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e-Discovery: Amendments to the Federal Rules of Civil Procedure (FRCP)
By Christopher S. Rugaber, The Associated Press
WASHINGTON — Companies that help businesses track and search their e-mails and other electronic data are experiencing a surge of interest in the wake of federal rule changes that clarify requirements to produce such evidence in lawsuits.
Companies used to be focused on how they store information. Now they're focusing on how to retrieve it.
HIT 'SAVE': If there could be a case, then don't delete that e-mail
The new rules, which took effect Friday, require U.S. companies to keep better track of their employees' e-mails, instant messages and other electronic documents in the event the companies are sued, legal experts say. They are part of amendments to federal rules governing civil litigation and were approved by the Supreme Court's administrative arm in April after a five-year review.
ViewWise can help Archive with E.A.Se
WHAT'S NEW.. Amendments to the Federal Rules of Civil Procedure (FRCP) PRIMER The Federal Rules of Civil Procedure (FRCP) govern civil procedure in the United States district courts. New amendments to the Federal Rules of Civil Procedure address the discovery of electronically stored information. On April 12, 2006, the Supreme Court of the United States approved and forwarded these amendments to Congress. Certain revisions to the Federal Rules of Civil Procedure address the preservation and discovery of data in electronic media, also known as e-Discovery. Electronic discovery (e-Discovery or ediscovery) refers to "any process in which electronic data is sought, located, secured and searched with the intent of using it as evidence in a civil or criminal legal case." In regards to ECM and ERM, the two rules to focus on are FRCP 26(b)(5) and FRCP 34(b). FCRP 26(b)5 deals with General Provisions Governing Discovery; Duty of Disclosure; Discovery Scope and Limits; and Claims of Privilege or Protection of Trial Preparation Materials. FRCP 34(b) focuses on the Production of Documents, Electronically Stored Information and Things. These amendments to FRCP address a common corporate problem: the volume of electronically stored information and its maintenance. During an electronic discovery process, all types of data serve as evidence such as text, images, calendar files, databases, spreadsheets, audio files, animation, websites and computer programs. Because of lax corporate management, email is often the most valuable source of evidence in civil or criminal litigation. "All organizations should proactively prepare for the amendments," warns AIIM President John Mancini. "The new rules will require businesses to have continuous, ready access to, and control of, all electronically stored information that may be relevant to the discovery phase of the litigation process." published by AIIM - the ECM Association Download Amendments to the Federal Rules of Civil Procedure (FRCP) How do I prepare my organization for e-Discovery requirements? Computhink can help with our line of Email Archival Products. |
Companies and other parties involved in federal litigation must now produce "electronically stored information" as part of discovery, the process by which both sides share evidence before a trial. Federal and state courts have increasingly been requiring the production of such evidence in individual cases, and the new rules clarify that the data will be required in federal lawsuits.
Under the new rules, an information technology employee who routinely copies over a backup computer tape could be committing "virtual shredding" once a lawsuit has been filed, said Alvin F. Lindsay, a partner at Hogan & Hartson LLP and expert on technology and litigation.
Companies still could routinely purge their archives if the data aren't relevant to cases companies have pending or expect to face, though specific sectors such as financial services remain governed by other data-retention rules.
Company lawyers and information-technology staff will have to work more closely together to ensure that routine erasing of backup data doesn't pose legal problems, Lindsay said, while also ensuring that lawyers know where their company's data are stored.
The new rules make it more important for companies to know what electronic information they have and where, especially because of a provision that requires lawyers to provide information much earlier in a lawsuit than before.
Many large companies "don't know what they have" and are therefore unprepared if they are sued, said Marie-Charlotte Patterson, vice president of market strategy for AXS-One Inc., a Rutherford, N.J.-based records compliance management firm.
Without a better sense of what data they have and where, some companies settle lawsuits in order to avoid the costs of electronic discovery, she said. Better organization of the data can lower that cost and enable companies to avoid settling.
"The need from the get-go to better manage that electronic data has become paramount," she said.
Some companies have paid a steep price for failure to preserve electronic information. In one high-profile case last year, former UBS AG equities trader Laura Zubulake won a $29 million award in a federal gender discrimination suit. The presiding judge penalized UBS for failing to recognize that missing e-mails would end up being relevant to future litigation.
Large companies are likely to face higher costs from organizing their data, said James Wright, director of electronic discovery at Halliburton Co. Besides e-mail, he said, companies also will need to know about things more difficult to track, like digital photos of work sites on employee cellphones and information on removable memory cards.
There are hundreds of "e-discovery vendors" and these businesses raked in approximately $1.6 billion in 2006, Wright said. That figure could double in 2007, he added.
Lawyers may have to spend time reviewing electronic documents before turning them over, Lindsay said. Although electronic searches can help narrow the amount of data, some high-paid lawyers will still have to sift through casual e-mails about subjects like "office birthday parties in the pantry" to find the relevant information, he added.
But Martha Dawson, a Preston Gates & Ellis LLP partner who specializes in electronic discovery, said companies will not have to alter how they retain their electronic documents. Rather, she said, they will have to do an "inventory of their IT system" in order to know better where the documents are.
The new rules also provide better guidance on how electronic evidence is to be handled in federal litigation, including guidelines on how companies can seek exemptions from providing data that isn't "reasonably accessible," she said. This could actually reduce the burden of electronic discovery, she said.
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