Saving Your Documents
Can Save You
Anne D. Harman, Esq.
Bethany B. Swaton, Esq.
Dinsmore & Shohl LLP
2100 Market Street, Wheeling
(304) 230-1700
Anne.harman@dinslaw.com
Bethany.swaton@dinslaw.com
www.dinslaw.com
Importance of Documents for Business Purposes
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In 2010, estimate that 294 billion emails sent each day
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Sources of electronic information: PCs, laptops, smart
phones (i.e., blackberries and Iphones), websites, data
recorders, Ipads, jump drives, etc.
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Difficulty determining what electronic information to keep
and for how long
© 2011 Dinsmore & Shohl LLP | www.dinslaw.com
Laws Governing Retention
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No universal law on document retention
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Important to consider legal and business requirements
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Legal: local, state, federal laws and regulations may mandate
that certain documents be kept for a certain period of time
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Business: business practices may require information be kept
for a certain period of time
Common law duty to preserve documents and
information when litigation is reasonably anticipated
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Benefits of a Document Retention Policy
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Lessens liability;
Puts clients in a position to easily access data that might be
exculpatory, or at least, supportive of the company in defense
of a claim;
Assist in settlement;
Aids the spirit of transparency;
Provides surety to the organization that it is retaining all
records necessary to the business, regulatory, and legal needs
of the organization; and
Provides guidance for destroying documents
© 2011 Dinsmore & Shohl LLP | www.dinslaw.com
Developing a Document Retention Policy
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Consider the business, regulatory, and tax needs of the
organization
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Group together individuals from various parts of the
organization to develop the policy
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Management, finance, business, legal, and IT
© 2011 Dinsmore & Shohl LLP | www.dinslaw.com
Developing a Document Retention Policy
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Not every document created must be kept pursuant to the
policy; rather, only documents qualifying as a business record
must be retained.
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determine documents that can be classified as a special subset of information
deemed to have some enduring value to an organization and warranting
special attention concerning retention, accessibility, and retrieval
Documents that must be considered for retention:
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Paper documents
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Electronic documents including Word processing documents, e-mail, web
pages
© 2011 Dinsmore & Shohl LLP | www.dinslaw.com
Developing a Document Retention Policy
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Determining a retention schedule:
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Outside of industry regulations and legal requirements, a
business need only keep documents and information as long as
necessary for business purposes.
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If a policy limits the length of time of retention, the company will
have less information to search and review if served with a
document request.
© 2011 Dinsmore & Shohl LLP | www.dinslaw.com
Developing a Document Retention Policy
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Understand and evaluate the records management
practices already in place
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Determine where and how documents and information are kept
(i.e., paper form, backup tapes, filing cabinets, computer files,
etc.)
Determine backup procedures used (central servers, backup
tapes, other imaging systems)
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Determine individuals who may have responsive
business documents
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Using the retention guidelines, determine whether
documents currently kept should be retained or
destroyed
© 2011 Dinsmore & Shohl LLP | www.dinslaw.com
Retention Policy Provisions
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In general, the policy must serve a legitimate business
purpose and not be a means for cleansing files prior to
litigation.
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Facilitating easier access to stored information;
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Controlling growth of information;
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Reducing operating and storage costs;
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Improving efficiency and productivity.
The policy must be flexible to be suspended should a
litigation hold be necessary.
© 2011 Dinsmore & Shohl LLP | www.dinslaw.com
Retention Policy Provisions
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Period of time during which records have value;
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Period of time records are considered to be active and thus
maintained in the primary filing area;
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Point in time when records can reasonably be transferred to a
secondary storage facility;
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Method of records disposal or disposition;
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Procedures for operating and ensuring compliance with the
retention and disposition program;
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Relationship between records retention and other aspects of
records management program (i.e., legal hold policy, ediscovery response policy, a data privacy policy, e-mail usage
policy)
© 2011 Dinsmore & Shohl LLP | www.dinslaw.com
E-mail Retention
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E-mail may be included in the overall document
retention policy.
