Electronic Records Management and a ‘Litigation Hold’

Electronic Records ManagementHow much do you really know about your electronic records management system – your backup? The verification for everything that your company has ever produced, financed, earned, disbursed or said.

If you can’t come up with an answer then it may be time to update yourself on California and Federal electronic records management laws – and your own records systems – because if you ever find your organization facing a lawsuit, you’re going to need them all.

Under both Federal and California state laws, parties to a lawsuit are now required to present electronically stored data during discovery. This means that whether you’re the Plaintiff or the Defendant to a suit, you’re going to be asked to provide your e-records as evidence. When companies don’t provide electronic records in today’s legal proceedings, the presumption is that you have something to hide and it can cause serious damage to both your case and reputation. After all, what relevant business doesn’t keep their records in the clouds these days?!

As an entrepreneur or investor in today’s digital world, then, you must balance the logistical need for routine document destruction with the legal requirement to maintain a robust electronic record of your company communications and documents in the case of an ‘anticipated litigation.’

The challenge is both in understanding the laws and in determining exactly when a lawsuit is ‘anticipated.’

A little background information first. A ‘Litigation Hold’ is when a company or organization employs a pre-determined set of policies and procedures for preserving all relevant documents, emails, voicemails and other electronic information when litigation is probable. In other words, you should have a protocol for what to do when your company is threatened with a lawsuit. If you don’t currently have such standards in place, speak with an experienced business attorney as soon as possible.

The first challenge then is knowing exactly when litigation is ‘anticipated.’ Some cases are obvious, such as if your company is subpoenaed or indicted. In such a situation, litigation is clearly expected. Your litigation hold should be implemented immediately and you should contact your business litigation specialist.

However, other occasions might not be so obvious. Perhaps your company received a threat from a disgruntled employee. Customarily, this might be cause for some alarm, but this particular employee has a history of making false accusations and empty threats. So, does his ‘threat’ reasonably cause your establishment to anticipate an actual lawsuit?

It’s not so easy to tell.

The other challenge is knowing what information to save. Trying to predict the full scope of a projected lawsuit is nearly impossible – even for the professionals. Facts, laws and circumstances are never identical, so it’s impossible to anticipate all discovery needs. For that reason, it can be problematic when you’re deciding what documentation to save. What’s relevant and what isn’t? How much do I need? Who should be included in the hold?

All fair questions. All difficult to answer.

Finally, comprehending the laws can be hard simply because they seem to constantly get modified – as does technology itself.

The most essential laws forming the foundation of California e-discovery guidelines are the California Electronic Discovery Act, the Federal Rules of Civil Procedure, Rule 34 and a few random pieces of California and Federal case law. Because the world of technology advances so quickly – causing our websites, email systems, accounting software, iPhones and everything else to update so frequently – it almost seems as though the law is always one step behind, struggling to keep up and place checks and balances on the ever-changing world of 21st century business.

Commerce moves at the speed of technology – and the law is not far behind. If you’re not keeping up and maintaining proper records, you could be putting your company or investment at risk. If a lawsuit isn’t on the horizon for you – first of all, congratulations – and second, don’t get apathetic! Take precautionary measures now to maintain that flawless reputation – such as being prepared with an effective ‘litigation hold’ strategy. Call the knowledgeable team at the Law Offices of Tony T. Liu for more details.