The days of pen and paper are all but
gone as businesses race to implement
the latest layers of information technology. Hidden within these layers are electronic documents that someday may become evidence for litigation.
To participate in today’s complex litigation, companies must produce and obtain
extensive electronic evidence. As a result,
the federal government recently approved
amendments to the Federal Rules of Civil
Procedure governing electronic discovery.
“The new rules create a process that
addresses the need to retrieve, restore or
translate electronic stored information
before it can be reviewed for relevance or
privilege,” says C. Philip Campbell Jr., a
partner at Shumaker, Loop & Kendrick
LLP. “With the vast amount of business
data being stored electronically, it is crucial
that all companies implement an organized
global document retention policy.”
Smart Business talked to Campbell
about the December 2006 e-discovery rule
changes and the importance of implementing a global document retention policy.
How do the recent e-discovery rule changes
impact businesses?
The updated federal rules define a new
category of discoverable information
known as electronically stored information
(ESI). The new rules also establish the
process for the parties and the court to
address issues pertaining to disclosure and
discovery of electronic information.
The main consideration for companies
under the new rules is implementing a
global document retention policy that sets
out how long information is kept and
defines how and when paper documents
and electronic data can be destroyed. This
is crucial because a stipulation in the new
rules includes a ‘safe harbor’ — so if your
company instituted and followed a reasonable document retention policy prior to
identifying the likelihood of litigation, sanctions are unlikely if information is lost.
How are retention policies implemented?
The goal is to have a policy that allows you to conduct your business in the ordinary
course. The first task is to decide what
kinds of information should be retained
and what kinds should be routinely destroyed. It must also be determined where
the retained information will be stored, and
who can access it. Companies should
appoint either an IT person or perhaps in-house counsel to install the protocols and
make sure the retention policy is in place
and is periodically audited.
What steps should be taken if litigation is
anticipated?
If you identify the likelihood of litigation
— perhaps in the form of a letter, a disgruntled employee or certainly if you’re
served with a summons or a complaint —
you need to move away from your normal
retention policies and put into place what
is called a litigation hold. This means any
information related to that potential claim
or litigation should be segregated and protected to ensure it does not inadvertently
get deleted or overwritten.
How is e-discovery defined in the event of litigation?
The new rules lay out guidelines for a
court-mandated ‘meet and confer’ session (or series of conference calls) where all
parties work through and hopefully reach
an agreement about how to conduct the e-discovery process, including timeline and
what information will be produced. Another consideration is to determine the
‘universe of information,’ or identify where
this information is stored. Electronic information spreads far and wide and could be
stored on company PDAs, office computers, employee laptops and home computers, or at outside resources.
The use of nonwaiver agreements are
contemplated in the amendments. Non-waiver agreements allow parties to conduct a less rigorous privilege review prior
to production, and if privilege materials are
inadvertently produced, they can be
reclaimed without waiving the privilege or
confidentiality.
Can e-discovery interfere with normal business operations?
It certainly can, and the rule changes
address this concern. The rules separate
accessible from inaccessible information.
Accessible information is typically data
stored on hard drives, backup tapes,
servers or hard drives. This is why it’s crucial to have your global retention policies
in place, with mechanisms to best preserve
information without impeding your ability
to conduct business.
What resources are available to assist with
e-discovery?
Outside document retention, implementation and forensic resources will provide
experts to identify the information, determine what needs to be retained and in
what format it should be stored. It may be
more economical to tap these resources
that are experts in the new e-discovery
rules rather than trying to use internal
staffing resources.
C. PHILIP CAMPBELL JR. is partner and head of the Litigation
Department at Shumaker, Loop & Kendrick LLP. Reach him at
(813) 229-7600 or [email protected].