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Retention Policies & eDiscovery

by on October 27, 2008

The current preservation laws (which predate the more recent amendments to the FRCP) require companies to hold evidence (electronic or otherwise), not from when a case is filed, but rather from when litigation first becomes likely.  This translates into a hold, or freeze, on a company’s retention policies.  Preservation laws, along with concern of adverse inference (the assumption a company intentionally destroyed information that may be seen as damaging to their interests), create pressure on a company to have solid, reliable management of its electronically stored information (ESI). 

But must a company produce everything? Part of the amended FRCP (Rule 26(b) 2(b) includes provisions for companies who no longer have access to information needed for the discovery process. Companies who can show that data was destroyed due to standard retention policies that are regularly employed in the company, may not be liable for that lost data (creating, in effect, a “safe harbor” for companies).  Similarly, a company may show that the cost of accessing its electronic data is unreasonably burdensome.  For now, though, what constitutes “unreasonable” is open to broad interpretation and varies from court to court, case to case.  Companies have already faced the sting of stiff fines and even lost entire cases, simply due to an inability to produce relevant data.

In my next post, I’ll talk about the how these rules will affect they way you do business.

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