As the digital age dawned a decade or so ago, few could have anticipated the way all these electronic communications would impact aspects of business that seemed disconnected - most notably the responsibility to preserve electronic data for potential discovery during litigation or government investigation and similar circumstances. The rules governing the preservation of e-communications such as emails or digital reports have gotten muddy and confusing, with the predictable result that many companies are choosing to err on the side of caution and simply save everything.
Small Fry Pay the Price
However, even this drastic move doesn't protect companies from sanctions - the rules governing preservation and sanctions are so poorly worded at the moment that judges have reacted in completely contradictory ways to spoliation - with some issuing no sanctions at all for willful loss while others impose hefty sanctions for obviously accidental data corruption or simple incompetence.
The fact is, preservation of electronic data is confusing to many companies that aren't technically versed, and the fact is that although larger companies spend much more on preservation (with larger companies routinely spending an average of $40 million each year), smaller companies suffer more because preservation costs represent a larger proportional part of their operating budgets, and they don't have in-house attorneys and IT departments to assist them. For small companies, preservation can become a business-killing nightmare.
New Rules
Luckily, changes to these preservation rules are looming. The Civil Justice Reform Group to the Civil Rules Advisory Committee has issued an executive summary of findings regarding revising these preservation rules, after its public comment period has ended. The proposed amendments would most notably change the rule intended to protect parties from "excessive" data demands designed to intimidate and strain resources. The new amendment language would be more stringent in defining what could be considered unreasonable.
If approved by the Advisory Committee on April 10, 2014 as well as the Committee on Rules of Practice and Procedure, the Judicial Conference, and the Supreme Court, the new amendments won't go into effect until December 2015. Even then, Congress retains the power to modify or completely reject them.
Still, in light of the fact that the rules fail to protect smaller companies - as they were designed to - it's clear that they must be altered. Preservation of electronic data should not be a weapon that can be wielded as extortion when trolls' or other bad faith litigants wish to avoid a trial.
(This blog article is based on the article entitled "As rule changes loom, report finds big business - and small - feel preservation squeeze" written by the ACEDS Staff last March 20, 2014, published on the ACEDS website: http://www.aceds.org/as-rule-changes-loom-report-finds-big-business-and-small-feel-preservation-squeeze)
James F. Page is a certified electronic discovery specialist. He is also approved as a certified mediator and has been helping individuals throughout Florida settle their disputes using mediation. Call 407-341-0069 to learn how mediation can help you or visit http://www.pagemediation.com for more information.
