When the cost of e-discovery drives case strategy, it is time to re-evaluate priorities. The U.S. Supreme Court and Congress agreed and amended several of the Federal Rules of Civil Procedure in December 2015 in light of massive increases in the amount of data generated by modern corporations and the consequential rise in litigation costs. The new rules encourage parties to work together to narrow the scope of discovery and focus on data that is most likely to be of help in resolving the dispute. For example, under the new Rule 26, parties are only required to produce documents which are relevant and proportional to the needs of the case. Rule 37, as amended, limits sanctions for failing to preserve documents to a finding of prejudice or an intent to deprive the opposing party of relevant information.
Now that almost two years have passed since the new Federal Rules of Civil Procedure became law, we have the opportunity to assess the effectiveness of our current strategies and whether we are taking full advantage of the new rules related to discovery.
What strategies can be employed so that both discovery obligations and business considerations are satisfied?
#1: Get to Know Your Data
In most cases, a simple, straightforward, easy-to-understand outline of data sources, locations, and the individuals most knowledgeable about each (often referred to as a “data map”), will suffice. Asking the right questions now can alleviate excess stress down the road when it is time to decide what data should be preserved and collected. Increase familiarity with current applications as well as legacy applications. Develop an understanding of the functional role electronic data plays for each unit. Become more aware of how the business units share key information. Understand company backups and what data is stored on the cloud or with vendors. Ask about mobile device use and social media practices. It would be wise to organize a working group made up of IT, the exchange administrator, the administrator of any structured data systems and a member of the in-house team that meets once a quarter to discuss data systems, employee data practices and update the map. Getting to know your data has other cost savings benefits as well. During these discussions, consider whether data sources be consolidated. Consider whether you are holding onto data that has no justifiable business use (and is not under legal hold). Always keep in mind that stockpiled (and unnecessarily preserved) data may have to be collected and produced in the future.
#2: Develop Preservation Protocols
By clearly defining the scope of spoliation sanctions, new Rule 37 encourages companies to implement reasonable preservation protocols that avoid unnecessary over-preservation (sometimes referred to as “good data hygiene”). Now that you know your data, work with internal IT and business units to establish data retention schedules which satisfy business needs as well as regulatory requirements but also allow for the disposition (or deletion) of data. It can be difficult to pull the plug on company data, but unnecessary data retention not only creates on-going additional expense for IT but also massively increases litigation costs. Develop a step-by-step process for implementing a legal hold (who to call, how to determine which systems are in play, how to determine which custodians may have relevant data) so that it becomes a streamlined, efficient process. When it becomes necessary to implement a legal hold, maintain thorough records because courts may require verification of communications with data custodians and IT, evidencing that necessary and timely steps were taken to preserve potentially relevant data. Consider utilizing one of the software systems available to create and track litigation holds automatically, send reminders, and release holds when the time comes.
#3: Be Prepared to Cooperate with Opposing Parties
In addition to Rules 26 and 37, updates to Rules 1 and 16 emphasize the importance of engaging in meaningful discussions with opposing parties regarding the scope of discovery early and often. While it’s not always possible, the best way to streamline the document discovery process is by agreeing with opposing parties to the parameters of collection. Be familiar with Rule 26(f), your court’s rules and judge’s preferences. Work with discovery counsel on a standard ESI (electronically stored information) agreement that suits your company’s needs, appropriately limits discovery and can be adapted to any matter. Come to the table with a 502(d) order and protective order with which you are comfortable and avoid much of the costly back and forth. Most importantly (and especially if the discovery burden falls more heavily on you), know your data so that you can discuss custodians, search terms and data sources when the time comes, and focus your negotiations on data that is actually likely to provide relevant information.
#4: Consider Having Dedicated Discovery Counsel
While companies will naturally want to employ outside counsel who are experts in the particular issue and law of a case, they do not always consider the importance of including dedicated outside discovery counsel on their litigation teams. However, GCs who take advantage of legal e-discovery experts find that they provide peace of mind that sensitive company information is handled appropriately and applicable rules and laws are followed such that sanctions or penalties do not come into play. A growing number of courts are demanding that e-discovery experts participate in discussions by including designated “e-discovery liaisons” in their scheduling orders. The California Bar issued an opinion that attorneys have an ethical duty to become familiar with e-discovery technology and processes, or seek help from a qualified professional. Probably the most enticing (and surprising) reason to add e-discovery counsel to your litigation team is that they can actually create cost savings. For example, effective e-discovery counsel can provide guidance regarding narrowing the scope of discovery, proportional preservation, what data is reasonably accessible and what data is too costly (or impossible) to restore, targeted document collections, using technology to streamline document review, leveraging work product for related litigations across databases and documents, cost shifting, and much more.