In 2006, the Federal Courts implemented the amended Code of Civil Procedure (the “amended Code”), which explicitly addressed electronically stored information (“ESI”) and instructed litigants that ESI must be preserved and must be produced. Turning the page on the days of old, business litigants rushed to prepare for the tidal wave that is electronic discovery - better known as “e-discovery.”
In the years since the adoption of the amended Code, the scope of federal discovery has exploded. Because of the growing reliance on ESI and electronic storage of corporate information, this will not change.
For many businesses entangled in federal litigation, the volume of ESI requested, reviewed and produced is mind-boggling. Considering ESI in terms of pages, the review and production can easily reach into the millions. Consequently, the expense incurred by business litigants can be enormous. This variable often makes litigation a very unattractive option for businesses despite strong claims or defenses.
Additionally, due to the great volume and complexity of ESI, critical collection and preservation failures are all too common. Such failures can result in additional expense and possibly sanctions by the court.
This article suggests five steps that businesses can take to mitigate the expense and litigation risks associated with e-discovery.
1. Implement a Records Retention and Information Governance Policy
A manageable and consistently-enforced Records Retention and Information Governance Policy ("Records Retention Policy") is critical. A business should know what ESI it has, how it is stored, where it is stored, and how it can be accessed. Moreover, a Records Retention Policy will provide a clear plan for retaining, managing, and destroying corporate information in compliance with statutory and regulatory mandates, operational necessity and in the event of litigation. A business should not only implement a Records Retention Policy but it should also ensure that employees are instructed about the Policy’s procedures and directed to follow the Policy. With a Records Retention Policy in place, and in the event of litigation, a business can efficiently and effectively respond to the duty to preserve relevant information and avoid wading through dated and unnecessary corporate information.
2. Assemble A Litigation Response Team
While a business should not augment its core operations to prepare for unknown litigation, as a practical matter, the possibility of litigation is always very real. It is, therefore, essential that a business prepare and plan the steps it will take when litigation begins or even when it is merely anticipated. While a consistently enforced Records Retention Policy is a fundamental step, equally important is the formation of a trained Litigation Response Team (“LRT”). A well-trained LRT will lead necessary investigations and oversee and manage the internal collection and preservation of relevant information.
3. Issue A Litigation Hold Notice
When a business “reasonably anticipates” litigation, its duty to preserve potentially relevant material is triggered. When the duty to preserve is triggered, a business must act expeditiously and instruct employees to preserve relevant information. A Litigation Hold Notice (“Litigation Hold”) will advise employees of the threat of litigation, or even the possibility that the business itself may file a lawsuit, and instruct employees regarding the scope of information subject to preservation and methods for collecting and preserving relevant information. Additionally, a carefully drafted Litigation Hold will direct initial recipients to identify other employees and third parties potentially possessing relevant information.
4. Utilize Information Technology Consultants
Unfortunately, e-discovery is not cheap. A business should remember, however, that front-end costs are acceptable. A little money spent up front can often save a significant amount of money down the road. All too often, litigants learn of critical failures in the ESI extraction, review or production processes. There is often no solution other than to repeat very costly steps. Therefore, it is essential that a business litigant hire outside information technology (“IT”) consultants at the first instance to ensure the competent completion of these complex electronic steps. No matter how much outside counsel positions himself as a computer expert, and while lawyers may generally understand ESI, they are by no means IT specialists.
5. Remember That Cases Are Won On The Merits
It is absolutely critical that a business litigant remember that the case is won on the merits. While there is certainly a movement to request every email and every bullet point on every PowerPoint, the reality is much of this information may prove to be irrelevant. When unnecessary information is requested in litigation, it will be processed and reviewed resulting in unnecessary expenses. A business should avoid the enticing opportunity to ask for everything. If you ask for it, you may receive it and you will pay to review it. Therefore, a business litigant should remain cognizant of the elements of its claims and, or, defenses and tailor its requests for information to satisfy these elements in order to prevail in a cost-effective manner.
E-discovery is challenging for all business litigants in terms of its complexity, expense and risks. Like any other challenge, a business must plan ahead and stay proactive. Moreover, as the volume of information created and stored by businesses and their employees continues to grow, it is imperative that businesses act diligently to minimize the expense and risk associated with e-discovery.