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One of the most significant challenges facing commercial litigators today is persuading their clients to prepare for electronic discovery. Although most experienced litigators have an appreciation for the risks and opportunities presented by electronic discovery, clients often do not. Instead, clients may be understandably reluctant to expend time and resources on such an undertaking, especially if they are not routinely involved in litigation.
The first step to getting clients ready, therefore, is persuading them to do it. Although the risk-benefit analysis for each client will differ, there are at least five reasons why preparing for electronic discovery now will pay off later, in the event that the client faces either litigation or a governmental investigation.
1. Preparation will decrease the risk of the inadvertent destruction of relevant documents.
Given that sanctions may be imposed for a client's unwitting destruction of relevant documents, once the client reasonably expects to be involved in litigation or a governmental investigation, the lack of adequate safeguards can cause significant damage to the client's business. All corporate clients should adopt procedures that can be quickly implemented to prevent the destruction of electronic information that is potentially relevant to an actual or threatened dispute.
2. Preparation will decrease the risk of creating harmful documents that may support an opponent's claims or defenses.
Experienced litigators know that the best (or worst) evidence in a case is often found in emails, which frequently contain informal, candid, and sometimes damaging statements that are then saved on hard drives, servers, and backup tapes. Email also can be forwarded to other recipients without the sender's knowledge. (1) One of the biggest challenges for any business is to transform its workplace culture so that emails are used soberly and responsibly, with the knowledge that every email could be discovered and used against the client in future disputes.
3. Preparation will increase the likelihood that the client will preserve helpful documents necessary to support future claims and defenses.
Although clients may be tempted to adopt document retention policies that retain as few electronic documents as possible, such policies may result in the inadvertent destruction of helpful documents that the client will need in future litigation. Careful preparation now can increase the likelihood that such exculpatory information will be retained. (2)
4. Preparation may help the client to position itself to minimize the costs of electronic discovery.
Recent developments in case law suggest that courts are beginning to assess carefully which party should pay the costs of electronic discovery, and to shift those costs to the requesting party in certain circumstances. The costs associated with electronic discovery can be overwhelming, particularly since the vast majority of the documents created today are created electronically, and many of those documents are never printed and sent to a file. (3) By analyzing the factors that courts apply when deciding whether to shift discovery costs, clients may be able to take steps now that will reduce their future risk of being required to bear a disproportionate share of such costs.
5. Preparation will position the client to engage in electronic discovery aggressively, rather than defensively.
If the client is prepared, and the opponent is not, then the client can freely request electronic information from its opponent without reservations about responding to the same requests. In a world where few businesses are prepared to engage in electronic discovery, (4) the prepared client that can aggressively engage in electronic discovery will have a significant strategic advantage in any case.
Overview of Electronic Discovery
Any discussion of electronic discovery should begin with the understanding that clients have a duty to produce relevant, non-privileged electronic information requested in discovery. (5) That duty of production may be modified or eliminated if a client can show that producing the requested information would cause an "undue" burden or expense, (6) an objection that typically requires a detailed factual showing that the burden of production outweighs the requesting party's need for the information. Regardless of whether a client ultimately produces the requested electronic information or objects to making the production, the client and its IT personnel will often need to engage in a significant effort to determine what responsive information exists and what steps will need to be taken to produce it. (7)
Clients should also understand that they have a duty to preserve relevant electronic information once they are on notice that litigation or an investigation may occur. (8) Any failure to satisfy this duty may lead to criminal sanctions, (9) civil sanctions, (10) or discovery sanctions. (11)
In order to preserve and produce electronic information, clients and their counsel will need to become familiar with the many kinds of electronic information that exist, ranging from emails to backup tapes to digitally-stored voice mails. (12) Litigators and clients engaged in electronic discovery should be familiar with the following common technical terms and their meanings: (13)
1. Active Data consist of information readily available and accessible to computer users through file manager programs.
2. Back-Up Data consist of information copied to removable media in the event of a system failure, usually only of data on a centralized storage medium or network, and frequently in compressed form.
3. Embedded Data or Metadata consist of information contained within an electronic version of a document that may not be apparent in a printout, such as the date the document was created, the identity of the author, the identity of subsequent editors, the distribution route for the document, or the history of editorial changes.
4. Legacy Data consist of information stored on media that can no longer be accepted or organized in a format that can be read using current software.
5. Replicant Data are copies automatically made and saved to the user's hard drive.
6. Residual Data are deleted files to which the reference has been removed from the …