Redefining e-discovery Featured

8:00pm EDT April 25, 2007
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