On December 1 the new electronic discovery rules take effect in Federal court. The new rules now obligate companies to address e-discovery issues within 30 days after a lawsuit is filed. Under the old rules, companies could just wait for a discovery request, which could take up to a year after the initial filing of the lawsuit. The new rules mean that all companies, large and small, must pull their socks up and get serious about managing their electronic records.

The good news is that under the new rules, the court must now recognize that a company is not able to retain all records and will not be sanctioned if a document is deleted in good faith: ‘Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system.’ This means that if you are not able to produce a particular document but can prove that you have implemented a retention system and that this document was deleted in good faith, you will probably not be sanctioned for this.

Further good news is that if a company can prove that producing certain electronic records would cause undue burden and costs, the court may decide that the documents will not need to be submitted: ‘A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden and cost’. Beware though, that the court may still decide that the documents must be produced if the requesting party shows good cause.

All in all, the changes are an incentive for companies to think about how they manage their electronic records and to put a formal retention program in place. Check back in a few days for several tips on how your company can show good faith to a federal court.