E-Anxiety by Greg Moore*

The term “e-discovery” is being used more and more frequently, causing “e-anxiety” among organizations and lawyers unsure about their new obligations and the consequences of not meeting them.  Fortunately, e-discovery rules, based on “reasonableness” and “good faith” rather than extraordinary efforts to deal with extraordinary amounts of new information, are emerging across North America. E-discovery refers to the identification, preservation and production of electronically stored information for use in the judicial process.  While this sounds straightforward, the exponential increase in document creation caused by email, word-processing, and other software and the ease with which electronic records are modified, saved and exchanged, has resulted in virtual mountains of documentation.  Even without litigation, organizations have to manage electronically stored information: where will it be stored, for how long, and by whom?  Once litigation is threatened or begun, those concerns become more acute because of the need to retain documents that will help your case and to rebut any accusations of wilfully destroying documents that could hurt you.

Because electronically stored information is routinely erased or written-over in the normal course of business, organizations should impose a “litigation hold” whenever litigation is anticipated or initiated.  This company order alerts employees to preserve relevant information.  It raises three important considerations.

First, it is the probability of litigation, not the possibility, which organizations have to address.  The need for a litigation hold should be determined by someone with the experience to evaluate whether a situation is serious enough to warrant one. 

Second, legal counsel should be consulted regarding the scope of the litigation hold.  The relevance of electronically stored information will depend on the legal and factual issues raised by the case and will not necessarily include every single document produced during a particular period of time or for a specific project. 

Third, organizations should form e-discovery teams made up of IT personnel, legal counsel and staff familiar with the issues.  The team will determine which information is relevant, who is likely to have it, how to search for it, and how to preserve it.

An organization’s litigation hold policy should be in writing, as should the steps taken to implement it in every particular case.  This will help neutralize any allegations by the opposing party that you have not done enough to preserve relevant and useful information.  If the Court finds that you have not made reasonable and good faith efforts, it could award costs against you, shift the burden of proof (rather than having the other side prove that you did something, you will have to prove that you did not do it), or find you liable of the willful destruction of evidence.

The cost of not having an e-discovery policy far outweighs the cost of implementing one.  An American investment firm which failed to identify and produce relevant emails recently agreed to pay $12.5M to settle claims in one case and was ordered to pay $1.5B in another!

* Mtre Moore heads the litigation group at GGD.