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Computer Information and Litigation

Published: February 5th, 2007

By: Nichole M. Mooney

In today’s world, computers are everywhere. Most, if not all, businesses use computers to keep track of income, expenses, accounts receivable and other financial information. Monthly, quarterly and yearly financial reports are frequently generated by computer software programs and stored in computers.

Letters are routinely prepared on computers and printed on computer-driven printers. The use of e-mails for communicating with customers, clients, suppliers and others is now commonplace. In a growing number of cases, e-mails are the primary, if not exclusive, means of communicating with others.

Although most businesses still maintain paper files that are stored in filing cabinets, a vast amount of information is now stored in computers. This information is stored in an electronic form, and can be found in desktop and laptop computers, servers, PDAs, disks, CDs and backup tapes. Even when files, documents, records and e-mails have been deleted, the deleted electronic information remains on the computer hard drive and can almost always be retrieved by forensic computer experts.

When disagreements erupt into litigation, plaintiffs, defendants and other parties engage in discovery, which generally involves depositions and the production of documents that are relevant to the disputes. Before the advent of computers, parties simply had to search their paper files to locate documents requested by another party. A simple search of paper files is no longer sufficient because of the vast amount of information that is stored in electronic form.

In recognition of the fact that information is routinely stored in an electronic form, both state and federal courts now permit parties to engage in electronic discovery, commonly referred to as “e-discovery.” This means that parties must now produce relevant electronic data when requested to do so.

Until very recently, there have been no specific rules to follow in requesting and producing electronic information. The Federal Rules of Civil Procedure, which govern cases filed in federal courts, were recently amended to include specific procedures and requirements for e-discovery. However, state courts in Florida have not yet adopted specific rules governing e-discovery.

There are several unique and rather complex issues and problems that have arisen in responding to requests for the production of electronic information. One of these problems is that many, if not all, employees routinely delete e-mails, documents, records and even whole files. Employees may or may not print copies of the documents before they are deleted. In addition, some businesses have adopted document retention policies, which may require that e-mails, letters, records, files and other electronically stored documents be permanently deleted after a specified period of time.

It has long been the rule that once litigation has been commenced, the parties and their employees must not discard or destroy letters, documents, records or files that might be relevant to any of the issues in the case. The same principle applies to electronic data. Given the number of people who may have access to computers on which information is stored, there is a real possibility that electronic data may be deleted, whether intentionally or unintentionally.

Another problem relates to the accessibility of electronic information. When businesses kept paper records, they were generally placed in files and stored in file cabinets in an office. This made it relatively easy to find a document such as a letter from one person to another.

In the electronic age we live in, finding a document can be much more difficult. For instance, a letter may be stored on a desktop hard drive, a laptop hard drive, one or more disks, a file server, a network file that may be accessible to a number of different individuals, including those in different cities and states, a backup tape or backup tapes.

To compound the problems associated with electronic discovery, a party requesting documents stored in an electronic form may not be willing to simply accept a printed copy of the electronically stored documents. Instead, a party may want to have its own forensic computer expert copy the entire hard drive and search for the document and other relevant documents. It is likely to cost a great deal of money to hire a forensic computer expert to make an exact duplicate of the hard drive of one or more computers, reproduce network files, reproduce back-up tapes and other computer-related equipment on which electronic information may be contained. Questions have arisen, and will continue to arise, concerning the circumstances under which a party can insist on using a forensic computer expert and who has to pay the associated costs.

Electronic discovery is in its infancy. There are many issues that courts will have to decide in the next few years. Any person or business that becomes engaged in litigation which may involve electronic discovery should discuss the process, issues and problems with their attorney at a very early stage of the case.

Despite the many unanswered questions that will continue to arise, there is one rule that every business must follow. If litigation is filed, or if it becomes clear that litigation will be filed, all relevant evidence must be preserved.

This will require that a “litigation hold” be implemented immediately. It is essential that all backup tapes and other backup media containing any information that could be relevant to the dispute be identified and kept in a safe location so that they are not lost, discarded or damaged.

It is also crucial that all key personnel and employees of the business, including those who had any involvement in the dispute, must be instructed in writing not to delete or alter any e-mails, letters, records, documents or files that could possibly have any relevance to the dispute. In addition, all document retention policies requiring that e-mails, letters, records, files and other electronically stored documents be permanently deleted after a specified period of time must be suspended until the litigation is concluded.

One key employee who was not involved in the dispute in any way should be charged with the responsibility of making sure that all of the instructions are followed. It may also be desirable for the business to retain a forensic computer expert to oversee the process instead of relying on its IT personnel. If necessary, the outside computer expert can be called to testify as to the procedures that were followed to preserve evidence.

Although these precautions may seem unnecessary, time-consuming and expensive, the failure to preserve and produce electronic evidence can have catastrophic consequences. In one Florida case, the repeated and deliberate failure to take steps to find, preserve and produce electronic data, coupled with production of material to the court that was incomplete and riddled with purportedly false representations, resulted in a jury verdict of $850,000,000.00 in punitive damages, in addition to the earlier verdict of $604,000,000.00 in compensatory damages.

There are many difficult and complex issues in electronic discovery that should be discussed with legal counsel as early in the litigation process as possible. Proper advice can be invaluable in requesting electronic discovery and in responding to requests for electronic discovery.