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Sarbanes Oxley : Law : Thought Leader
New Federal Discovery Rules are Coming. How Can IT Get Ready?
By
Kevin Roden
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Kevin Roden
Executive Vice President and Chief Information Officer
Iron Mountain
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The Federal Rules of Civil Procedure (FRCP) govern court procedures for civil suits brought in federal courts. Rules 26 and 34 of the FRCP specifically cover discovery and disclosure of information that is relevant to civil suits.
Discovery is the part of the litigation process in which opposing parties exchange relevant information and testimony. Discovery helps both sides understand the facts and evidence before the trial starts. On April 12, 2006 the Supreme Court approved proposed amendments to these rules to address discovery issues that are unique to electronic discovery.
Unless Congress acts to change them, the proposed amendments will become effective on December 1, 2006. These amendments will increase the pressure on corporations to proactively manage the electronic discovery process to avoid sanctions, unfavorable rulings and a loss of public trust. Corporate IT departments should begin preparing for these amendments now. This article provides a brief overview of four key amendments that impact IT, followed by the specific steps for IT preparedness.
Electronically stored information requires special attention in litigation
The proposed amendments recognize that computer data is as important as any other form of information and that ?the discovery of electronically stored information raises markedly different issues from conventional discovery of paper records."
The amendments will require that if your company is engaged in a law suit, prior to a discovery request you must furnish to the other party a description of electronically stored information that your company plans to use in its case. In addition, your company will be required to expand the scope of their potentially relevant data sources to include all media and all formats, including backup media, portable media, remote or third-party locations, etc.
Be prepared for early discussions on electronic discovery
The amendments will require your company to be prepared for discussions on electronic discovery prior to the pre-trial conference. Topics to be discussed include the form of production of electronically stored information and the preservation of information. Obviously, in order for your counsel to discuss these matters intelligently, records management and IT must have made available all relevant electronically stored information for the attorneys to review.
You will be responsible for identifying all potentially relevant sources of information
The amendments state that if your company is responding to a discovery request, it need not furnish electronically stored information that is not reasonably accessible because of burden or cost. However, you must identify all potentially relevant sources of information, and state when you are not providing information because of burden or cost. The other party in the law suit may then ask the court to compel your company to produce the material, and in that event, your company will have the burden of showing unreasonableness due to burden or cost.
A new safe harbor provision still requires proper litigation hold notices
The amendments state that absent ?exceptional circumstances? you will not be subject to sanctions for failing to produce email or electronic documents ?as a result of the routine, good-faith operation of an electronic information system.? However, the rules make it clear that ?good faith? may involve a requirement that IT intervenes to modify or suspend automatic overwriting or deletion functions to prevent the loss of information that is related to a pending case. That means you will still be required to halt automatic deletion programs or overwriting to preserve potentially relevant data, so it is not clear what impact the ?safe harbor? will have.
In short, these amendments will require continuous, ready access to and control of all the electronically stored information that may be relevant to a case. It will be difficult if not impossible to create ready access and control after litigation has started. Here are the specific steps IT should take to be prepared:
#1 - Map out all places where electronic information is stored
Not just email servers and backup tapes, but any data source including deleted data, data on systems no longer in use, data in remote or third-party locations, copies of production data used in demos, test systems or the like. Companies that don't have a complete map of potentially relevant data will put themselves at an early disadvantage.
#2 - Update your records retention policy to include all electronic information
Corporate retention policies should be applied to email and other electronic records. This step can significantly diminish your company's litigation risk and lower your email storage costs. Remember that your retention policy needs to specifically address how email backup tapes are handled. By establishing a consistent email retention policy across your organization you can ensure that the necessary emails are being retained and that the majority of emails, which are not official records or required to be preserved for litigation holds, are purged on a regular basis.
#3 - Ensure your litigation hold policy fully covers all electronic information including backup tapes
Make sure your litigation hold policy document includes rules for all relevant electronic records, such as email, electronic documents, scanned documents, and backup tapes. Ensure that all IT system administrators understand how to implement the hold policy for all IT systems and that the policy includes backup tapes to ensure they are not deleted or overwritten as part of the normal tape rotation process. To aid in turnaround time for the discovery process, select a vendor ahead of time to handle data restoration from tapes. Ideally, the restored data and files would then be transferred to a digital archive to enable search or assisted discovery.
#4 - Establish systems that simplify identification, retrieval and production of potentially relevant data
Evaluate how you can organize your data storage to proactively prepare for electronic discovery requests. For example, consider migrating identified records from backup tapes to a searchable, Web-based repository. Potential discovery records that were virtually inaccessible on backup tape would then be accessed anytime, anywhere. This would allow your response team to respond quicker and more efficiently. Your team could assess your legal exposure at the first sign of pending litigation.
Don't wait until December - start now.
The electronic discovery amendments are on schedule to take affect on December 1, 2006. Executing these four proactive electronic discovery steps is crucial to avoid potential sanctions, big fines and risks to your corporation's brand.
1The report of the Judicial Conference Committee on Rules of Practice and Procedure
Kevin Roden
Executive Vice President and Chief Information Officer
Iron Mountain
Kevin B. Roden joined Iron Mountain as executive vice president and chief information officer in 1999. Previously, Roden was CIO with Fleet Boston Financial, for the banking subsidiary. He has held numerous technology and management positions in a 20-year career at BankBoston, including executive director of U.S. technology.
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