The end of the paper trail

Imagine the scene: you are disgruntled with a supplier. You do your best to make sure your communications with them are measured and calm. Internally, though, you e-mail a colleague with some colourful language expressing your frustrations.

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Imagine the scene: you are disgruntled with a supplier. You do your best to make sure your communications with them are measured and calm. Internally, though, you e-mail a colleague with some colourful language expressing your frustrations.

You also send a message to one of your fellow directors bemoaning how long it has taken anyone at your end to pick up the problem and sort it out, and how you feel like sacking the useless employee responsible.

Jump forward two years: your e-mail to your colleague and the message to the other director are being read out in court. What you have said in them threatens to undermine your company's case against the supplier, and discredit you as a witness. How did this happen?

Changes to the court rules, which came into force in October, make this a more likely prospect than ever before. The new rules govern disclosure of electronic documents and explicitly cover documents that are contained on (or created by) not only PCs, laptops, databases and servers, but also back-up tapes, off-site storage, portable storage media, handheld devices, PDAs, notebooks and mobile phones.

The rules encompass e-mail, document, calendar, spreadsheet, graphic and presentation files and web-based applications. They also include the metadata that goes with the document, such as the "who" and "when" of its creation; access, editing and printing history; or, if it is an e-mail, who the bcc recipients of it were, for example.

Document disclosure

The definition of a document includes those that have been deleted. In some cases a business will have to commission a reconstruction, so it can demonstrate it has disclosed whatever relevant documents it possesses.

The rules state that each party  must disclose all documents that are relevant to the dispute, and each party must have undertaken a reasonable search for documents, including electronic ones.

The question of what constitutes a reasonable search is bound to be hotly debated, as each party tries to force the other to widen the parameters. The basic principle is one of proportionality - balancing the significance of what evidence might be found against the cost of recovering it, in the context of the issues at stake.

The argument that a very wide search is too time-consuming and expensive to undertake is unlikely to stand. The technology now exists to enable large quantities of data to be collated, filtered and produced.

It has been estimated that 93% of corporate documents are created, viewed and stored electronically, and 70% of those documents never migrate to paper. A simple trawl through the paper files in storage will no longer satisfy the court that you have taken the process seriously.

The rules now also require the parties to discuss what issues might arise relating to electronic disclosure at the beginning of the litigation. They will have to provide information about the types of electronic document they possess, the systems, devices and media on which they are stored, and the storage and retention arrangements they have made. They will also have to discuss the format in which electronic documents will be provided.

Damage control

Document retention and destruction policies are likely to become increasingly important. A case will not be helped if documents that may have been crucial to the dispute have been destroyed, and could or should have been kept.

This means it is well worth thinking now about how documents and electronic information are created, managed and destroyed, and what procedures are in place to stop your document destruction process quickly if litigation starts.

Businesses also need to control electronic security and lines of authority carefully. Metadata can be altered irrevocably if the document is handled incorrectly.

The courts here, like those in the US, may impose sanctions on a party that has attempted to alter a document's metadata. Those in authority need to be able to show that they did what they could to preserve both the document and its metadata intact.

With 66% of UK businesses becoming embroiled in litigation in the past year, one-line quips about serious business issues are now more risky than ever.

Jonathan Tardif is a litigation associate at international law firm Eversheds

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