Creating and managing records is an important part of business. Keeping records helps companies meet important directives: accountability, efficiency, protection of rights, legal compliance, and the ability to reconstruct the past. As business moves more rapidly to the cloud, the amount of information to track, maintain, and destroy has increased exponentially. When a business is involved in litigation, record-keeping becomes even more important. Consumers, employees, and suppliers conduct business in an almost entirely online fashion. The shift to data-driven business and a greater emphasis on corporate responsibility creates even greater imperatives and nuances to the world of information management. Having a practical and strategic preservation protocol is critical for both day-to-day operations and litigation success.
Day to Day Preservation Strategies
In creating an operational information preservation strategy, we suggest that businesses inventory (1) the categories of information they need to retain; (2) where that information is located; and (3) who controls that information.
What information you have
Operational and legal principles dictate different levels of preservation for different types of information. Types of information may include:
Where the information is
Remote working creates multiple access and storage points for a company’s electronically-stored information (ESI). A healthy preservation strategy accounts for all of these points: workstations, cloud storage, handheld devices, external storage systems, laptops, tablets, network servers, voicemail systems, leased storage space, and backup tapes. Even a simple protocol for maintaining email can have significant operational and legal benefits.
Who controls the information
A robust preservation strategy considers who and which departments create, receive, and maintain what types of information. Mapping your company’s information structure and communication protocols can help you develop a tailored, practical protocol.
Preserving information becomes even more critical when your company is involved in litigation.
Duty to preserve
A legal duty to preserve “relevant” information arises whenever litigation becomes “reasonably foreseeable.” In such cases, preservation becomes a specific response to a specific dispute or challenge. A company facing reasonably foreseeable litigation must immediately identify the types of information that may be implicated, the persons and departments who may retain or have access to such information, the best method to segregate and preserve existing information, and a strategy for segregating and preserving new information that may be created or obtained. This may include preservation of backup tapes, metadata, and even ongoing day-to-day routine communications. A written and specific litigation hold should promptly be issued to all potential holders of such information.
In federal court, and increasingly in state court, one of the first things a party must do in litigation is communicate with its adversary about its information structure. Parties must, or should, identify key persons with access to relevant information; how that information is stored; what types of information should be provided to the other side; and the best mechanism for providing information, which may involve a third-party vendor.
Often the biggest risk companies face in litigation comes from failing to collect the right information for the lawsuit. Understandably, businesses do not want to turnover their internal documents and ESI to a known adversary and, potentially, to the public. But a reticent approach to document discovery ultimately will cost a company money and time.
Consequences for noncompliance
Failing to preserve ESI or produce relevant information during a lawsuit can lead to disastrous outcomes, including an adverse factual inference, sanctions, or, in extreme cases, a judgment entered against the company.
In sum, developing a strategic and careful day-to-day information preservation strategy and following best practices for litigation can meaningfully reduce risk and expense and allow companies to focus on doing business.
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