Legal news and trends for Canadian in-house counsel and c-suite executives
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FOR DOCUMENT-RETENTION POLICIES 1 Have one. 2 Acknowledge that not everything should be retained forever. 3 Open the lines of communication with your IT department to identify and then classify the information based on business function. 4 Establish the appropriate retention period for various types of documents in consultation with experts. 5 Build into the policy a procedure for handling litigation hold letters. 6 Ensure the policy deals with both paper and electronic documents. 7 Put the policy in place and follow it. 8 Regularly educate employees, management, and C-level decision- makers about the policy, its applications, and what will happen if it isn't followed. Train anyone who uses a computer or handles company documents about what they need to be doing (and not doing). 9 Audit the policy regularly on its face and at ground level. Look at it periodically to see if it needs to be changed to include new technology or address obsolete technology. 10 Consider having a documents-management clerk or someone whose job it is to enforce the policy and stay tuned in to changing technology and legal issues. "Usually, [clients] are concerned about the time and costs associated with setting a document-retention policy up." — KELLY FRIEDMAN, OGILVY RENAULT LLP According to Heath, Agrium started developing its document-retention poli- cy about four years ago by classifying its records and setting up a disposition and destruction schedule for those specific record types. Among the company's considerations in formulating the policy were the rising costs of storage and the difficulty with document retrieval. "We're really operating three business- es, so we had to tailor to each one, de- signing retention policies in accordance with each jurisdiction." The process is still being rolled out across the organi- zation, and Heath says they continue to look at changing technology to deter- mine whether and how it fits into the overall policy. Where the policy was first geared toward paper documents, it now includes e-mail and electronic data. The best advice on the subject, ac- cording to Friedman, is "once you have a policy, adhere to it." She says that the case law is clear, in that if your policy says you're going to keep contractual documents for a pe- riod of 15 years, and you find yourself in court where it's revealed that a relevant document was destroyed in year 12, there will likely be an adverse inference drawn. Friedman, who lectures often on the subject of document retention, says that, in this situation, courts will ask why the policy wasn't followed and make certain presumptions based on the response. In many cases it's a presumption that could prove fatal. Citing several Canadian cases on the issue of a corporation's need for a docu- ment-retention policy, Friedman says the jurisprudence demonstrates that an ad- verse inference can also be drawn where a C ANADIAN Lawyer INHOUSE A UGUST 2008 45 party fails to produce a document. In Ontario v. Johnson Controls Ltd., a negligence case involving a piece of ice that fell from an office building in Sud- bury, Justice Donald R. Cameron said, "The absence of a document retention policy also constitutes a failure to recog- nize the court's ability to draw an adverse inference in certain circumstances for failure to produce a document and a fail- ure to address the practical need to retain documents once notice of a proceeding has been received." While the experts agree that docu- ment-retention policies can often pro- vide the means to effectively navigate the stormy world of litigation, the difficulty facing in-house counsel is getting "buy- in" from the top. One strategy could be demonstrating the cost-savings associated with proper storage and retrieval services, while an- other might involve a presentation on the litigation costs of a hypothetical claim. "With this issue, you're always trying to capture people's attention and make them understand that this is something valuable," says Heath. "Especially when they're balancing competing business interests, deadlines, and managing a bottom line." IH