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New rules, new game for compliance and ediscovery

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Litigation
Retention policies are critical, but litigation changes everything. As soon as a lawsuit has been filed against a company or could be anticipated, the company is obligated to preserve all pertinent data. "At that point we have to preserve all the data. That means freeze everything," says Gerbrandt. "The destruction component of the retention policy gets interrupted."

"The biggest mistake companies make is to not store data [in the face of] a litigation hold or regulatory requirements," says Ronald Hedges, a former U.S. Magistrate Judge in the U.S. District Court for the District of New Jersey and currently counsel, litigation and dispute resolution at the Nixon Peabody LLP law firm in New York. Multimillion dollar litigation awards have been won due in large part to the failure of a company to produce the required documents.

Even when confronting litigation, companies can selectively follow normal retention policies. "If the litigation involves an employment issue and focuses on the actions of a few key players, you can still destroy other data according to your retention policy," says Martha Dawson, partner, co-practice chair, ediscovery analysis and technology group at K&L Gates in Seattle.

Cost of accessing data
The federal rules are fairly clear about making data available for litigation. But Rule 26(b)2(b) provides some wiggle room if the data is inaccessible or the cost of accessing the data is unreasonably

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burdensome. "The big question here is whether accessibility is reasonable or not," says Hedges.

There are no guidelines as to what constitutes unreasonable accessibility or burdensome costs; a judge makes the call for each particular case. Bruce Radke, partner and co-chairman of the ediscovery practice at Vedder Price Kaufman & Kammholz PC in Chicago, suggests three factors judges will use:

  • Size of the case. A multimillion dollar case absorbs higher accessibility costs than a small case.
  • Who's incurring the cost. Judges will feel large corporations can absorb much higher costs than individuals or small companies.
  • The relevance of the information being targeted. If the data is likely to be central to the case, cost probably won't be a barrier.

This was first published in September 2007

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