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[January 2005 issue of e-Discovery Law and Strategy (US)]
The word ‘Compliance’ has recently become a major issue for all industries and sectors due to a number of economic and political events. Compliance refers to how successfully a business or individual fulfils the requirements of current laws such as the Data Protection ACT. For example, can the relevant data be located accessed within the specified timescale? And is the information guaranteed to be accurate?
With the increase in cross-border transactions; terrorism a real threat across the world and accountability scandals like Worldcom and Enron in the US making headline news due to the sheer scale of the deception, it is no wonder that Governments are looking for ways to regulate and control the information that could prove vital in the event of litigation. The gradual privatisation of industries in the UK and across Europe has meant that Governments have needed to set standards now in an attempt to minimalise bad press from large litigation cases. Investors and shareholders are placing growing importance on compliance, not only as reactive result of legislation, but as a proactive to a Corporate Governance policy – in effect, companies that address these issues early will have gained a competitive advantage.
It is fast becoming evident to companies across the world that the use of IT can be the least time consuming and most inexpensive way to compliance; yet whilst companies in the US are striving vigorously to update existing infrastructure and processes, the UK and Europe seem quietly confident that everything is under control. However this is simply not the case. Many companies in Europe that have US subsidiaries have taken regulatory requirements very seriously, yet those that have not are simply reacting to legislation as and when it arrives.
So what impact is it likely to have in the future? Any action needing to be taken is likely to come in the form of a disclosure order as a result of potential or suspected irregularities in an organisation’s behaviour. This could happen at present as a result of a number of UK legislation initiatives, including the Data Protection Act, the Freedom of Information Act and International Accounting Standards (IAS). In addition to this, many UK companies are being affected by US legislation such as Sarbanes-Oxley, SEC 17a-4, which has resulted in a huge overhaul of IT infrastructure on both sides of the water for companies that have operations on both continents. The case will grow stronger should these rules be made compulsory in the UK but at present, both law firms and corporations alike, are experiencing the calm before the storm. “We know its coming” we hear but still they sit and wait.
Disclosure orders are still a bit of a grey area in the UK; this is partly due to the fact that the sheer amount of electronic information that is held within a company’s IT infrastructure has grown exponentially over the past few years. The CPR (Civil Procedure Rules) refers to electronic records as being “anything in which any kind of information of any description is recorded” and in the event of a disclosure order, the organisation has an obligation to make a “reasonable search” for documents related to the order. These rules relate to ‘standard disclosure’ but in specific instances, a court can request ‘special disclosure’ which will involve in depth searches for relevant information. The organisation in question is then faced with searching through emails, embedded email messages, databases, word processed documents, spreadsheets, presentations, zip files, system files, unhandled documents, metadata, legacy data, deleted data and duplicates to name a few – this is the time to call in the professionals; ideally your law firm with its carefully selected eDiscovery services provider.
Each disclosure order will inevitably be different in the information that has been stored, the information that is required and the nature of the case. Experienced and competent assistance is required not only to analyse the system and extract and de-duplicate the information in question, but also to offer third-party neutrality, should the information need to be presented in court. The way in which many US law firms have handled this has been to partner with companies that can offer specialist help in such cases. Not only do they receive favourable rates for their pro-active approach, they can also be confident in the knowledge that they are prepared for any such eventuality.
For more information, please contact the eMag Solutions Ltd. eDiscovery and Data Restoration team on 01495 322222. We extract data from more logical and physical formats than any other company in the world.
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