Electronic Data Records Law | How to Win E-Discovery

International E-mail Deletion

Computer Spoliation in Asia

Electronic discovery (EDD*) and the destruction of digital evidence are global issues, affecting more than just North America.  Throughout the world, electronic records are ubiquitous, and mushrooming in volume.  Any law enforcement investigation in the world – whether a lawsuit, a tax audit, a police inquiry, an arbitration proceeding,
a legislative hearing, an administrative probe or a government inspection – is likely today to seek access to electronic records (email, databases, flash drives, text messages, facebook posts, youtube videos, digital photographs, laptop hard drives, and more).

Naturally, to thwart an investigation, an unscrupulous holder of e-records (ESI) wants to destroy them.  In the US, we call that destruction “spoliation” or “obstruction of justice.”  Other jurisdictions may use different words for unlawful destruction of evidence, but the general concept of law must be universal.  If law enforcement is to function, it must forbid and punish wrongful destruction of electronic evidence.

Many of the leading cases punishing the destruction of computer evidence are American, and to a lesser extent Canadian.  But cases are emerging in other countries.  . . .
One such case before the Singapore High Court is K Solutions Pte Ltd v. National University of Singapore [2009] SGHC 143.  This lawsuit was a contract dispute involving IT services provided by K Solutions (KS) to a university.  Under the rules of discovery in the lawsuit, the university sought from KS certain email records, in addition to audio recordings of meetings between KS and university staff.

The court noted that Singapore rules of procedure (Order 24 rule 16(1) of the Rules of Court) require a litigant like KS to disclose relevant records to its adversary, the university.  Evidence in this case showed that KS had possessed numerous relevant electronic mail records and audio recordings, which it had not released to the university.  Although KS explained that some email records had been destroyed innocently under its policy of retaining e-mail only six months, the court was suspicious.  The court believed KS’s email destruction policy should have been suspended because KS knew that litigation was likely.  (In other words, using American parlance, KS should have applied a “litigation hold” on the email.)

The court observed that although the rules of procedure do not explicitly forbid a party from destroying records, the rules imply that records should be preserved when litigation is pending or anticipated and that wrongful destruction should be punished. 

As the court considered KS’s deletion of email, it noted that KS, during the course of the lawsuit, had also been evasive and untruthful about its records.  The court levied severe sanctions against KS, effectively granting judgment against it in favor of the university.

Analysis:  From the perspective of any enterprise such as a business, law punishing the destruction of evidence is dangerous.  Digital records are destroyed constantly, in the ordinary course of operations. But the law may punish destruction if a legal authority concludes the destruction should have been avoided.  In any investigation the authority looks backwards and second-guesses what the defendant did in the past.  Retrospection is always how investigations like lawsuits or tax appraisals work.  With the benefit of hindsight, an action (or omission) of records management that seemed innocent to the defendant at the time can appear sinister later.   All enterprises (US and non-US) therefore need margin for error.  The law gives them incentive to be more generous in retaining computer records, especially electronic mail.  And the law gives incentive to keep email of important people much longer than six months.

–Benjamin Wright

Mr. Wright serves as a public speaker on e-discovery, e-records management and IT security law.  He speaks to professionals groups like Institute of Internal Auditors and SANS Institute.

*What is EDD?  Electronic Data Discovery is a relatively new legal term of art.  It refers to the process of finding, managing and disclosing electronic records (whether on a tape, a PC, an iPod, a cell phone or whatever device) as required in a lawsuit or legal investigation, such as a regulatory audit.

Alternative Dispute Resolution eDiscovery

Global Electronic Mail Record Retention-Destruction Policy

E-discovery (EDD) is a topic of growing importance in international dispute resolution. Although the US courts are considered the hotbed of e-discovery (along with, to a lesser extent, the other common law-based courts of UK, Canada and Australia), the topic cannot be ignored anywhere in the world.  For this reason, foreign (i.e., non-US and non-English tradition) organizations have growing reason to retain plentiful e-mail records, even if they have little or no exposure to the jurisdiction of US or other English-tradition courts.

Item One: The Chartered Institute of Arbitrators (known as CIArb, based in London) has published the Protocol for E-Disclosure in Arbitration.  In general, the Protocol is akin to the 2006 e-discovery amendments to the US Federal Rules of Civil Procedure. It confirms that “e-disclosure” (British for “e-discovery”) is a legitimate, even common issue in modern business-commercial arbitration, regardless of whether the common law countries (e.g., US, UK, Canada, Australia, New Zealand and in Asia Signapore) are involved. Further, similar to amended FRCP 16(b) and 26(a) & (f), the Protocol urges parties to confer early and often on e-discovery issues and seek to reach agreement on matters such as the scope, method and cost of e-discovery. And, similar to amended FRCP 26(b)(2), the Protocol presumes that hard-to-reach e-data (electronically stored information or ESI) are outside the scope of disclosure, though the presumption can be overcome.

