Failure to manage electronic record discovery presents litigation risk, Forensic Foresight

Analysis

Failure to manage electronic record discovery presents litigation risk

Issue 10, October 2013

The low cost of electronic data storage, coupled with a behavioural shift towards increased reliance on electronic communication, has resulted in corporations retaining vast quantities of data.

The low cost of electronic data storage, coupled with a behavioural shift towards increased reliance on electronic communication, has resulted in corporations retaining vast quantities of data.

Traditionally, production of documents in response to court orders has involved a review of primarily hard copy documents. But the trend is rapidly moving towards requests for, and the provision of, a considerably larger proportion of electronic documents.

A common misconception is that courts will excuse parties from complying with their obligations if the search process is too costly, onerous or voluminous. However a number of recent Federal Court cases show this is increasingly not the case with parties being ordered to:

  • Perform discovery, despite evidence indicating that to conduct searches of electronic material would involve a significant amount of documents, and be time consuming and expensive
  • Engage forensic data specialists to conduct further searches in cases where it appeared that they had not satisfactorily complied with their obligations
  • Make further and proper enquiries as to whether electronic communications or documents have been retained in a retrievable form even when technical sophistication may initially deter a party from doing so
  • Search electronic records even when emails were printed and retained in hard copy.

With the courts indicating the above expectations of parties, corporations need to ensure that appropriate information management systems, strategies and processes are in place to allow quick and thorough responses to be collated.

Questions to ask

1.  Do you know your data?  
 


From a forensic perspective, data may reside in a number of different systems such as email servers, file shares, the cloud, externally hosted web-based email servers and document management systems.

Take into consideration the time and effort that may be required when obtaining data from each of these systems. While some systems may be well structured and easy to use, others may require significant time and effort when it comes to extracting information. Always perform a test run and build timeframes into a document request response plan.

When performing discovery, aim to compile a detailed inventory of electronic data as early as possible – this will cut down your organisation’s response time and put you on the front foot when meeting deadlines.

 
2.  Can you easily find relevant information?  
 


Sorting and separating out redundant or irrelevant information significantly reduces the cost of review and mitigates the risk of “trolley load litigation”. Ensure that your system is able to quickly identify relevant information and flag duplicate documents.

When undertaking this process, be careful not to arbitrarily destroy documents, as sanctions may apply if this is seen to prejudice the proceedings.

 
3.  Do you have a comprehensive data retention strategy?  
 


A transparent and relevant data retention strategy, supported by appropriate technology and processes, is one of the key elements of being prepared for discovery or other document requests.  

Consider also undertaking a regular e-discovery audit to identify gaps in your organisation’s process.

 
4.  Are you using the right technology?  
 


An emerging trend is the implementation of in-house eDiscovery systems. These can assist corporations classify, organise, structure and preserve data in a forensically sound manner, and can also help with quick and easy collation of relevant information.

When implemented correctly in collaboration with IT, legal, internal audit and records teams, an in-house system represents a low cost, sound data management investment.

 

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