Be Proactive: Know Your Systems and People Before Facing a Lawsuit

The following is an article I wrote about the recent changes to the Federal Rules of Civil Procedure and its impact on record keeping responsibilities and issues.

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As of December 1, 2006, the Federal Courts have adopted new Federal Rules of Civil Procedure that explicitly acknowledge the fact that information that may be relevant to a lawsuit exists only in electronic form. As such, for the first time the rules set forth procedures that lawyers need to follow in all federal cases. Electronic discovery is no longer limited to the huge cases, it will be required to be discussed in all cases.

While we will not discuss the specifics of the rules here, as the details are of interest mainly to other lawyers and people who are involved in a federal lawsuit, this article focuses on the impact of these rules on record keeping responsibilities and issues.

So what kinds of electronic evidence are we discussing here? It should be stressed that the new Rules define “electronically stored information” very broadly. Instead of focusing just on documents, such as word processing documents and emails, the definition now can include information stored on voice mail, PDA’s, cell phones (with or without cameras), thumb drives, laptops, and backup tapes. Even automobiles, with their onboard computers that can store information about a vehicle crash, are potentially covered by the new rules.

The new rules do not prohibit the routine deletion of electronic evidence as part of a regular record keeping policy or program. However, once a person has knowledge of a lawsuit (or even a potential claim), the preservation requirements kick in. Parties then have a duty to quickly preserve electronic evidence before it can be destroyed. There can be severe consequences for failing to preserve electronic evidence once there is notice of a lawsuit, or there is reasonable anticipation of one. As such, careful companies should prepare for this eventuality by knowing their systems, and knowing their people.

Know your systems – Companies should know what pieces are in their IT infrastructure, and how they work and interact. If an automated backup system that overwrites data is not stopped in a timely fashion, then critical data could be overwritten. If nobody except the IT support staff knows it’s running, then who knows to stop it in time? Some questions to consider are: Where are the machines located? What kinds of backups are run? Where are backups stored? How long are they kept? Is mail stored on the servers, or just on individual machines? How is voice mail stored? Is voice mail backed up? Knowing answers to these types of questions in advance can help to reduce the time needed to get up to speed once there is litigation, and helps avoid the inadvertent destruction of data.

Know your people – The duty to preserve evidence attaches not just to a company, but to all of its employees. Some questions to consider are: Who is the most knowledgeable person about this particular system? Who uses that program? Who has access to this data? Who can overwrite it? Who can delete it? These questions can help you determine who is the most knowledgeable about the systems, and help determine who needs to be told to preserve evidence.

We hope that these questions will help to allow people to be proactive, rather than reactive. It would be a shame for a company to feel pressured to settle a case it could otherwise win rather than face the prospect of producing electronically stored information.

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