ESI – electronically stored information – is at the heart and soul of eDiscovery.
A lengthy Lexology article by Alan S. Naar neatly sums up how eDiscovery has been transformed into a unique universe inhabited by many players with varying degrees of involvement. We not only have players, but we also have thorny issues and unplanned expenses. In fact, as Naar concludes:
“E-discovery issues have created a new minefield in litigation involving thorny questions and unexpected costs. Every business has an obligation to be aware of these issues and should consult with counsel regarding new developments in the law.”
ESI Retention Policies
One issue, in particular, needs a closer look: a company’s ESI retention policy.
Naar advises that every company should have a document retention policy with cut-off dates for preserving documents – both electronic and hard copy. And when the dates come up, the documents should be deleted or removed from the system.
So far, so good. But here’s where things get thorny.
Naar says that if a company adheres to a “reasonable retention policy” and destroys information based on that policy before a litigation is filed, the company will not be penalized.
Don’t breathe easy just yet – there’s a but, and it’s a BIG one. The courts have ruled that when there’s a chance of a litigation, or an existing litigation would be compromised if documents are not made available, the company is obligated to suspend its regular policy and must comply with eDiscovery requests (a.k.a. “a litigation hold.”)
Your Word Against Theirs
So how does this play out? Something like this. Let’s invent….Joe.
Joe is a business owner, and per his document retention policy, he tells his IT department to destroy all ESI that has reached the due date. Two days later, Joe receives a legal notice advising him that he must surrender all e-mails and messages exchanged over the past two years ago by his marketing people.
Naturally, he’s going to respond by saying that such documents are no longer available, and he’s going to point to his retention policy, which tells him to destroy documents after a certain date. Guess what the other party’s going to say to this?
“Joe, it’s clear that you destroyed the documents in spite of the fact that you knew there was a possibility of a lawsuit?”
And Joe’s irate reply: “I didn’t know I was going to be sued.”
And that’s the rub. Because it’s up to the courts to decide just how credible Joe is when he makes that statement. He’s going to have to really make it clear that he was following a “best practice” policy – and not exploiting that policy in order to mitigate any possible litigation exposure.
Get Expert Legal Help
If Joe could go into a time machine, he’d certainly slide back a couple of years and ask a legal expert for iron clad advice on how to handle his retention policy – and how not to handle it. He’d get things in writing. He’d undertake due diligence. In short: he’d pay attention to this issue because two years later it could have the potential to throttle his company.
As we said, Poor Joe. There’s no time machine for him…but there is for YOU. Get the expert advice you need on this issue, and the next time someone asks “are you sure you want to delete that?”, make sure that your answer is good from a legal perspective; not just an operations or management one.
(Donations for the Save the Joe fund can be made in c/o this blog.)