Electronic Discovery: Are You Prepared?

by Roy Bash

What previously was discussed around the water cooler is now frequently memorialized in internal e-mails.

?A few years ago, verbal conversation was the primary mode of business communication. Today, e-mail has replaced the face-to-face meeting, voice messaging and the telephone call as the most frequently used method to communicate. In fact, 93 percent of all business information memorialized in 1999 was created in digital form, according to a University of California study conducted by Kenneth J. Withers.

The tone and context of a verbal conversation is lost when reduced to an e-mail, yet many people still compose an e-mail as if engaged in conversation. Furthermore, what previously was discussed around the water cooler is now frequently memorialized in internal e-mails.

Until recently, a conversation usually involved those who were “in the loop” for the context of the discussion. Now, with various computer tools, messages are often sent to a multitude of people. This may include the complete e-mail string of what started out as an internal inquiry, but quickly spreads to external recipients.

Deleted But Not Forgotten

To paraphrase a classic television show: People say the darnedest things. And, now computers or business networks are mem-orializing all of the communication. In the context of litigation, the landscape has been altered by the ability of the electronic business world to maintain a record of such communications. Frequently, even if the user believes the pertinent file has been deleted, an electronic version remains or is recoverable from the computer storage drives.

Furthermore, if involved in litigation you are obligated to “hold” the data as of the date of the claim and to produce the electronic version of all sources of information, whether or not it was printed for inclusion in the company’s paper file. This includes the “metadata,” or electronic data history of a file, and possibly the data to allow recovery of deleted files.

Pending before the United States Supreme Court are amendments to the Federal Rules of Civil Procedure. These changes may significantly alter the discovery of what will be termed “electronic stored information.” The proposed amendments could require, within days after commencement of litigation, adoption of a plan for producing the applicable electronic files. Many states apply essentially identical rules in their respective courts.

Be Prepared

The ramifications of such rules make it prudent, if not imperative, that each business entity address how it will respond to these requirements if they are a party to litigation. It will be difficult, as well as expensive and risky, to develop an electronic data retrieval process under such short time constraints.

At a minimum, you must be prepared to implement practices that will demonstrate to the court that your business has met the obligations to preserve data for production in the litigation process. This effort requires cooperation among your operations and information services support staff, as well as your legal counsel. These decisions should be coordinated with your document retention policies to ensure data preservation and to avoid spoliation charges.

With advanced planning there are numerous benefits to be obtained that may not be achieved during a “crisis” response. The costs to meet these obligations will be less if you prepare rather than react. In addition, the potential for imposition of sanctions for less than full compliance with the requirements is minimized. Recently, several cases have made it clear that severe and significant sanctions are likely to be imposed if the obligations to produce electronically stored information are not fully met.

I encourage you to review your response plan with counsel who are knowledgeable about the proposed rules and obligations that currently exist regarding production and preservation of electronic data.

Roy Bash is an attorney, shareholder and chairman of the construction practice at Shughart Thomson & Kilroy, P.C. He can be reached via phone at 816-421-3355 or by email at rbash@stklaw.com.