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VOICES FROM THE INDUSTRY: Amended e-discovery rules create legal hoops for biz

May 7, 2007

You've already heard about electronic information and the law. The I. Lewis "Scooter" Libby trial, the recent firing of eight U.S. attorneys - even the Monica Lewinsky scandal-involved e-mail messages that were called into court.

The rules on use of electronically stored information in legal cases used to be muddy, but amendments to the Federal Rules of Civil Procedure on Dec. 1, 2006, made it clear that electronically stored information can be requested and obtained during the discovery phase of litigation. In other words, if your company enters into litigation, you could be called upon to produce anything relevant that's stored on your computer systems.

The new rules may not affect every case and every company, but unless your business is immune to litigation, ignoring the rules is probably not a good idea. Here are some practical tips to help you prepare.

Don't wait.

The e-discovery rules don't specify when a business is duty-bound to preserve information. Recent case law confirms that the obligation begins when litigation is "reasonably anticipated." Waiting until a complaint is served on your business is probably waiting too long. Take a look at your litigation history. When did a litigation threat never materialize? When did an actual lawsuit take place? Familiarizing yourself with this information will help you figure out how much and what types of litigation you're likely to encounter and when you should begin preserving information.

Know your system.

This isn't a "nice to have." It's a "need to have." The new rules assume that you understand your own computer infrastructure and record retention procedures. Presumably, it should be easy for you to relay information "as it currently stands at the time of the events relevant to the dispute." And you should be able to do this in short order - within 90 to 120 days from the service of the complaint.

Make a map.

Create a map of your computer infrastructure to show how your computers are networked. Include servers, firewalls, routers with host name, IP address and purpose of the server. Do this when you have time - before your business is involved with litigation.

Develop guidelines.

Create guidelines for assessing litigation threats. Document the alleged wrongdoing and any decision to begin or not begin preserving information. Not only will the documentation help assess future threats, but if your business is questioned for not pre serving information, you can show the thought process behind your decision and that your decision was reasonable.

Create a record retention policy.

If you already have a record retention policy and no one follows it, rewrite it so they will. If you have a policy and follow it, perform audits to confirm compliance. This information will give outside counsel the tools they need to comply with e-discovery rules and begin limiting the scope of discovery with the opposing side.

Build a plan.

Develop a strategy for responding to litigation if it does happen. Include a strategy for instituting a legal hold to preserve information and respond to discovery requests. Establish a litigation response team, including representatives from your legal, IT, records management, operations and human resources departments.

Plan to pay.

The new rules were created in part to address the extraordinary increase in information conveyed and stored in electronic format. That extraordinary increase translates to a lot more work. Sifting through all of this information takes time - especially if you don't have an internal IT department with capacity to do the work. Hiring outside technical experts and lawyers to cull down the information will likely lead to increased costs, so budget for them.

Find a format.

Once you've collected and filtered the electronic information you need, you'll want to produce it in a digestible format. Here are four formats to consider:

Native: Electronically stored information produced as is. For example, if an Excel spreadsheet is collected, it would be produced as an .xls file.

Quasi-native: Electronically stored information taken from one database and transferred to another for production.

Quasi-paper: Electronically stored information processed and converted into image (TIFF/pdf) files.

Paper: Electronically stored information printed to paper.

It's especially important for all parties to the litigation to agree on a format. If an agreement can't be reached, the new rules enforce a fall-back provision: Either the electronically stored information is produced in native format or a form that is reasonably usable and searchable (quasipaper).

Use plain English.

All of your documentation, including descriptions of your technological systems, should be written in plain English that can be understood by a layperson who knows nothing about your business.



Berry-Tayman is an associate with the law firm of Baker & Daniels LLP who focuses on assisting clients with electronic discovery and records management. Views expressed here are the writer's.
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