Best Practices for Preparing Electronic Content for Litigation

By Steve King

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Today, important complex changes in the Federal Rules of Civil Procedure (FRCP) regarding electronic discovery become official, resulting in the transformation of how electronic content is managed.

The changes, which have been generally recognized within the corporate legal community for some time, make all companies in the U.S. and some multi-nationals more accountable for preserving and accessing data for electronic discovery requests. Failure to follow the new rules will likely be a costly mistake, resulting in longer, expensive “rush job” discovery requests, unnecessary and costly settlements of frivolous litigation, and even lost cases and possible fines.

Over the last several years, electronic discovery has consistently become more widespread and costly for enterprises, with costs averaging $1.5 million per defense of a corporate lawsuit, according to Gartner.

To meet the requirements of the rule changes, companies will likely need to add additional IT infrastructure and services. However, by taking a best-practices approach to electronic discovery, organizations can minimize additional infrastructure expenditures, control the costs of legal proceedings, and maximize the effectiveness of litigation in the U.S. federal court system.

The Changes

The amendments to the FRCP, which were approved by the U.S. Supreme Court, for the first time specify that electronically stored information, including email, should be preserved for possible analysis and production during civil procedures. The rules affect all U.S.-based organizations, and some multi-nationals, and can dramatically increase the time and money spent preparing for litigation.

Although the FRCP amendments are complex, what you can do to minimize the risks of violating them is clear: You must be able to identify the sources of electronic evidence you have, be clear on where it resides, and know how to produce it for opposing counsel if necessary.

While these goals are clear, how to cost-effectively reach them may seem daunting. However, by adopting the following best practices, organizations can minimize the cost and hassle of evolving their infrastructure, and then approach litigation with confidence they can handle electronic discovery properly and efficiently.

Establish “good-faith” data deletion. The FRCP changes make it imperative that companies develop a best practice for the deletion and disposition of electronically stored information.

In the absence of fully established case law, it’s critical to demonstrate “good faith” in all actions and operations, and the key to the good faith concept is to set up deletion procedures that allow for quick and reliable implementation of “litigation holds” to prevent data relevant to pending or anticipated litigation from being destroyed.

To do this, take the following steps:

  • Gather all information about data preservation requirements.
  • Confirm that all preservation information is comprehensive to that date and ensure all appropriate people sign off on it.
  • Scan information against all records scheduled for deletion.
  • Tag records to be placed on litigation hold.
  • Hold litigation-related records in a secure location.
  • Update preservation information and check against any new or changed preservation criteria one last time. If the preservation criteria has changed, start again at Step 3.
  • Verify the preservation criteria used to scan the records targeted for deletion is complete, final, and signed off.
  • Delete records not tagged for litigation hold.
  • Log the deletion by preserving at least the date of deletion, the preservation criteria, and the identities of authorizing entities.
  • Know what data you have and in which format it exists. The FRCP changes provide a mechanism by which a party to a lawsuit can claim that it need not search certain sources of information due to an undue burden or cost. But to take advantage of this rule, you must be able to identify with as much specificity as possible:

  • Your sources of electronic information.
  • The electronic information you do plan to use in the litigation.
  • The sources of information you don’t intend to search due to undue burden or cost.
  • How much it would cost to search them.
  • The likelihood they would turn up any relevant information.
  • This rule also applies to the contents of backup tapes.

    Address the most important content first. According to the Enterprise Strategy Group (ESG), email represents a staggering 75% of all corporate intelligence, and in 2005, according to Corporate Counsel Magazine, U.S. organizations spent a total of $5.8 billion to analyze email for discovery purposes. Several million-dollar fines have been levied against corporations in the last few years for failure to capture, preserve, and produce email.

    Focus on email as one of the first types of content you properly capture and preserve. To manage both current and older email and provide quick access when needed, implement a content-archiving solution as a central repository for both email and files.

    Ensure that policies established for data deletion are integrated with the archive, and that both the policy and the system allow for “legal holds.” While the rule changes require companies to integrate data deletion into the archiving system, companies should ensure the flexibility to initiate legal holds to prevent automatically deleting information relevant to pending litigation.

    Legal holds require companies to retain data relevant to “pending or reasonably anticipated litigation,” and the legal hold process should be a part of your general retention policies. This ensures that potentially discoverable data is not deleted, which could save your organization millions of dollars in lost suits or settlements.

    It’s important to note that in many cases, the requirement to preserve data is triggered long before a lawsuit is initiated. For example, a company is expected to place a legal hold on email and files related to its research and development efforts on the day a newspaper article is printed about its product defects—and not when an associated class-action suit commences.

    Steve King is president and CEO of ZANTAZ, a global provider of content archiving and electronic discovery solutions.