Canadian corporations unprepared for future lawsuits stemming from e-discovery challenge

In-house lawyers would be wise to spend time with their information technology colleagues to fend off looming litigation challenges, participants at the e-Discovery Canada conference in Toronto heard last week.

“Befriend the information technology department,” said Carla Swansburg, senior litigation counsel for the Royal Bank Financial Group.

The comments came as speakers issued repeated warnings about companies’ lack of preparation for the e-discovery challenge.

“Canadian organizations don’t realize how much trouble they’re in until they get sued,” said Fred Sagel, organizer of the conference attended by about 75 in-house counsel along with a smattering of information systems administrators and litigation clerks.

“E-mail is the 800-pound gorilla in the room,” Christopher Olsen told conference delegates. Olsen, principal systems engineer at Lockheed Martin Corp., shared some startling factoids with the group.

According to a 2009 study by Cohasset Associates Inc., 98 per cent of all information is created electronically, yet 80 per cent of those documents are never printed. Further, only 53 per cent of all corporations have an e-mail policy.

The Cohasset study went on to say that when it comes to C-level executives, most are “clueless” about records management or the litigation risks posed by the lack of an e-mail policy by a margin of two to one.

“Yet most discovery is about two per cent of the documents an organization keeps,” Olsen said. “Most organizations don’t know where their information is or who has custody of what.”

Further, 78 per cent of e-mail can be deleted after one year, yet companies continue to pay to keep it mainly because storage costs are cheap, according to a 2009 Osterman Research Inc. white paper. This is the “clutter” that gets in the way of e-discovery searches for documents germane to a case.

The government enacted new rules on Jan. 1 affecting e-discovery that include a mandatory e-discovery plan and proportionality requirements. As a result, lawyers want documents to be organized, searchable, and relevant to a case while resisting so-called data dumps that drown the court in paper.

At one end of the spectrum is the random data-storage approach that can bring an organization to the brink while getting ready for a trial; at the other is the “one system, one archive” approach that organizations dream of having.

“And there is education to be done on both sides. Many lawyers don’t know what metadata is,” said Daniel Tobok, president of Toronto-based Digital Wyzdom. “At the same time, many in-house technical staff aren’t comfortable signing off on affidavits.”

Software vendors have automated the process of e-discovery to a large degree. Still, such products only provide the first sifting. Human eyeballs then must review the results of likely search strings.

In terms of looming risks to companies, conference speakers pointed to social media and the tendency to do business on platforms like Facebook; wiki sites that allow anyone to edit information whenever they like; and cloud computing, in which an organization’s data could be physically stored in another country, and the resulting issues of jurisdiction and data ownership.

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