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The Duty to Preserve Electronic Business Records
For companies in highly regulated industries, lawsuits and government investigations are a cost of doing business. This cost goes well beyond the fees for lawyers, experts and consultants. In the early stages of a lawsuit or investigation, much of it comes from the diversion of personnel from their business responsibilities to complying with requests for information made by an adverse party or the government. Instead of running the business, employees spend their time meeting with lawyers and reviewing historical records.
While there has always been a duty to preserve and produce documents and information relevant to a lawsuit or government investigation, the increased reliance of businesses on electronic communications and documents has altered traditional preservation and production practices. The standards that courts expect businesses to follow were closely examined in two recent decisions by U.S. District Judge Shira A. Scheindlin, whose earlier opinions in the same case addressed novel issues of how the costs of electronic discovery should be allocated. As with those prior decisions, the two recent opinions could contribute to a national standard on a business's obligations with respect to electronic recordkeeping and production during litigation. Although Judge Scheindlin's rulings were made during civil litigation, the same preservation and production standards could well apply in a government investigation.
Background of the Lawsuit
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