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Electronic Documents: What You Don’t Know Can Hurt You

Words: Timothy AhoThe rapid expansion of computer technology during the last two decades has been a tremendous boon to the productivity of American business. Unfortunately, these tools also present documentation, production and litigation challenges and expenses. Incorporate best computer record business practices, or run the risk of losing your case before it starts.

Almost all businesses, especially those in the construction industry,will face litigation at some point.Civil lawsuits have long required the production of a company’s documents and other information as part of the pre-trial discovery process. Indeed, documents can make or break key aspects of a case. We always recommend that contractors be careful to maintain excellent project records as the first and most important line of either offense or defense in litigation.

Beyond the potential factual impact on the case, the discovery process can be expensive and grueling. Electronic information and documents have made this process more demanding and onerous. A “document,” for litigation purposes, is not limited to paper files, but generally includes information stored in almost any medium, including computer hard drives and other electronic devices.

Increasing reliance by businesses on computer technology has caused a dramatic increase in the number and kinds of documents a company generates.Routine phone calls are increasingly replaced by voicemails, emails and even text messages. Word processing and other computer programs enable employees to generate and capture greater amounts of data and information for daily use and, potentially, include multiple draft versions. Cache files on computers may show what websites an employee has visited on certain dates at certain times.

The sheer volume of information dictates that businesses have routine document destruction policies, in order to save limited hard drive, server and storage space. Even companies that have no systematic policies of eliminating this information may lose it in other ways, whether by a well-intentioned employee seeking to clear hard drive space, or by automatic deletion in the ordinary operation of computer systems.

Deletion of electronic information can have serious consequences if a company is involved in a dispute that it could reasonably expect to lead to litigation.When disputes that could lead to lawsuit arise, the computer-generated emails, logs, records, spreadsheets, and other documents generated in today’s business environment may become important pieces of evidence in the event of a court case, often in ways that are not apparent at the outset of a dispute.

The litigation process caught up with these advances in technology in Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 (S.D.N.Y, 2003), a seminal case governing the preservation of electronically stored information. Under Zubulake and its progeny, a party has a duty to suspend any routine document retention or destruction policies and put in place a “litigation hold” to ensure the preservation of relevant documents. A party that fails to do so can be subject to serious sanctions, including fines, attorney’s fees, or even judgment by default against the party that failed to preserve the information.

Electronic information can be found in many places, including email servers, archives, networked computer servers, the computer hard drives of individual employees, back-up disk drives, electronic documents that have been printed, text messages and digital photos cell phones, and even the personal email accounts, files and PDAs of individual employees.Take steps to ensure that whenever litigation is reasonably anticipated, relevant documents are preserved so they can be produced later.

Your company should consider:
  1. Seeking legal counsel and professional IT advice to establish proper basic retention protocols and also to create litigation hold procedures;

  2. Establish centralized server storage protocols to minimize or even avoid documents being saved in a plethora of locations;

  3. Evaluate PDA and cell phone usage and whether you need retention and hold procedures for these devices;

  4. Ensure your procedures cover not just standard computer records, but also phone systems, networked copier and copiers with memories;

  5. Educated managers and employees on the critical importance of these procedures;

  6. Identify key personnel and processes for implementing litigation holds on documents.
With the proper precautions, a company’s use of technology can still dramatically increase productivity without handicapping its access to the courts.
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