Recent changes to the Federal Rules of Civil Procedure (FRCP) have broad-reaching implications that impact businesses of all types; while procedural court rules generally reach only inside the courtroom, the amendments to the FRCP mandate companies change their entire approach to electronic record keeping. You and your company need to know and understand the new rules and their potential effect on your business.
“Why should you care about court rules?” This approach comes with serious risks and impacts. The rules establish the playing field and govern literally every piece of litigation in federal courts. As such, the rules potentially effect every business, organization and person who may ever be involved in a federal court case.
Federal courts have diverse jurisdiction over all cases where the parties are from different states and the amount in controversy is more than $75,000. In addition, federal courts handle many regulatory cases, such as actions by the Internal Revenue Service, as well as incidents involving alleged violations or enforcement of federal regulations, immigration cases and many more. As such, your business likely is exposed to at least the chance of being dragged into federal litigation. In addition, the federal rules often represent the first wave of rules that wash across the various state courts. Changes at the federal level often replicate into paralleled changes to state rules. Businesses should expect the changes in the federal rules to percolate through the state court systems over the next several years.
Much of the modern litigation process focuses on discovery. This phase of the case encompasses requesting and obtaining documents, taking depositions of key players and exchanging requests and responses for written information. Accordingly, the rules relating to discovery procedure and practice are a large part of the overall structure.
Disputes regularly occur during the discovery process. Even without extensive motions and battles over discovery, the process can be tedious, time-consuming and expensive. Parties must sift through their archives in search of documents that must be disclosed. The ability of a party to effectively manage its electronic records can provide a significant advantage over its adversary. You can allow your counsel a timing advantage and also gain a strategic advantage as the lawsuit unfolds, due to superior access to information and available analysis.
As more records have been converted to electronic format, fights over access to, copying and availability of electronic information have become a staple of modern court cases. The ubiquitous nature of e-mails has changed the entire discovery process and indeed can have a major impact on cases. In reaction, the new rules have expanded the standards and requirements upon the parties to identify, evaluate, collate and produce electronic records. A central feature of the new rules is the requirement that the parties are obliged early in litigation to divulge the existence of and describe relevant electronic records. Additionally, parties are required to hold an early-stage conference that includes discussion of
e-record issues and planning for discovery.
Litigants will be expected to quickly assess what e-records they possess, where they are, what form they are in, how accessible they are, how voluminous they are and the likely costs to compile them. These rules provide companies further incentive to keep more complete e-mail archives and to retain those archives longer. A company that has destroyed its e-mail records prematurely or that cannot account for the electronic records it does possess may face greater penalties, including substantive impact to its case than those provided under the earlier rules.
You need to have organized records and the capability to promptly search through the documents. A corporate litigant who is unable to respond accordingly opens itself to the risk of sanctions from the court. A litigant who makes early representations about their records that later prove to be inaccurate may be viewed as misleading the other party.
Companies and corporate counsel should be aware of the amended rules and take appropriate measures. It is important to have clear and open communication between the information technology and the legal department. Your company needs to understand the nature and scope of the company’s electronic data, the policies regarding the storage of the data and the capabilities of the system in terms of producing certain data at a moment’s notice. This understanding also may provide significant cost savings when it comes down to the overall litigation process. •
HUGHES is the principal of the Northern Virginia law firm of Hughes & Associates, P.L.L.C. Joubert is an associate. They can be reached at firstname.lastname@example.org or 703.671.8200.