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Protect your company with electronically stored information policies
Edge Business Magazine (June 2007)
Your company is involved in a lawsuit and during the discovery process the opposing side has asked you for copies of all documents relevant to the transaction at issue. In the past, you opened a file cabinet, found the folder labeled ‘‘XYZ Transaction,” and copied those documents.
Today, responding to that request is not so easy. We no longer just keep a set of documents in a file cabinet. We now have what the law refers to as electronically stored information. Electronically stored information includes items like e-mails and Microsoft Word documents. That information could be stored in a number of locations, including an employee’s personal computer.
Electronically stored information could also include ‘‘hidden’’ data, or metadata. Such data often includes author names and changes made to the document. As a result, it may not be enough to only produce the hard copy of the final document. The opposing party may be entitled to review the metadata.
We easily and routinely delete electronically stored information, which may cause difficulties unless an information technology expert can recover the deleted information. If you delete electronically stored information that would be relevant in litigation, you subject your company to sanctions. Sanctions could include the use of an ‘‘adverse inference instruction’’ where the court tells the jury that it may infer that the information would be un- favorable to your case — even if it might have been favorable.
In one well publicized case, a Florida judge sanctioned Morgan Stanley for deleting rel- evant e-mails. The sanction played a part in the jury awarding $1.5 billion in damages to the plaintiff. The verdict was recently overturned on appeal, but on grounds unrelated to the sanction.
Your company may benefit from an electronically stored information storage and destruction policy, as long as the policy is followed. Regardless of whether you have a policy, you and your employees should retain electronically stored information that you have reason to believe will be relevant in pending or ongoing litigation.
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