets out,” says John Mitchell,
an executive partner at Secrest Wardle.
“It protects the credibility of the company, and it protects against the potential
imposition of sanctions.”
Smart Business spoke with Mitchell
about e-discovery and the importance of
being proactive in respect to record-retention protocols.
What effect has e-discovery had on litigation?
We can look at this from two perspectives: the first is technical and the second is
practical. Technically, new rules have been
established that codify the fact that e-commerce is the order of the day and that electronic storage of documents now predominates. As a practical matter, these rules
expand what can be done in discovery, and
they create mechanisms for companies to
be exposed to what heretofore had been
undiscovered internal communication.
Sometimes that is a great benefit to someone going through litigation, and sometimes it’s a potential detriment.
What are the recent amendments to the
Federal Rules of Civil Procedures in regards
to e-discovery?
It’s important to recognize that the rules
have been around for decades, long before
most people had ever heard the word computer. On the other hand, computers dominated companies’ operations for many
years before the rules were changed on
Dec. 1, 2006. The amendments define the
capacity and the ability to request and obtain documents maintained electronically. The rules also provide very significant
requisites for meeting and conferring
among counsel prior to the initial mandatory conference with the court.
Discussions need to include what is electronically stored, how data may be
retained and specific protocols defining
not only where these documents are but
what can be produced and how.
How have these changes affected the manner
in which parties handle written discovery?
At a baseline level, litigants start out
with their preliminary requests for production, seeking specific information
regarding what is maintained electronically and asking that documents be produced. Creative attorneys can expand
their request from the traditional request
for someone’s files to asking for what is
stored on hard drives, what is available
through servers on either the sender’s or
recipient’s side and what might be available through the ISP server. The expanded availability of what can be asked for
and the permanency of what is electronically stored has redefined the scope of
what can be requested.
On the other hand, historic protections
and rules for discovery have not changed:
The fact that written requests are more
expansive than in the past doesn’t change
the ability to object on the basis of relevancy and privilege.
Why is it so important to institute a corporate
policy that addresses the use and retention of
electronic information?
What is in your documents so often
defines your potential liability or your
defenses. Unlike in days gone by, when
everything you had was simply in the filing
cabinet, the existence and capacity of anything stored electronically to remain permanently part of your file requires that you
have a policy to protect how documents
are created, who has the authority to
memorialize information on behalf of your
company and for how long that material is
going to be retained.
How can CEOs and senior-level management
be proactive in regards to record-retention
protocols?
Management needs to work with counsel, whether it’s corporate counsel or
retained counsel, to set up policies and
define how document management is
going to occur. The system needs to be
reasonable, have a systematic approach
and a clear definition of how the company is going to define their business needs
and how it is going to meet legal requirements.
As to the latter, and even if it needs to
be done by something as basic and fundamental as a literal checklist, there
must be a definition put in place that
defines when legal requirements create
the need to retain documents that otherwise would be disposed of. This requires
somebody with authority to define what
immediate action needs to be taken,
when requisite notice of impending or
potential legal action comes in, and what
steps will be taken to maintain the
integrity of what is retained.
JOHN MITCHELL is an executive partner at Secrest Wardle. Reach him at (248) 851-9500 or [email protected].