New Federal Rules of Civil Procedure (FRCP) amendments to Rule 37

January 7, 2016 Kristin Mager

Noteworthy changes have been made to the Federal Rules of Civil Procedure (FRCP) affecting the legal discovery of electronically stored information (ESI) as of December 1, 2015.  These amendments were in response to the growing volume of ESI targeted in the large number of civil litigations.  Revisions to these rules have not taken place since 2006. In the interim, issues arising from the cost of processing, reviewing and producing ESI plus the confusion in contradicting court opinions required further clarification for legal and eDiscovery professionals.

Today, the average organization has terabytes of data that companies must manage and this data can be subject to legal discovery. Because conflicting interpretations of the previous guidelines, many corporations are taking an expensive ‘preserve everything’ approach to avoid testing the ambiguity of the earlier iteration of the ‘Safe Harbor’ rule.   The latest amendments to Rule 37 outline a new approach to dealing with the loss of ESI.  They clearly focus on resolution to ESI loss only when ‘reasonable steps’ have failed with the most serious sanctions strictly reserved for findings of a clear ‘intent to deprive’.

The new rule states:

New Rule #37Failure to Make Disclosures or to Cooperate in Discovery; Sanctions

 (e) Failure to Preserve Electronically Stored Information. If electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the court:

(1) Upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice; or

(2) Only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation may:

(A) Presume that the lost information was unfavorable to the party;

(B) Instruct the jury that it may or must presume the information was unfavorable to the party; or

(C) Dismiss the action or enter a default judgment.

 

How can you make these changes benefit you?

Having well-defined policies and procedures in place is critical to prove that ‘reasonable steps’ were taken to protect ESI.  For example, if you have a retention policy that states certain data will only be stored for one year and this ESI is deleted under your well-defined policy, your position is much more defensible than one where there is no policy in place or where deletions are performed in an ad hoc, poorly audited manner.  To further strengthen your positon, your polies must be in compliance with federal, state and other important guidelines.  If there is no value in the information that you are storing or the ability to extract value no longer exists, then this data needs to be legally and defensibly deleted.   Governing your information via policy, procedure and automated software will not only help when litigation threatens, but it will also improve efficiency in eDiscovery by helping to reduce costs incurred with data collection and review.

How can you safeguard your organization? There are many third party eDiscovery and information governance tools available, such as Sherpa’s Altitude IG platform, which can help you enforce your policies and procedures. Close the loop among team members with predictable, repeatable and defensible processes. Free up your teams’ time to focus on their higher level objectives and enjoy the confidence you can meet current and future organizational demands.

For more information on Altitude IG, check out our two-minute video tour for free!

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