During the course of my commercial litigation practice, some of the most expensive mistakes I have seen companies make had to do with either the retention or destruction of documents. Modern businesses can generate a huge amount of documents and data, both in paper and electronic form. During litigation, if a company does not have a proper policy for purging old documents and data, the time and expense of the litigation can be significantly higher. Worse, improper destruction of documents during litigation can result in a negative inference against the company that can result in its losing the case. This can happen even if the documents that were destroyed would not have been negative for the company.
With all the potential issues involving documents, you are probably asking what your company should be doing. The answer is that your company needs an strong written document retention policy.
A long time ago, understanding documents was easy; documents were literally pieces of paper. However, modern businesses need to worry about much more than paper. The Federal Rules of Civil Procedure provide some guidance as to what is considered a document. Rule 34 states, in part, that document production should include: “any designated documents or electronically stored information – including writings, drawings, graphs, charts, photographs, sound recordings, images, and other data or data compilations – stored in any medium from which information can be obtained either directly or, if necessary, after translation but the responding party into a reasonably usable form.” From a legal perspective, a “document” can include the following:
This is not intended to be an exhaustive list of documents or sources of documents, but is only meant to illustrate the scope of the document issue. In order to have a comprehensive document retention policy, you need to address all types of documents and all sources of documents.
The following elements are essential to a document retention policy:
Depending upon your specific business, there may be additional considerations, and you need to talk with an experienced professional to design an appropriate document retention policy for your business.
Without an appropriate document retention policy, you are putting your company at substantial risk. The following are just a few risks that can be mitigated with an appropriate policy:
If you do not currently have a document retention policy, you should talk to your attorney about putting one into place.