Companies Must Keep E-Mails, Other Correspondence of Employees - Federal Court

Update Regulations of Internet Correspondence

by Yaroslav Lyssenko

[ 12/07/2006 | 03:55 PM ]

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As of December the 1^st, the U.S. companies will need to know more about where they store e-mails, instant messages and other electronic documents generated by their employees in the event they are sued, thanks to changes in federal rules that took effect last Friday.

Associated Press reports that the changes, approved by the Supreme Court’s administrative arm in April after a five-year review, require companies and other parties involved in federal litigation to produce “electronically stored information” as part of discovery, the process by which both sides share evidence before a trial.

Federal and state courts have increasingly been requiring the production of such evidence in individual cases. The new rules clarify that the data will be required in federal cases.

“Under the new rules, an information technology employee who routinely copies over a backup computer tape could be committing “virtual shredding” once a lawsuit has been filed,” said Alvin F. Lindsay, a partner at Hogan & Hartson LLP and expert on technology and litigation.

The new rules make it more important for companies to know what electronic information they have and where, especially because of a provision that requires lawyers to provide information much earlier than before on where their clients’ data are stored and how accessible they are.

“Large companies are likely to face higher costs from organizing their data in order to meet those deadlines. Besides e-mail, companies also will need to know about things more difficult to track, like digital photos of work sites on employee cell phones and information on removable memory cards,” said James Wright, director of electronic discovery at Halliburton Co..

There are hundreds of “e-discovery vendors” and these businesses raked in approximately $1.6 billion in 2006 and the figure is expected to double in 2007.

• Associated Press: Companies Face New Rules on E-mails.