Item Two: Could the e-discovery law of American courts hold that a continental European government, which hails from a civil law tradition (sometimes called the Roman law tradition), spoliate e-mail records?  The glaring answer is yes. In Reino de Espana v. American Bureau of Shipping, 2006 U.S. Dist. LEXIS 81415 (S.D.N.Y. Nov. 3, 2006), the national government of Spain sued a US enterprise, in US federal court, regarding an oil spill near Spain.  But as Spain initiated this lawsuit, it failed internally to implement an effective litigation hold on its own e-mail records. Spanish government computers lost, destroyed, deleted, erased relevant records.  The US court ruled that the government of Spain was at fault for spoliation.  

The law of spoliation is a key reason that US institutions have learned that generous, centralized retention of e-mail is today wise. The Spanish government has now learned the same lesson.

Update: Practical experience in Germany shows that businesses are, legally-speaking, wise to keep their e-mail records.

–Benjamin Wright

Network Backup as E-mail Repository

Expensive E-Discovery (EDD) for an Enterprise

IT network backup can store many e-mails that are relevant and discoverable in a lawsuit.  But to search for e-mail by way of network backup is very inefficient.  

Sometimes, courts do order organizations to go into backup to retrieve computer records - to the vexation of the IT department. The risk that such an order might someday come is one reason for an enterprise to keep plentiful e-mail archives in a system specifically designed for storage and search of large volumes of records.

This risk applies to lawsuits both in the US and elsewhere. A case in point is the Australian decision BT (Australasia) v State of New South Wales & Telstra, [1998] FCA 363 (9 April 1998). 

In a commercial dispute between telecommunications carriers, the plaintiff demanded e-mail records from defendant Telstra. Telstra’s records of many of these e-mails were available only in network backup. The court ordered Telstra to search backup tapes, at considerable expense, to retrieve certain e-mails.

Telstra did not have to design its e-mail system so that backup was the archive.  Had the company, as a matter of routine policy, treated its e-mails as durable assets of the company – preserved in an archival appliance that allows for easy records search and management – it would not have been forced to rummage through backup for e-discovery.  

–Benjamin Wright

Mr. Wright is an advisor to Messaging Architects, leader in email record retention, recovery and investigation.  See free, recorded webinar.

FRE 502 Electronic Mail | Federal Cases

Inadvertent Disclosure of Privileged Records in E-Discovery

Scrub EDD

A danger in e-discovery is that the party disclosing records will inadvertently give its opponent some that are protected by attorney-client privilege (i.e., attorney-client confidentiality) or as attorney work product.  E-discovery records are often so voluminous that privileged records might be turned over by mistake.

To address the danger Congress is adding Rule 502 to the Federal Rules of Evidence.  Effectively the new Rule provides that if a litigant inadvertently discloses a privileged document, he can still prevent his opponent from using it – so long as he took reasonable steps to prevent the disclosure in the first place. In other words, before releasing records, a litigant needs to make a reasonable search through them to cull out (screen) any that contain protected attorney-client communications (or attorney work product).  

Protection Denied

Such a search is not always easy.  In Victor Stanley, Inc. v. Creative Pipe, Inc., 250 F.R.D. 251 (D. Md. 2008), the defendant did search to cull or filter out privileged communications before delivering a mass of e-discovery records to the plaintiff.  But the cull was imperfect, and 165 privileged documents passed to the plaintiff.  

The defendant argued those 165 records should still be protected (i.e., the plaintiff should return them and refrain from using them), but the court disagreed.  The court said for those 165 documents the defendant had “waived” the privilege.  The court justified its decision by criticizing the methods the defendant used to cull out the privileged records, noting that simple keyword searches are known to miss things in electronically stored information (ESI).  The court concluded the defendant’s methods were not reasonable, as the defendant could not document it had designed and executed anything beyond a slapdash, rudimentary keyword search.

When Protection Applies

An explanatory note to new Rule 502 describes a good search:  “Depending on the circumstances, a party that uses advanced analytical software applications and linguistic tools in screening for privilege and work product may be found to have taken ‘reasonable steps’ to prevent inadvertent disclosure.  The implementation of an efficient system of records management before litigation may also be relevant.” --Explanatory Note on Evidence Rule 502 Prepared by the Judicial Conference Advisory Committee on Evidence Rules (Revised 11/28/2007)

Incentive for Searchable Archive

Accordingly, Rule 502 will give enterprises more reason to keep well-indexed e-mail records in an archival system that supports sophisticated searches and makes records about those searches as they are executed.* 

–Benjamin Wright

*Here is another reason for maintaning an email archive:  A competent email archive provides an enterprise a core group of records to search under an eDiscovery demand.  It enables the enterprise to say, in reply to the demand: "I can easily and inexpensively search this core archive.  It is not reasonable to expect me to search more deeply."