The Cost of Efficiency – Litigation and Electronically Stored Data (ESD)

By Joel L. Aberg

In the year 2000 it was estimated that over 6.6 trillion e-mail messages were generated in the U.S. workplace. Triple the number estimated for 1998. Imagine what it is now.

The significance is not how many e-mails there are but what information is contained in those emails and how to economically retrieve it in the event of litigation. Generally, business is now largely conducted and recorded by use of computers, PDAs and electronically-stored data. It is important for any business, in consultation with its legal advisors and information technology professionals, to have an organized ESD plan if and when litigation occurs which involves that information.

It is now well accepted in litigation that ESD is subject to the same rules of discovery and production in a civil action as paper documents. Which means if someone asks for electronic information as part of discovery in a lawsuit, the party who has that information must produce “hard” documents or allow access to electronic systems where the information is stored. But there are a number of critical differences which complicate the production of ESD: (1) An electronic document is easier to damage or destroy than a paper document; (2) An electronic document can be searched; (3) Electronic documents are usually stored and filed more haphazardly than paper documents; (4) Electronic documents, especially e-mail, are often casually composed (i.e., not strictly business); (5) Every draft of an electronic document can often be recovered even if deleted; (6) There is no “shredder” for an electronic document; (7) ESD can contain “embedded” information; (8) An electronic document can often be made to reveal the name of every person it was ever sent to; and, (9) ESD can exist or contain “legacy” data from prior systems. Source: “Disk -Covery Issues for the 21st Century,” Jacob P. Hart and Anna Marie Plum (September, 2000).

These considerations demonstrate that there should be at least two overarching goals for modern business corporations. First, policies and procedures must be developed regarding what information must be retained electronically, for how long, for what purposes and how information can be retrieved in a cost-effective manner. Do not count on the courts to protect you from those costs associated with producing ESD. And, second, policies and procedures must be put in place which inform employees as to what they can and can not place in e-mails or other ESD. Harassment discrimination lawsuits in particular often arise out of the careless use of computers and e-mail at work. Take the time to remind employees that these systems are to be used for work-related purposes and discipline those who abuse their access to ESD. While computers often make our lives easier, they complicate them as well. Be sure to evaluate the impact of these concerns and have a plan to address them if your company is the subject of litigation.

This article is intended for general informational purposes only, and should not be construed as legal advice. Always contact your legal counsel for advice or answers to your questions.