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E-disclosure
It is sadly inevitable that all businesses get involved in litigation at some point, and will be required to produce a list of all ‘relevant documents’. Panic! Due to electronic working, paper ‘documents’ are not always created. So, where does your business stand, and are you aware of how your systems work and their implications for your business? Andrew Cromby looks at the dangers of e-mail exchanges and details how companies need to think very carefully
It is expected that at some stage any company could find itself involved in a commercial dispute of some kind. And not being able to resolve the problem in the early stages can result in claims being made through the Courts. Whether bringing or defending a claim, the company will need to submit a written statement of its position with each party producing ‘statements of case’, clearly setting out facts as seen by each party and providing a legal analysis of their respective positions.
As the legal process continues towards trial, the parties will be required to disclose to each other all documents that bear any relevance to the issues in dispute. It is not open to the parties to 'pick and choose' which documents they disclose – they have to include both the documents that assist their case, but also include those documents that are to their detriment. This part of the legal process is known as 'disclosure' and, in the past, each side has produced a list of documents, which can then either be inspected as original documents or, alternatively, which they are obliged to provide copies of, on request.
Those 'documents' relevant to the case have been selected and submitted and the business can rest easy. Really? Well, no. We live in an increasingly electronic age, when most organisations conduct the vast majority of their business electronically and, all too often, paper 'documents' are not created. Today, the definition of what constitutes a 'document' has widened considerably. A document isn't just an item in print – it is long established law that recordings (including audio recordings and recordings in other electronic media) can be 'documents'. Anything that is capable of containing information can be a 'document'.
Therefore, many millions of 'documents' are created each day in the form of e-mails, word documents and other pieces of electronic information and are stored in computers in ways such as 'metadata' – information relating to changes made to electronic documents stored on a computer system. Copies of the document may exist in printed form, on hard drives or in servers – multiple copies can be held at several locations.
Towards the end of last year, the Court confirmed what legal practitioners have known for some time; it is necessary, as part of the disclosure process, to inform the other party that copies of electronic documents exist, including documents on other servers, copies held on old hard drives, etc. Deleting a document from your computer is not the end of its existence – copies can be held in several locations and this can come back to haunt claimants or defendants who have created documents that in hindsight they wish they had not! That flippant e-mail that was sent from colleague to colleague a few weeks ago and has since been forgotten about may be the biggest mistake an employee could have made.
There is a potentially huge danger to businesses in these 'flippant' e-mail exchanges. It is not unknown for companies or businesses to send internal e-mails in relation to threatened claims making comments such as: “Have you seen this written claim from “X”? I am really worried about it.” While the remark may appear totally innocuous, the immediate question raised by the party that receives a copy of this document is likely to be: “Why was there a cause for concern?” It could even be claimed that a statement of this kind could amount to an admission of liability. A party in legal proceedings may be duty bound to produce a copy of the document. An e-mail intended to circulate internally, stating: “We are going to have to put our hands up on this claim”, could well be disclosable in legal proceedings and the harm that such a comment could cause, such as the prejudice that it would create in the mind of a judge, could be immense.
Businesses need to give great consideration to their policies on e-mails especially those relating to matters that could, eventually, give rise to formal claims. In certain circumstances, documents can be 'protected' from being produced in legal proceedings on the grounds that they are legally privileged. These circumstances are very precise and businesses need to take advice on what they can do to preserve their position, preventing unwanted admissions and other information being recorded in documents electronically and which they will subsequently have to disclose to the other side.
E-disclosure could be regarded as a minefield, and therefore companies need to take steps not only to consider what their policy should be in relation to e-documents, but also to highlight the urgency in enforcing those policies – and in doing so, protect themselves from legal liability.
- This article is intended for general guidance only and is not a substitute for specific legal advice.
• Andrew Cromby, partner in the Dispute Resolution Department at KSB Law LLP, can be contacted via tel: +44 207822 7597; e-mail: acromby@ksblaw.co.uk
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