In the past, all companies kept data and information in paper documents. But with the breakthroughs in information technology over the past two decades, companies have shifted to using computers as an important device for storing and managing information. Much of this electronic data contains legally sensitive information that can be used as evidence in civil or criminal matters. With this, the process known as eDiscovery has become popular in obtaining evidence to use in court cases. Electronic discovery or commonly called E-discovery is a process of using electronic data in the form of text, images, databases, spreadsheets, audio files, etc. as evidence in civil or criminal disputes.
Electronic data versus paper documents
Electronic data is easy to store, manage, share and search compared to paper data. These features have made electronic data suitable for investigations. Another feature of electronic data that cannot be found in paper documents is the metadata or meta-information usually associated with electronic data. Metadata is the data about the data, which makes more information such as the author and the date on which the file was created available.
Impact on business organizations
As business organizations continue their daily routine, the amount of electronically stored information (ESI) to be managed is also increasing. The tightening up of regulations to be considered and the growing litigation faced by companies have led to an increasing awareness of the legal risks associated with the management of electronically stored information. This has led companies to invest in information risk management systems and document retention policies.
eDiscovery is an expensive process for companies. Millions of dollars have been spent on eDiscovery. Since the federal e-discovery procedures were changed in 2006, companies have taken eDiscovery seriously. DuPont spent approximately $ 12 million reviewing documents in eDiscovery, only to find that those documents should have been destroyed long ago under existing document retention policies. UBS Warburg and Merck were fined $ 29.2 million and $ 253 million respectively in a lawsuit that required eDiscovery of files. The Prudential Insurance Company of America was fined over $ 1 million for not keeping certain documents that were found to be crucial by the courts.
Business organizations have always been overexposed with documented related risks. According to The Tower Group, approximately 7.5 million Microsoft Office documents are created annually. About 35% of all business documents contain legally sensitive information (Cohasset Survey 2005). 25% of corporate documents are subject to regulation (Vanson Bourne Consultancy) and only about 30% of companies have implemented technology to facilitate document retention and disposal across the enterprise.
These documented related risks can come from many directions, some of the major risk forces identified by NextPage.com include:
Your business. On average, 80% of the Office documents that companies create are stored on hard drives and distributed shared disks. Combined with the ongoing problem of user acceptance of new tools, they are exposed to information risks.
Staff members. High-risk documents on employees’ computers and neglect of compliance with document retention policies become a dangerous combination for companies.
Customers. Failure to meet contractual obligations can lead to clear and unacceptable obligations for companies.
Regulatory. Most companies are required by government regulations to establish and effectively implement a document retention policy. In too many cases, uncontrolled documents on the desktop directly lead to non-compliance with these regulations.
Business leaders must master the effects of legal issues on business productivity.
Reactive versus proactive eDiscovery
A good IT Today article by Ursula Talley explains the difference between reactive and proactive eDiscovery. Reactive eDiscovery means taking actions upon receipt of a discovery request. Proactive eDiscovery, on the other hand, is the other way around, pre-organizing and managing information, allowing companies to better respond to future discovery requests.
Because the concept is relatively new and the tedious tasks involved in managing electronically stored information, most business organizations still respond to eDiscovery requests. However, as time passes, more and more companies are switching to proactive eDiscovery, given the clear benefits of a reactive eDiscovery.