Europe: E-mail Record Retention Policy

Storing Business Text Messages

In the US, a process known as “e-discovery” is requiring litigants to search for and disclose large numbers of electronic mail records in lawsuits.  Penalties related to e-discovery motivate organizations to retain an ever-growing quantity of e-mail records.

In civil law jurisdictions in Europe, however, e-discovery is not compelling businesses to retain email as it is in the US.

However, research suggests that European companies are wise or required to archive e-mail records.

Société Générale/ Jérôme Kerviel

See the discussion of the Société Générale/ Jérôme Kerviel case.  (I read it by using Google to translate from French to English.)

Société Générale is a large French bank. Jérôme Kerviel was a rouge trader who exposed the bank to potentially many tens of billions of euros in liability.

The case may be a landmark in French thinking about record retention.  The bank had, in the ordinary course of business, retained Kerviel's email and text message records.  As the scandal broke, at first the bank was reluctant to read his message records out of concern for his right to privacy. But the bank quickly dismissed that concern.  The bank read his messages so that it could understand what he had done and what commitments he had made on behalf of the bank and then to correct his dangerous misadventure.

The lesson seems to be that companies in continental Europe do need to keep the records of important employee email and text messages so that the companies can understand their rights and responsibilities and to correct mistakes.

Requirement to Keep Records of Rights and Obligations

My friends in Europe inform me that civil law jurisdictions often require companies to keep records of their rights and obligations for numerous years.  For example, I generally understand from Polo G. van der Putt of the Vondst law firm in Amsterdam that Dutch Civil Code Article 3:15i states an obligation for companies to keep for seven years “books of financial condition and of everything relating to the company and to retain records in such a manner that its rights and obligations can be determined at all times.”  Further, Article 2:10 paragraph 3 requires seven-year retention for “All books, records and other data carriers which relate to the financial condition of the legal person and everything relating to its activities.”

It seems to me that email would commonly constitute the records evidencing the rights and obligations of a company or business. See Article 9 of the EU Directive on Electronic Commerce 2000/31/EC, which supports the formation of contracts by electronic means such as email.

Punishment for Not Having Records

I am in search of European cases in which businesses have been punished for failing to keep electronic records.

Research in Switzerland, under the guidance of Dr. Jürg Schneider, Walder Wyss & Partners Ltd., identified a case in which a criminal defendant in a conspiracy and money-laundering prosecution had violated his obligation to retain records by destroying many electronic documents at his company.  The court found that by destroying records the defendant had hindered a criminal investigation and was therefore required to pay the full costs of the proceedings against him.  (In the US and Canada, we would call the defendant’s action the crime of “obstruction of justice.”)  The citation for the Swiss decision is SK.2008.18; it is a decision by the criminal division of the Federal Criminal Court of July 8, 2009.  The decision is available in German on the web.

This Swiss decision points up a issue for organizations as they set policy for email retention and destruction.  If the law will punish you for destroying records when you have reason to believe they will be needed in an investigation or lawsuit, then your policy for destroying email must be ready to stop the destruction at the right time.  In practice, knowing when to stop, and then actually implementing the stop, are not easy for complex enterprises. 

My knowledge of law in civil law jurisdictions is limited.  If you the reader know more information or cases on this topic, I invite you please to let me know.

–Benjamin Wright

In partnership with Messaging Architects, Mr. Wright leads in-house workshops to help organizations establish policy on the retention and destruction of electronic records.

New for 2012: Methods for reliably capturing and preserving text messages for audit and legal investigations.

Comments

[Stephen W. Harris]

Talk about "big, intrusive government regulation!" The definition you quote of required record keeping could conceivably include almost every company related e-mail sent or received by at least management level employees. Rumors or confirmations of mergers or aquisitions, change in senior mangement, plant openings/closings,the status of pending or potential lawsuits, budgetary matters... Where does the list end? Just as "party admissions" can only be attributed to management/policy making personell as to the corporation (or to a specific employee concerning the scope of his employment) isn't it reasonable to at least limit the class of employee who's communications must be saved? How does the company police/enforce the rule as to dozens or thousands of employees? (I presume you have some ideas.) And as to the type of communications, this trial lawyer would argue that the European definition is "vague and ambiguous" and amounts to a "fishing expidition" into corporate records w/o further specificity. Finally, regardless of the size of the entity (i.e., the bigger the corp. the more employees available to commit to document searches) I would hope the good ole "unduly burdensome" objection would provide some protection in most courts if a party simply copied the statute verbatim in drafting his request for production.

[Benjamin Wright]

Good points, Mr. Harris. You observe a classic clash between traditional record retention laws and the modern reality of electronic communication. Traditional laws were written when business was conducted on paper, and records were relatively few. Today, e-messaging like email creates far more records -- relevant and important records -- than was possible when business was conducted on paper. I argue that the law (US and elsewhere) gives organizations incentive to store lots of email (especially email of people like managers who are making important decisions) for substantial periods of time. Technology makes it increasingly practical to capture, store and manage large quantities of email. --Ben

[GregBufithis]

The English version of the Babel-Law article you cite can be found here:

http://www.projectcounsel.com/?p=671