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In today's digital world, corporations must manage data in a manner that mitigates legal risk and reduces the likelihood of sanctions for failure to safeguard and preserve electronically stored information (ESI) that is potentially relevant to a legal or regulatory proceeding. Approximately 40% of all e-discovery cases in 2009 involved claims for sanctions against parties that allegedly failed to comply with discovery obligations. Of the sanctions cases, 67% addressed an alleged failure to properly preserve ESI. See Kroll Ontrack's 2009 Year in Review Report, available at www.krollontrack.com/news-releases/?getPressRelease=61396. This growing body of statutory and common law regarding electronic discovery instructs litigants that the best defense against sanctions is to take proactive measures to fully comply with future discovery obligations. Ignorance or lack of preparation are no longer tolerated, and there is decreasing protection for preservation mistakes, oversights or intentional destruction activities.
Facing the Risks
Corporations that are heavily regulated and targeted in litigation face increasingly significant risks that are inextricably tied to information management and data storage. The tendency to over-preserve electronic data leaves organizations with mountainous volumes of ESI and an attendant increase in risk and cost, while inadequate policies, processes and tools often lead to wrongful destruction and possible spoliation sanctions. Meanwhile, some corporations spend considerable sums on one-off tools that can identify and “hold” content, while failing to address the policies and risks associated with the native systems where the content actually lives. Corporations that fail to leverage enterprise-wide technology to manage data or invest in tools that over-promise and under-deliver bear the burden of inflated costs and increased risk associated with responding to litigation or regulatory inquiries.
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