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Typical features for retaining e-mail:
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User mailbox size limitations (quota);
Automatic deletion of user mailbox contents
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Deletion after a certain period of days coupled with options so that the user
can move e-mail of significance to an appropriate alternative storage
location
Extended storage options
Restriction on local storage
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Prohibit users from placing information on local PC hard drives (other
devices) to avoid the problem that local hard drives cannot be accessed by
others and are not backed up.
© 2011 Dinsmore & Shohl LLP | www.dinslaw.com
Aids for Retaining Documents
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Computer software filtering programs that can be
customized to search messages, attachment, and other
electronically-stored information for key words to save
electronic information
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Backup tapes
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Servers
© 2011 Dinsmore & Shohl LLP | www.dinslaw.com
Implementation and Enforcement
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Develop enforcement procedures to ensure that all
employees follow the policy and its procedures.
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Create detailed logs of record-purging and back-up
activities.
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Any policy must be communicated to all employees.
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Periodically review and audit to determine if changes must
be made.
© 2011 Dinsmore & Shohl LLP | www.dinslaw.com
Litigation Hold
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Once any judicial or investigative proceeding is
contemplated or begins, companies should automatically
suspend the retention policy.
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Implementing a litigation hold involves two questions:
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When does the duty to preserve begin for litigation-related
records?
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What evidence must be preserved?
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Litigation Hold – Preserving Documents
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Identify, locate, and maintain information relevant to specific,
predictable, and identifiable litigation
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The duty to preserve electronic and paper documents
supersedes records management policies that would otherwise
result in the destruction of records and other information.
However, the business must continue in its business
operations.
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Businesses have a duty to balance in good faith the need to
preserve evidence and the need to continue operations.
© 2011 Dinsmore & Shohl LLP | www.dinslaw.com
Litigation Hold – Notice to Employees
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Businesses need to communicate to affected persons the need
for and scope of preserving relevant records
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Notice to employees of the need to preserve documents should
include:
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Describe the kind of information that must be preserved so that the affected
custodians of data can segregate and preserve identified files and data;
Address preservation of data in multiple locations; and
Include that the complete suspension of normal document management
policies is not required
Send notice to the following:
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Employees reasonably likely to maintain documents relevant to the litigation or
investigation;
IT department and any third parties that provide IT services
© 2011 Dinsmore & Shohl LLP | www.dinslaw.com
Consequences and Sanctions
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Rule 26 of the Federal and West Virginia Rules of Civil
Procedure requires the disclosure of relevant
information.
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Failure to comply with production of relevant
information can lead to court-imposed sanctions.
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Morgan Stanley - $1.4 billion in compensatory and punitive
damages after being found guilty of discovery abuses stemming
from its lack of knowledge regarding the storage of discoverable
information
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UBS Systems (Zubulake line)
© 2011 Dinsmore & Shohl LLP | www.dinslaw.com
Consequences and Sanctions
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Rule 37 contains a safe harbor for companies who fail to
provide electronically-stored information lost as a result of the
routine, good-faith operation of an electronic document
retention system.
Courts have found that destruction of relevant electronic
evidence, if done routinely in the ordinary course of business,
does not automatically give rise to an inference of knowledge of
specific documents’ destruction, must less intent to destroy
those documents for litigation-related purposes.
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Courts focus on culpability: in the circumstances of the present case, should
a party bear culpability and consequences for the loss of electronic data (i.e.,
failing to take reasonable steps to ensure a good faith effort to preserve
relevant electronic data may lead to spoliation instructions or other sanctions).
© 2011 Dinsmore & Shohl LLP | www.dinslaw.com
Anne D. Harman, Esq.
Bethany B. Swaton, Esq.
(304) 230-1700
Anne.harman@dinslaw.com
Bethany.swaton@dinslaw.com
www.dinslaw.com