January 30, 2013
In the United States, the amended Federal Rules of Civil Procedure direct litigants on what subject matters are in the purview of the Court to rule upon; however, the rules themselves do not provide explicit guidance on how to physically handle electronically stored information (ESI). As a result, the American system has recognized a limited safe harbor from sanctions arising from the loss of ESI due to the “routine, good faith operation of an electronic information system.” However, the application of this rule requires that the producing litigant demonstrate that it tried to preserve in good faith evidence it knew or should have known to be relevant to reasonably anticipated or commenced litigation. In addition, the amended rules address digital spoliation by recognizing that it can occur in various ways and can result in varying penalties depending upon the facts and legal context in which the claim arises.
While I am not advocating for the same rules as the EU Directive, the lack of uniformity on accessing and transferring ESI will continue to drive-up expenses and complicate cross-border litigation as ESI becomes further ingrained into disputes. In a world where businesses are becoming more reliant on “the cloud” for hosting and transferring ESI, parties to cross-border disputes (both litigation and ADR) can only benefit from uniformity in preservation of ESI. For example, the proposed amendments to the EU Directive will protect personal data everywhere in the EU as well as outside the EU.
Preservation is a component to the EU Directive amendments; however, the obligation of preservation is much more lenient pre-anticipated litigation than the EU counterpart which requires preservation by statute. As a result, a lack of uniformity between countries handling the same ESI between the EU and elsewhere creates the risk of spoliation and other complications, which could undermine one’s claim or defense. In fact, the advent of e-discovery in cross-border disputes has impacted the manner in which a case may proceed altogether. There are many areas of the law—such as trade secrets and intellectual property—where the provision of evidence by litigants is not uniformly handled. Therefore, if trade secrets (or technology subject to trade secret law) are at issue in a cross-border dispute, the manner in which the ESI is accessed in one country may be illegal in another.
Understanding the distinctions between the US and EU are critical during the discovery phase, as missteps can lead to additional complications, costing valuable time and money. In the next addition to this series, I will look at the e-discovery systems across other major jurisdictions, including Australia, New Zealand, and Singapore.