Implementing An Electronic Records Policy As A Means 2
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Transcript of Implementing An Electronic Records Policy As A Means 2
American Bar Association
Forum on the Construction Industry
Annual Meeting – 2011
David DeusnerBradley Arant Boult Cummings LLP.
Norman JetmundsenVulcan Materials Company
Workshop A
Implementing an Electronic Records
Policy as a Means of Reducing
Discovery Cost
Fantasy Park Project
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Fantasy Park
Project
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Owner Profile
• Developer with diverse investment properties
• Multi-national company
• Several offices with over 1,000 employees
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General Contractor Profile
• Construction contractor for 8 years
• Involved in numerous complex
construction projects
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Fantasy Park Project
• 2 year, $50 million project
• 1 year late due to changes and delays
• Thousands of electronic documents and millions
of emails exchanged between:
Owner
General Contractor
Architect
Subs
Others6
Owner’s Position
• Claims $10 million in cost overruns and lost
profits
• 6 months prior to filing suit, sends letter to
Contractor
You breached the contract
I have suffered damages
Pay up!
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Contractor’s Position
• Responds saying delay was caused by Owner and
its Architect
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Lawsuit
• 6 months later, Owner files suit seeking $10 million
• Both sides meet with counsel to discuss:
Facts
Strength of claims
Costs of litigation, including discovery
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Owner’s Lawyers
• Decent case
• Contractor may have valid defenses, but must
go through discovery phase
Estimate that electronic discovery will cost
$500,000
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Contractor’s Lawyers
• Excellent case
Delays clearly the fault of Owner and Architect
Recommend filing counterclaim for damages
• Rough valuation of Owner’s claims = $300,000
• Rough valuation of Contractor’s counterclaims =
$3,900,000
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Contractor’s Lawyers
• Two major problems:
Some employees deleted emails at completion of
project because they were never directed to
preserve.
Laptops from the job-site were sent back to
corporate office - IT dept. immediately wiped hard
drives to re-issue to other job-sites
Estimate electronic discovery will cost $5 million
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Result
• Contractor forced to settle lawsuit
• Why?
Discovery costs more than the net value of the
claim
Potential exposure for employees’ deletions of
emails
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What Was the Difference?
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Owner
• Document retention policy
• Email archive
• Document management system
• Litigation hold policy and procedure
• Sophisticated e-discovery counsel
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Owner e-discovery Cost
• 2 million emails/yr x 3 yr = 6 million emails
• Emails
Non-Records deleted at 180 days
Indexed and archived
Searchable
• Emails for review = 1 million = ~100 GB
• Total projected cost: $500,000
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Contractor
• NO document retention policy
• NO email archive
• NO document management system
• NO litigation hold policy and procedures
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Contractor e-discovery Cost
• 2 million emails/yr x 3 yrs = 6 million emails
• 5 years in business (before this project) x 2 million
emails/yr = 10 million additional emails
• Closet full of back-up tapes with little identification
• Exposure to spoliation sanctions
• Total projected cost: $5 million
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Lessons Learned
• Electronic Records Policy
• Litigation Hold Policy
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Electronic Records Policy
• Key concerns:
Electronic records management TEAM to create
WRITTEN policy and procedures
Develop data map to identify all sources of potential ESI
Determine what kinds of Records to retain and their
value and routinely and systematically purge non-records
Eliminate .pst files and centralize email
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Electronic Records Policy
• Key concerns:
Train employees on email usage
Monitor compliance and/or automate policies
Eliminate backup tapes
Ensure that ell electronic data is in a searchable
format where it resides
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Litigation Hold
• Key concerns:
Trigger: reasonable anticipation of litigation
Written legal hold directive
Supervise and monitor compliance
Provide feedback mechanism and follow-up
Third parties in possession of information
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Q & A
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When All Else Fails
• Video clip goes here.
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