E-Discovery's Impact in Absence of Litigation

E-discovery started transforming disputes and litigation about 15 years ago.  The transformation continues.

E-discovery's effect reaches beyond litigation or government investigations.

E-Discovery Imposes Costs During Litigation

Today many complain about the costs of ediscovery when litigation is pending:

1.  Litigation Hold.  Some enterprises like Exxon Mobil Corp. expend great effort retaining electronic records under litigation hold, even though few if any of those records will actually be produced to an adversary in the course of a lawsuit.

2.  Find, Assess and Produce.  In the course of a lawsuit, some litigants spend fortunes digging through email and other e-records, evaluating them, culling them and producing the required ones

See “Meet the New Pack Rats,” Wall St. Journal, November 25, 2013.

E-Discovery Causes Reactions Outside Litigation

Yet the risk of ediscovery causes reactions even when litigation has not started and may never start.

Lawyer Reviews Email Pre-Dispute

These days it is common for a lawyer to help an enterprise client review an issue that theoretically could go to a lawsuit.  Inevitably that review will include reading the client’s internal emails.

In most any enterprise today tremendous details are documented in email.  That is just how an enterprise works, whether it be nonprofit, corporation or government agency.  Email is universal.  In the business world, everybody uses email to talk and to speculate.

Thus, as the lawyer reviews the issue with the client, she knows that if litigation were to arise (it has not yet), then the emails she is reading would come out.  At this point, to try to delete every copy of these email records might look like spoliation.*

Business people do not know how to write emails the way cagey lawyers write emails.  Commonly business people write emails that are very candid . . . maybe too candid.

But worse, business people can state legal conclusions in email (e.g., “we committed fraud”) that are inaccurate!  Business people will talk as though they know law and all of the facts, when in truth they do not.  And thus they create “smoking gun” records that would be hard to refute in court, even though the records are flat wrong.

So when the lawyer sees these inaccurate email statements of legal conclusion, she reacts.  She may determine that the client needs to

  • apologize, or 
  • correct the record, or 
  • take an aggressive stance relative to a potential adversary so as to reduce the possibility that the adversary would ever sue and discover the smoking gun

Cease and Desist Letter Now Includes Records Preservation Clause

When a lawyer sees an adversary doing something (e.g., breaching a contact) that hurts the lawyer’s client, often he will write a “cease and desist” letter to the adversary.  A cease and desist letter says, “stop doing what you are doing; otherwise we may seek legal recourse.”

These days a cease and desist letter may contain a new jab.  It may also contain a records preservation clause.  (Compare records preservation letter.)   A records preservation clause can imply quite a bit of trouble for the recipient of the letter.  The clause says, “Now that we have raised the threat that we might sue you if you don’t cease your errant behavior, we remind you that you should keep all records regarding this topic.  If you don’t keep those records and we sue you, then you might be punished for spoliation.”

In 2014 keeping all the records on anything can be lots of work and hassle.  The records could include email, but also spreadsheets,
text messages, internal social media discussions and more.  In practice many enterprises are not very talented at keeping such records.

The difficulty of keeping records after you’ve been warned to keep them creates risk.

This risk is one reason I tend to recommend that organizations keep generous, searchable email archives.

*Spoliation means wrongful destruction of legally-significant evidence.

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