Your Business Case Of The Week: Avoid ESI Spoliation Penalties!

Peter Kurilecz brought to my attention on Twitter this lovely little nugget about possible new precedent for discovery of electronically stored information (ESI). For our readers who are new to the records management (or legal) profession, discovery is a phase of civil procedure in which parties disclose records relevant to the case to the other party. This is not an optional step in the process; in most cases, the attorneys of the two parties in a civil suit will have a “meet-and-confer” session in which they agree on the terms of what records will be produced. This can be either a general request (“Give me every email you have relating to John Smith” or a specific set of keywords, depending on the level of granularity sought. The author of this piece, Ralph Losey, suggests that future cases will tip towards the specific:

…[M]ore and more courts are requiring the responding party to go the extra step and disclose what searches they did before they concluded that no responsive documents existed. Do not expect that these efforts will always be protected by attorney work-product confidentiality. Expect instead that you will be asked to disclose your search efforts. 

This is potentially a huge amount of extra work for both records managers and legal teams. In particular, if your search methodology is particularly lacking, or if there is reason to believe the records being sought were destroyed improperly, your institution may have to pay spoliation penalties, or have an “adverse inference” lodged against it (in other words, the court will assume the documents were destroyed because they showed some measure of guilt.)  Famously, accounting firm Arthur Andersen had a huge judgment rendered against it for advising its employees to improperly dispose of documents; in the Records Management world, there is the Zubulake case, which set a number of important case law precedents on spoliation, including the ability to impose sanctions for spoliation of digital material, often referred to in legal contexts as ESI (electronically stored information). Needless to say, spoliation is a Very Bad Thing.

“But Brad,” you say, “isn’t this a legal issue, and therefore my institution’s lawyers will know about it?” Well, yes, but that doesn’t mean you don’t have to know about these issues. As a records manager, your creation of records schedules is in large part allowing your institution (and employees thereof) to defensibly delete records. Proper records management allows your institution to invoke Safe Harbor rules, which reduces your institution’s legal liability if they were following records management procedures. Note, however, that the mere fact of having records schedules isn’t enough to invoke this principle– Arthur Andersen, after all, had records schedules in place. Rather, your institution must be following the records schedules as part of the course of regular business.

What this means for you, the records manager, is that your efforts to educate your employees are actually an essential part of protecting your institution from risk invoked by destruction of records. The fact that you are out there instructing employees to follow retention schedules, manage email as records, and only keep documents for as long as their retention schedule specifies, is itself evidence that your institution is properly following records management procedures. As such, you can make a case that a robust records management program reduces the risk of legal action by its very existence. Plus, if records are being destroyed routinely and organized in a fashion that makes them easier to find, that’s less work that the legal team has to do when a request does come in!

(Having said that, “Do this or you’ll get sued” is not always the best argument to make when you’re trying to get buy-in at lower levels, as I discovered when I started at UWM. But that’s another post.)


2 thoughts on “Your Business Case Of The Week: Avoid ESI Spoliation Penalties!

  1. Pingback: And now: Football! | The Schedule

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