Legal Affairs
Beware the ‘delete’ key
How to store your digital records for possible litigation
Smart Business Akron/Canton | September 2006
The number of records kept in digital format by a majority of companies now surpasses the number of hard copy records they keep. While most companies have document retention policies relating to their hard copy records, most of these procedures are inadequate when applied to digital records.
“The challenge companies face pertaining to record retention has been amplified with the adoption of new Federal Rules of Civil Procedure,” says Ronald S. Kopp, a business litigation attorney with Roetzel & Andress, L.P.A. “These rules will require vast amounts of electronic information be produced when at issue in any federal litigation. It is probable that state rule amendments will follow soon.”
Smart Business spoke with Kopp about the issues relating to electronic record retention.
What do you see as being the most pressing challenge for companies relating to electronic information and litigation?
Most companies routinely delete electronic information. For example, some companies might automate the e-mail system to delete e-mails older than 30 days. Those deleted e-mails may be saved to a backup tape, and that backup tape may be erased after another 30 or 60 days.
In the days of paper documentation, correspondence might have existed in files for years. Now that employees correspond more frequently by e-mail, the correspondence might disappear in weeks or months.
Why is that a problem and who should be concerned about record retention policies?
In the end, all parties involved in a dispute may have an interest. The possessor of the electronic document might want to have it months or years later to prove a particular point in the litigation. On the other hand, the opponent in litigation is going to accuse the other side of evidence spoliation if measures are not taken to preserve evidence once a dispute arises. If records are deleted following knowledge that a dispute has arisen, even if the deletion is routine or accidental, there will almost always be a [legal] price to pay.
So how might a company avoid that problem?
Most sophisticated companies that are attempting to stay ahead of the curve create ‘hold order’ processes. A hold order is simply a directive to persons involved in a dispute that they should retain all hard and electronic documentation concerning the dispute. The hold order must also be communicated to the person responsible for the company’s computer systems.
A hold order is issued by the company’s records custodian the moment he or she learns that a dispute has arisen. Knowledge of a dispute may come to the company by way of the filing of a lawsuit, the issuance of a subpoena, a demand for arbitration, or just the exchange of heated correspondence on a particular business issue.
Depending on the size of the matter, it may make sense to move all relevant electronic information to a separate database or server so that the information does not become intermingled with the company’s routine business documentation. Also, companies should retain the earliest backup tape pertaining to the company’s electronic information system it has at the time a dispute arises. Subsequently, copies of all related documentation created after the dispute arises should be copied and sent to the separate database.
Are court rules now requiring the production of electronic information?
Yes. First of all, all court rules currently define ‘records’ as including electronic information. Beyond that, the Federal Rules of Civil Procedure have been amended (and will take effect in December 2006) to specifically address issues pertaining to electronically-stored information. For example, the civil rule pertaining to producing documents as evidence in a dispute has been amended to state that one party may request that another party supply access to electronically-stored information. The rule states that the party making the request can inspect, copy, test or sample the electronically-stored information. Further, the responding party must convert the electronically-stored information into a reasonably usable form. The amended rule provides that the request may specify the form in which electronically-stored information is to be produced.
The new rules do contain what is called a ‘safe harbor.’ A party is not required to provide electronically-stored information from sources that are not reasonably accessible because of undue burden or cost. However, even if that point is made, the court may still order that the electronically-stored information must be produced, regardless of burden or cost, if the party requesting the information shows good cause and other requirements are met.
RONALD S. KOPP is a business litigation attorney and partner-in-charge of the Akron office of Roetzel & Andress, L.P.A. Reach him at (330) 849-6644 or rkopp@ralaw.com.
