Costly backup

FRAMINGHAM (11/12/2003) - E-mail, it's gonna cost you. The cost of litigation in suits where the parties involved need to access information stored in archived e-mail is rising. The cost to restore archive tapes and search them for relevant data ranges from US$1,000 to $3,000 per tape. As a result, companies are increasingly asking the courts to shift some of the burden to the party that requests the information, according to Margaret Rimmler, vice president of marketing at document storage company Iron Mountain Inc.

That was the problem that confronted U.S. District Court Judge Shira A. Scheindlin in a recent employment discrimination case pitting Laura Zubulake, a former executive of UBS Warburg, against her old employer.

Scheindlin set a new precedent by asking Zubulake to pay 25 percent of the $175,000 cost to recover e-mail messages from UBS backup tapes that Zubulake felt might contain information or correspondence relevant to her case.

In her decision, Scheindlin rewrote a previous test -- known as the Rowe test -- to determine who should bear the cost of discovery, saying that the Rowe test tended to skew courts in favor of having requesters bear the entire cost of discovery, and that such a bias could discourage some from seeking justice.

But companies worried about such costly requests need to do more than rely on judges to keep litigation costs fair and reasonable, according to Jennifer Goddard, an attorney in the Employment Practice Group of Boston law firm Testa, Hurwitz & Thibeault LLP.

E-mail backup tapes can be a gold mine of useful information, and enterprising attorneys know it, she says.

"This is happening more and more. Plaintiffs are demanding that companies produce messages on e-mail servers, handhelds and backup tapes," Goddard says.

Companies that are worried about exposure to such whopping legal bills need to develop a comprehensive and consistently applied policy for document retention. That policy should spell out what type of information is retained and for how long.

"That way, if and when there is a lawsuit, you can safely say, 'Because we applied our document retention policy, we only have a few backup tapes that have relevant information on them,'" Goddard says.

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