Corporate attitudes and spending on the management
ofelectronically stored information (ESI)for legal and regulatory matters are changing. This change
in attitude is propelled in part by regulatory changes and judicial
interpretations related to ESI in litigation in the UK and US.
High-profile cases such as Enron and Worldcom are influencing
senior executives because of costly fines and the negative impact
on shareholder value related to the failure to properly comply with
a duty to preserve ESI.
The process of managing ESI for legal and regulatory matters is
referred to as
e-discovery. There was an increase in the use of e-discovery
systems in 2007 by UK companies, growing from 8% in 2006 to 71% in
2007 according to a recent study. The study also reported that
regulatory matters topped the list of litigation in the past year
in the UK and were the area of most concern to corporate counsel
(53%). Securities litigation was the second greatest concern to UK
companies and the second most common type of legal matter.
The US eDiscovery Amendments to the Federal Rules of Civil
Procedure (FRCP), effective December 2006, put a focus on an
organisation's ability to demonstrate proactive, routine and
good-faith management of ESI in the face of discovery, particularly
as European companies operating in the US are subject to the same
regulations as their US counterparts. This is having an impact on
how UK enterprises manage information in relation to their risks
and liabilities. Organisations now have to think about their data
in terms of the evidence they hold in addition to its business
value.
Sorting through the huge and growing amount of ESI that most
organisations possess is not easy, and the limitations of legacy
technologies and isolated e-discovery tools are increasingly being
exposed. In the next 12 months, we will see UK companies falling
prey to legislation if they cannot uncover all ESI potentially
relevant to a legal or regulatory matter within a specified
timeframe. A US judge has already stated the importance of
producing data that is conceptually and contextually important to a
case. ESI could soon become the Achilles' heel for organisations
that fail to confront this now.
Regulators and courts expect organisations to preserve, search
and retrieve information from all potentially relevant sources
using modern methods, such as keyword and conceptual analytics.
Technology that can discover potentially relevant information and
automate what has traditionally been a laborious process promotes
best practices and protects organisations from risk. UK companies
are already recognising this need and are looking at new approaches
for proactive information risk management.
By Deborah Baron, director, Electronic Discovery Zantaz, an
Autonomy Company