Record-Keeping

"Electronic discovery" is the topic du jour among many litigators. Electronic discovery refers to the collection and production of electronically-stored documents to the opposing party during litigation. And while it may be considered a hot topic, the rules and problems are essentially the same as those applicable to paper documents.

One big issue, for example, is limited storage space. While it is certainly possible to store more data in less space when documents are electronic, it is also true that there seems to be much more data (e.g., e-mails, multiple edits of documents) that needs to be stored on expensive servers and drives. Thus, we presume that like paper documents, it is inefficient and unnecessary to store electronic documents forever. (Sidebar: Yes, there are plenty of IT professionals who will disagree. Nonetheless, the courts have officially given companies permission to delete data under the right circumstances. And some people, like me, just like to keep their storage organized and up-to-date.) Further, and more problematic, some servers can automatically over-write some data without an employee's knowledge. And then there's the scariest situation of all - losing data from a hard drive that is now caput.

The problem with deleting electronic data is the same problem as with shredding documents - when you get rid of "incriminating" documents, you can be fined a lot of money. But when no lawsuits have been filed, how can you know which documents may be relevant in the future? So, the question is, when can a company comfortably remove electronic data without fear of sanctions?

In short, the key to avoiding sanctions is to have a systematic and documented records management policy in place. First, review the location of all documents relating to the operation of the company, and then assess all legal, regulatory, and business requirements regarding the company's operations and the retention of such documents.

Next, the company should have a plan for if/when they are served with litigation. They will need to be able to identify, locate, and preserve all relevant documents. If possible, the documents should be preserved in their original format (electronic or paper).

With this policy in place, the company will know when it is able to delete/shred documents "in the normal course of business," and thus will be protected from sanctions. Such a policy will also enable a company to respond to discovery requests with minimal expense.

Oh yes, and as for data that has been lost through no fault of your own - don't worry, the law protects you. But you should get in the habit of regularly running back-ups. Your business is your livelihood, and you don't want your livelihood in the hands of your fussy computer.