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.

Tag Disclosed ESI | Privacy, Control, Security

Warn FBI, Auditor, Examiner, Adversary, Regulator, Investigator or Inspector General

Ediscovery Production Strategy-Services for Text, Email, Twitter, Facebook Google+ or Other Social Network Records

Subpoena . . . tax audit . . . court order . . . police raid . . . search warrant . . . criminal investigation . . . regulatory proceeding . . . administrative summons . . . grand jury inquiry . . . litigation discovery demand -- any of these could compel or motivate a party holding e-records to reveal or produce them.

But often the party that receives (or seizes) the records should be expected to safeguard them after they arrive.

Laws requiring the safeguarding of records are many and diverse.  One small example:  As a business discloses information to the federal government, it can (if justified) tag or annotate the information as a “trade secret.”  By so doing, the business warns government employees that they violate federal law (18 U.S.C. Section 1905) if they abuse the trade secret, such as disclose it to a competitor or to the news media.

Legally speaking, the tagging or annotating of records can be strategically powerful.  But when a large quantity of e-records (SMS, chat, e-mail, Web 2.0, iPhone, BlackBerry) is involved, manual annotation is laborious and expensive.

Emerging technology affords a solution.  Technology empowers producing parties to annotate (label, tag) records with ever-better precision and efficiency.

When records like instant messages are disclosed under law, it is becoming more common that they be disclosed in an electronic format that supports annotations, such as XML.

Electronic annotation (commenting) enables highly granular, specifically-targeted legal notices.  Targeted annotation can give the producing party an advantage.  The advantage is more apparent when large numbers of record are at issue and different records require different notices.

By long-standing practice, lawyers often mark disclosed records with warnings or reservations of rights. But historically these notices were expressed as general, blanket statements in transmittal letters. (See footnote.)

When numerous records are involved, blanket statements may not be as effective as specific, record-by-record annotations.   Suppose for example that five million email records are being produced.  Within those records are, say, 2137 that contain personally identifiable information (PII), which the producing party is obligated to safeguard.  The producing party may better fulfill its obligation by specifically annotating each of the 2137 with strong warnings, rather than with general notices covering the whole five million.  (Example:  “WARNING: This email may contain private data protected by law.  Access on need-to-know basis only.”)

Specific annotations can include any of a range of legal statements:  disclaimers, instructions, interpretations, cross references, self-serving language, reservations of rights, claims of privacy, contractual terms of use, designation as attorney work product and more.

According to Ranjit Sarai, e-discovery consultant at Messaging Architects, “Annotations can involve advanced services in e-record production.  Manual annotation of individual records can be very time consuming.  But we can recommend or develop routines for identifying relevant records and placing the prescribed annotations on them.  We can facilitate collaborative, team annotations.  We can also help bring the appropriate attention to annotations.  Some annotations should be understated.  Others should scream out in blinking neon lights.”

Update:  Tags and annotations can be inserted according to varying degrees of granularity, whether record-by-record, word-by-word, or something else.  US intelligence agencies are managing massive databases on terrorists by tagging each word, one-by-one.  A tag can show, for example, the level of security clearance an analyst needs in order to see the word.  Advanced search software can prevent an analyst from seeing information for which he does not have adequate clearance, while alerting him that the database may contain additional information relevant to his inquiry, access to which will require higher authority.   Siobhan Gorman, "How a Team of Geeks Cracked Spy Trade," Wall St. J., 4 Sept. 09.

–Benjamin Wright

Mr. Wright delivers education on cyber defense law under the SANS Institute.


Footnote:  A case known as Teachers Insurance(1) suggested that when a company discloses information to the Securities and Exchange Commission, it waives attorney-client privilege on that information, unless it explicitly reserves its privilege rights.  Applying that idea, a company in another case(2) attempted to make such a reservation of rights in the transmittal letter sent with documents disclosed to the SEC. 

(1)Teachers Insurance and Annuity Assn. of America v. Shamrock Broadcasting Co, 521 F. Supp. 638 (SDNY 1981).

(2)In re Subpoena Duces Tecum to Fulbright and Jaworski and Vinson & Elkins, 183 Fed. Sec. L. Rep. para. 99,505 (DDC 1983).