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Privacy statement - Terms and conditions

reducing the electronic paper trail - why it's good to talk

1 October 2010

Recent developments highlight the challenges faced by in house lawyers in this information age and why it could be better to talk than write. Most organisations now generate a mass of electronic data. This presents enormous difficulties for in house counsel responsible for disseminating legal advice and managing internal communications with a view to protecting privilege and anticipating disclosure requirements in any future proceedings or investigations.

Talk to your IT team

Recent cases and rule changes emphasise the need for organisations to be litigation-ready. As soon as contentious proceedings are contemplated, companies come under a duty to act swiftly to preserve potentially relevant material. The plethora of information platforms can make it difficult to track down documents and automated e-mail and data deletion programmes make electronic documents extremely vulnerable to destruction. The case of Earles v Barclays Bank Plc is a particularly salutary tale. Despite winning, the bank had its costs halved for failing to address the issue of electronically stored documents. Both the banks in house legal team and its external lawyers were heavily, and publicly, criticised by the judge for allowing critical documents to be destroyed and for failing to search for particular electronic documents.

The courts are concerned that, at a time when the majority of commercial documents are electronic, parties are just not dealing with them adequately. The clear message is that this will no longer be tolerated. There are signs that we may be moving towards the US concept of "litigation hold", where organisations are expected to have formal document retention and disposal procedures able to be suspended the instant proceedings are anticipated in order to preserve potentially relevant material.

From 1 October, new court rules place greater emphasis on electronic documents. Where they apply, parties must collaborate and agree on how electronic documents should be dealt with and the efforts that should be made to unearth potentially relevant material. Electronically stored information must be handled in a proportionate and cost-effective manner and the court will expect to be presented with costed options.

This is only possible with full knowledge of the extent, nature and location of electronic data within an organisation and an understanding of how it is processed, so its worth a dialogue with the IT team.

Is your organisation litigation-ready?

  • Do you have a well thought out document retention and data destruction policy?
  • Have you identified the moment when data is destroyed?
  • Is this appropriate, given the nature of the organisation?
  • Is the policy applied consistently across the organisation?
  • Can automatic e-mail deletion and data destruction processes be suspended rapidly?
  • Are there communication channels in place to let relevant staff know quickly?
  • Are there adequate procedures in place to be able to identify, secure and retrieve potentially relevant data?

The new rules re-emphasise the duty to take steps at a very early stage to preserve potentially relevant documents. It may be worth consulting specialist IT service providers. They work closely with lawyers to determine the best and most cost effective ways of preserving, retrieving and disclosing electronic data and can support with giving costed options to the court.

Competition law - talk to external lawyers

The ECJs recent ruling in Akzo Nobel Chemicals Ltd is unwelcome news for in house lawyers. It confirms that their advice is not privileged in the context of EU competition law investigations carried out by the European Commission. The reasoning is that employed lawyers cannot be truly independent because they cannot ignore the commercial strategies of the employer. According to the ECJ, only the advice of independent lawyers qualified in the EEA is covered by legal professional privilege. What are the practical implications of this?

  • You must find out at the beginning of any competition investigation whether it is under national or EU law. If it is the latter, your advice will not be privileged. This is also the case where the OFT assists the Commission with an investigation although where the OFT carries out an investigation on the Commissions behalf UK rules apply.
  • Consider taking external advice from an EEA qualified lawyer in competition law matters to ensure privilege applies.

Legal advice - talk to people

Its worthwhile organisations reviewing internal communications policies with privilege and disclosure issues in mind:

  • Avoid creating unnecessary records in the first place; consider giving advice on sensitive matters orally instead. Any written advice that is given should be clearly marked as "privileged and confidential" and filed separately.
  • Legal advice - as opposed to litigation - privilege only protects communications between a lawyer and "the client" but, following the House of Lords Three Rivers case, not all employees of an organisation are counted as "the client". Only those individuals whose role it is to request and receive legal advice on a particular issue are treated as the "client". Where litigation is not in prospect, communications should be restricted to those who really "need to know", so review e-mail circulation lists to make sure they are no wider than necessary.
  • In house lawyers should always be involved at the outset whenever legal issues arise so that privilege is properly considered before potentially damaging, disclosable material is created.

training and events

17Oct

In-house lawyers' update Birmingham office

Our next in-house lawyers' sessions will give in-house lawyers the tools and strategies for dealing with some of the problems caused by recent changes to the law.

View event

24Oct

Claims Club Manchester office

We will be discussing the Human Rights Act, school claims and a legal update on 'hot topics'.

View event

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Upcoming webinars

Care Quality Commission and health & care regulatory update

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One key legislative area for the health sector which is always topical and provokes debate even without the added complication of the Brexit question is procurement law. Add in the issue of Brexit and the debate intensifies and possible outcomes multiply.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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