Several articles over the last few days have pointed out changing legislation impacting businesses, large and small: The new rules, which took effect on December 1, 2006, “require U.S. companies to keep better track of their employees’ e-mails, instant messages and other electronic documents in the event the companies are sued, legal experts say. They are part of amendments to federal rules governing civil litigation and were approved by the Supreme Court’s administrative arm in April after a five-year review.”
AP Business writer Chris Rugaber pointed out that “companies and other parties involved in federal litigation must now produce “electronically stored information” as part of discovery, the process by which both sides share evidence before a trial. Federal and state courts have increasingly been requiring the production of such evidence in individual cases, and the new rules clarify that the data will be required in federal lawsuits.”
“Under the new rules, an information technology employee who routinely copies over a backup computer tape could be committing “virtual shredding” once a lawsuit has been filed, said Alvin F. Lindsay, a partner at Hogan & Hartson LLP and expert on technology and litigation (…).”
The article goes on to quote Marie-Charlotte Patterson, vice president of market strategy for AXS-One Inc., a Rutherford, N.J.-based records compliance management firm: “Many large companies “don’t know what they have” and are therefore unprepared if they are sued.”
Without a better sense of what data they have and where, some companies settle lawsuits in order to avoid the costs of electronic discovery, she said. Better organization of the data can lower that cost and enable companies to avoid settling.
“The need from the get-go to better manage that electronic data has become paramount,” she said.