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Companies unprepared to comply with new electronic discovery rules

Amendments to the Federal Rules of Civil Procedure pose IT challenges.

By , Network World
November 30, 2006 02:47 PM ET

Network World - Organizations are woefully unprepared to comply with amendments to the U.S. court system’s Federal Rules of Civil Procedure that call for businesses to retain and be able to produce electronic records, recent studies show.

The new rules, which were approved by the U.S. Supreme Court in April and will take effect on Friday, require any business that could be involved in litigation in federal court to retain electronic records — such as e-mails, instant messages and text documents — and be able to retrieve them if economically feasible. The rules also require company attorneys and IT managers to be able to show how electronic records are stored, what mechanisms are in place to retrieve them, and when and how they are deleted (see graphic).

Required procedures
Amendments to the U.S. court system's Federal Rules of Civil Procedure call for businesses to retain and be able to retrieve electronic documents.

Amendment Effect on IT
Rule 16(b): A description of all electronically stored information must be presented within 99 days of the beginning of a legal case. E-mail archiving and retention software and policies should be put in place.
Rule 26(a): Electronically stored information, including e-mail, must be searched without waiting for a discovery request. IT should put in place e-mail archiving and retention policies so information can be discovered rapidly.
Rule 26(b): A party need not provide discovery of electronically stored information . . . if there is an undue burden or cost. Requires the organization to prove that putting in e-mail archiving software is an onerous expense.
Rule 26(f): Requires litigants to discuss any issues relating to preserving discoverable information. Requires legal counsel to know how e-mails are being retained and how they can be searched and retrieved.
Rule 34(b): Requires requesting party to designate the form in which it wants electronically stored information to be produced; requires the responding party to identify the form in which records will be produced. IT must be aware of how e-mails are stored — on disk or tape, for example — and how they will be retrieved.
Rule 37: Establishes a safe harbor provision for deleting records. Lets IT establish policies for the deletion of e-mail.
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Virtually all businesses are affected by the new rules, analysts say. Companies involved in litigation related to lawsuits that cross state lines, Internal Revenue Service actions, and Health Insurance Portability and Accountability Act or Sarbanes-Oxley violations, for example, are expected to comply. According to industry analysts, events requiring electronic discovery are becoming more common: A survey by Enterprise Strategy Group (ESG) shows that 91% of organizations with more than 20,000 employees have experienced an electronic discovery involving e-mail in the past 12 months.

Many businesses are not aware of the new amendments, however. Of 75 company attorneys surveyed by LexisNexis Applied Discovery, more than half weren’t aware of the Friday compliance deadline. Just 7% said their companies would be able to comply with the new rules.

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