It has been conservatively estimated that 90 percent of business information is now in electronic form, and most of the paper is just a subset of the electronically stored information. Most businesses in the United States and most developed countries use e-mail second only to phone communications. Although the electronic revolution may prove advantageous to the environment, it has created a cascade of issues surrounding the discovery of electronically stored information in legal proceedings.

The nature of electronic files, including multiple types and formats, sensitivity to deliberate and accidental changes, system creation dependency and greater volumes all contribute to the uniqueness of electronic discovery (e-discovery). Multiple sources of electronic files in various locations have also created the need to re-address corporate record-retention plans, data-preservation procedures and litigation hold policies. Costs associated with identifying, collecting, converting, reviewing and producing electronic files have also proved financially burdensome, particularly in large-scale litigations.

In the United States, changes in the Federal Rules of Civil Procedure (FRCP) have also added specific regulatory strata to the e-discovery process. In effect since December 1, 2006, these amendments formally recognize electronically stored information as subject to discovery, production and admissibility in a manner reflective of paper copy. The rules require early attention to what is electronically stored, set time limits to complete discovery, add the concept of what is “reasonably accessible,” set forth procedures for inadvertent production and provide guidance to courts regarding sanctions.

It is still unknown how prepared U.S. corporations are to meet the challenges of electronically stored information in tandem with the new regulations for e-discovery. Various self-assessment surveys and studies conclude that corporate litigation readiness is far from universal. In one study, less than 15 percent of the corporate legal departments surveyed believed they had the tools and processes in place to handle e-discovery. With the demands of data preservation, the risk of information getting corrupted, mandatory disclosures and the need to be prepared for meet-and-confer conferences, U.S. corporate law departments and outside counsel are quickly recognizing the need for early litigation preparedness planning and investment based on cost-containment methodologies.

8 points to know about e-discovery regulation and litigation readiness

Part of litigation preparedness includes having knowledge of the technology infrastructure, specifically where and how data resides, and at least a rudimentary identification of key sources of potentially relevant information. Determining the “who, what, when, where, why and how” of electronically stored information, regardless of source and location, is a key component of litigation readiness. For U.S.-based companies operating internationally, geographic boundaries for e-discovery may be faint or invisible. More and more businesses, sometimes at the request of outside counsel, are bringing in experts in computer forensics, e-discovery, records management and information security who specialize in identifying, preserving, recovering, collecting, analyzing and authenticating data. They perform litigation-preparedness activities including: