Electronic discovery, or eDiscovery, can play a central role in the corporate litigation process, and is increasingly expensive as companies retain more data and employees store that data in diverse locations.
Unlike regulations such as Sarbanes-Oxley, which placed many new requirements
directly on organizations with a deadline for compliance, the electronic discovery
amendments affect them only through the litigation process. Many companies faced
with tight budgets aren’t preparing in advance for litigation. This is clearly their right to
do so. This bad decision can lead to astronomical costs of litigation when it finally does
Penalties for failing to comply with a duty to preserve data range from monetary
sanctions all the way to an “adverse inference” instruction. In this situation, a jury is
instructed to assume any files and communications not produced were
harmful to the defendant. Such an instruction all but guarantees defeat for a defendant.
Increasingly, judges are also holding attorneys themselves responsible for the negligent
acts of their clients in preparing for discovery.
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