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IM on the Money - Issue Seven

Do You Have An ESI Disclosure Readiness Plan?

The majority of business communications are now electronic and when it comes to the stage in civil litigation proceedings when the parties must give disclosure of relevant documents, this applies equally to electronically stored information (ESI) as to paper documents.

It must not be thought that electronic disclosure is something complex that applies only to heavyweight cases – it applies equally to the most straightforward of cases and is straightforward in concept. In addition to documents stored on computer systems, PCs and laptops, back-up systems and servers it includes voicemail, text messages and other information on smart phones and memory sticks, all devices in common everyday use. E-disclosure may be relevant to complex issues or equally an e-mail or voicemail may determine a straightforward issue as to whether a disputed instruction was given or a disputed transaction authorised.

That said how to manage electronic disclosure effectively and efficiently is not an easy issue, though it is one the courts expect organisations to anticipate. If they do not, potential litigants face serious consequences if the court finds that proper disclosure has not been given; inferences adverse to their case may be drawn or costs sanctions imposed. In a recent case the successful Bank was deprived of 50% of its costs because of its inadequate conduct of e-disclosure, including the failure to preserve relevant ESI before the proceedings.

The difficulty lies with the potentially huge volume of ESI and number of places where it might be stored and how to safely preserve, retrieve and produce it for disclosure without inadvertently altering it in the process. And the digital landscape is constantly evolving with, for example, cloud computing and increased use of social networking sites where relevant information may be held.

Importantly, potential litigants need to be ready to deal with these issues as soon as a dispute arises and ensure that all discloseable documents, including ESI, are identified and preserved. Ideally organisations should have a ‘data map’. They must be in a position to put in place effective ‘litigation hold’ procedures to stop any routine destruction or deletion of relevant documents, including ESI, as soon as litigation is contemplated.

Once litigation is underway, they must be ready to exchange information in relation to document retention policies and where and what ESI may be held with the other party at an early stage, with a view to agreeing and assisting the court in directing disclosure in a proportionate and cost-effective manner.

This is required by the Practice Direction for the Disclosure of Electronic Documents in multi-track cases (typically over £25,000) but the Practice Direction can be applied in any case where appropriate.

Document management, retention and preservation policies should be reviewed by legal and IT teams to ensure that an up to date strategy is in place to deal with the challenges and risks involved in the disclosure process in litigation, in particular those associated with ESI.

For more information or to discuss in more detail contact Janice McMullen at janice.mcmullen@irwinmitchell.com.

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