E-mails and litigation Featured

8:00pm EDT October 26, 2008

An October 2007 report by technology market research firm The Radicati Group estimates there were 1.2 billion e-mail users worldwide in 2007. The same study states that the average business user sent and received 600 e-mails each week that year.

Apart from the technical burdens on companies to route and store all of those messages, companies must worry about what is contained in all those e-mails. This is particularly true when the companies, or their employees, become entangled in litigation and the e-mails become evidence.

Smart Business spoke with Tony Paganelli, a litigation partner with Taft Stettinius & Hollister LLP in Indianapolis, about what companies need to know to protect themselves from their employees’ own e-mail messages.

How have e-mails become potential sources of litigation for companies?

Every e-mail message has the potential to become evidence in a lawsuit because it documents a communication between people. This is especially important because people are often careless about what they put in e-mail messages. Since e-mails are time-stamped when they are sent and are difficult to alter, they can be very useful evidence. So I advise clients to be cautious in what they put in e-mails because they may be read by many people other than the intended recipients, including lawyers, judges and juries.

Is a confidentiality notice in an e-mail enough to ensure that what is contained in the e-mail is kept confidential?

No. Just because I put a confidentiality notice at the bottom of my message, that’s not binding upon someone unless he or she has agreed with me to keep our communications confidential. The bigger problem is when a message gets accidentally e-mailed to someone else or it gets forwarded. Someone who is a third- or fourth-level recipient has no obligation to me unless he or she has a separate agreement with me to agree to keep my e-mails confidential. And even if there is a confidentiality agreement, if someone is subpoenaed, the subpoena sometimes trumps the confidentiality agreement. (If you do have a confidentiality agreement, it would be wise to include in that agreement a requirement that the other party notify you that he or she has received a subpoena. That way, you get the opportunity to step in and oppose the subpoena.)

Do companies have an obligation to preserve e-mails or other electronic evidence when a lawsuit is threatened?

Yes. Once companies or individuals are sued or anticipate litigation, they have an obligation to preserve all relevant records including e-mail. The sanctions for parties who fail to do this can be staggering. If I’m involved in a lawsuit, if I think I’m going to be suing someone, or if I think there will be litigation brought against me, I have a duty to preserve relevant e-mail.

What proactive steps can a company take to ensure it avoids any litigation regarding e-mails?

There is no way to ensure e-mails won’t be part of a lawsuit. In fact, such a large percentage of business communication today is done by e-mail that it’s very unusual for e-mail not to be part of the evidence in a lawsuit. But there are ways companies can minimize their risks.

First, companies should educate their employees about e-mail and the potential uses to which their messages could be put. This education should start with a reminder to avoid the ‘reply to all’ button whenever possible. They must adopt policies to control what employees are writing in e-mail messages. The lesson that e-mail should be treated more like a thoughtfully drafted business letter than a watercooler conversation should be firmly instilled into employees’ minds. Employees should also be told that management reserves the right to review all e-mail messages sent or received on company e-mail accounts, and improper e-mailing can be grounds for discipline.

Second, companies need to adopt and enforce e-mail retention/destruction policies. Unless there is a compelling business need to save e-mail messages forever, companies should establish a reasonable period after which all e-mail messages will be permanently deleted (to the extent possible) from company computers and servers. But remember that these policies must be suspended when litigation is anticipated, since the duty to preserve evidence trumps even the most reasonable document destruction schedule.

What steps should a company take after a subpoena has been received?

Immediately upon receipt of the lawsuit, management and IT staff should sit down with their lawyer for a planning meeting to establish three things: One, which e-mail users’ accounts might have relevant e-mails? Two, where are those e-mail messages stored? On the server? On a backup tape? On a BlackBerry? On the user’s laptop? On the user’s home computer? And three, how can e-mails be gathered and reviewed most efficiently?

TONY PAGANELLI is a partner with Taft Stettinius & Hollister LLP in Indianapolis, who concentrates his trial and arbitration practice in business litigation, criminal defense and real estate/construction litigation. Reach him at (317) 713-3573 or tpaganelli@taftlaw.com.