eDiscovery & Compliance Considerations

Are you informied of new regulations such as FRCP - Federal Rules of Civil Procedure?

Well, it is now an inescapable fact of life in corporate messaging is the need to retain records. One reason for record retention is to meet compliance requirements, especially in regulated industries like financial services. The other reason that companies have to pay close attention to their message retention policies and practices is so that they can preserve any potential evidence that might be needed in the discovery phase of a litigation.

Requirements for record retention continue to evolve as new technologies become widespread, as the legislative and regulatory bodies modify the rules, and as organizations test the extent of regulations in the courts.

Organizations that pay attention to this shifting landscape lower their risk and lower their costs. They are better able to be in compliance. These organizations are also in better position to protect themselves against possible litigation and to reduce the costs of reviewing and identifying relevant messages.

Companies are required to retain voice mail

Some companies have been given the wrong impression that they are not obligated to retain voice messages. This has caused them to cite compliance as a reason not to unify their messaging. However the courts have made it clear that, however burdensome, it is necessary to retain voice messages.

The December 1, 2006 Federal Rules of Civil Procedure were amended specifically to include sound recordings (i.e. voice mail)    Rule 26 (b) (1)  to produce and permit the party making the request, to inspect, copy, test, or sample any designated documents or electronically stored information-(including writings, drawings, graphs, charts, photographs, sounds recordings, images, and other data…in any medium from which information can be obtained, - translated , if necessary, by the respondent into reasonably usable form)

This requirement to retain voice mail along with other forms of messaging is one more driving force to deploy Unified Messaging. Voice mail that is stored along with email in a data store like Microsoft Exchange is much easier to manage and find in the event of litigation. In fact, the discovery issue has shifted from discovery prevention to discovery facilitation.

In one recent court judgment, Federal District Court ordered the preservation of voicemail files. Plaintiff argued that maintaining digital evidence was costly and burdensome to its business. However, the Court refused to accept that maintaining digital evidence was a burden and ordered the defendant to preserve all audio evidence. [Del Campo vs. Kennedy WL 2586633 (N.D. Cal. Sept. 8, 2006)]

And in another case, the judge ordered that the voicemail of the manufacturer (Merck Octel) be preserved to possible production later in litigation. Once again the court refused to accept the preservation of digital voicemail as burdensome. [See In vs. Vioxx Litigation, Supreme Court of New Jersey, Sept. 8, 2006)]

Experts and trade organizations advise retention for electronic records

As a result of these court decisions, experts are advising organizations to update their retention policies and practices.

The Michigan Manufacturers Association has adopted the following guideline: The penalty for violating either Section 802 or Section 1102 is a fine, imprisonment for not more than 20 years or both. These sections apply not only to hard copies of all documents but also to e-mail, voice mail, PDAs and other forms of electronic hardware and software. Therefore, it is recommended that record retention policies specifically refer to these types of tools.

Pamela Palmer, at Latham & Watkins, writes in the Bowne Digest for Corporate & Securities Lawyers: All forms of recorded communication, including e-mail and voice mail, fall within the reach of the prohibitions and must be preserved.

Reviewing legacy voicemail files is expensive

These experts also point out that companies who use traditional voice messaging systems should anticipate considerable work to recover voicemail in the discovery phase. For example, April Berman, Mary Ann Miranda and Sonya Smith write in an article Voicemail - The Other Smoking Gun: Because voicemail is discoverable under the Rules of Civil Procedure, businesses would be well-advised to pay as much attention to voicemail management and retention as they do email management.

The recovery process poses a substantial obstacle to voicemail discovery. Unlike e-mail, voicemail is not indexed and is not readily searchable without technology.

You should anticipate that someone will have to listen to each voicemail in its entirety in real time to determine if the voicemail contains responsive information. To minimize this inefficiency, archive voicemail data by date, time, and user. (Baker Donaldson Litigation News; Spring 2005)

Because voicemail stored in legacy systems is both difficult to manage and requires listening to determine the contents, it is costly to review. A Nexidia independent survey in 2006 found that a typical 200 hours (of voice mail) can cost between $40,000 for five people listening and 80- hours to complete the review to over $62,100 for a court reporting transcription service.

Using Unified Messaging as a compliance solution

Unified Messaging may aid compliance by allowing organizations to store and archive voice messages along with e-mail in a single data store. Furthermore, it allows organizations to follow a single set of archive, security, data recovery, business continuity, and legal policies already developed. Additionally, specific client or type matters may be created with individual email type folders to further aid in retention, indexing, and retrieval.

[NOTE: We recommend you seek legal counsel with regard to policy and compliance for your business messaging systems.]