By Evelyn R. Storch, ESQ.
Podvey, Meanor, Catenacci, Hildner, Cocoziello & Chattman, P.C.

What is it that can befall you? If you are unprepared and lack knowledge of electronically stored and transmitted information, you can be the target of an investigation or the victim of sanctions in litigation.

Electronically stored information is everywhere. E-mail, in particular, has overtaken other avenues as the preferred means of communication because of its speed and informality. It is just that speed and informality which makes e-mail a trap for the unwary. From Fortune 500 companies to closely held corporations and even sole proprietorships, organizations are becoming increasingly aware of the need for a comprehensive data handling policy. The adoption of such a policy, before the onset of litigation or, worse yet, a governmental investigation, can be outcome determinative.

A workable electronic data retention/destruction policy must start with an inventory: what do you have and where/how is it stored? What are the automatic retention or destruction procedures? If you were to need to preserve electronic data, who would be responsible and how would it be accomplished? When you can answer these questions, you are ready to create an enterprise-wide policy that has the backing of senior management, will meet the needs of your business, and still will allow for the efficient preservation and production of data if the need arises. The need arises when you know or reasonably should know that there may be a claim or investigation. Once the duty to preserve arises, you must stop all destruction of data that may be relevant to the claim or investigation, especially data possessed or used by “key players” – those at the epicenter of the claim or investigation. Relevant data then must be reviewed and produced during the litigation or investigation.

A breach of the duty to preserve exposes your organization to sanctions ranging from mere delay to permit the adverse party to secure alternative evidence, to substantial fines, to witness or issue preclusion, and even to dismissal (if you’re a claimant) or judgment (if you’re a defendant). Costs of electronic discovery can be staggering, especially if an organization must redo its searches and reviews due to missing data.

Preparedness not only avoids catastrophic results, it creates efficiencies and strategic advantages. For example, there are mechanisms for cost-shifting when a party must produce inaccessible data, but one must be ready to establish the burden to acquire the information. Readiness also provides your counsel with strategic advantages, which she can exploit to streamline the process, to save your organization money and to leverage toward a successful resolution.

In this brief article, we can raise only some of the critical issues that must be addressed. The time to tackle them is NOW, before litigation or investigation. You don’t want to be the next Houston DA or Detroit mayor or corporation with the problem.