US e-discovery changes

Eric Sinrod writes on c|net about a big change in US law coming up on 1 December 2006.
>The new rules are designed to set out early structure, uniformity and predictability when it comes to e-discovery. Yet, from the very start of a case, the parties need to start evaluating with their IT teams and outside counsel what they need to do to produce relevant electronic data. That effort can be enormous, as data can be located live on a network across multiple servers, on backup tapes, on hard drives, laptops and personal digital assistants.

However, Mr Sinrod goes on to say that, far from reducing costs and streamlining the litigation process, the revision to the Federal Rules of Civil procedure may have the opposite effect, especially when issues as to whether a huge effort (at great cost) is worth making for a document of arguable relevance and value.

Sinrod points to how such difficulties manifested in z4 Technologies -v- Microsoft when an e-mail supplied to MS attorneys a year before deposition of a particular witness had been withheld until questioning in the deposition revealed its existence. Big mistake:
> Once that was revealed, the presiding federal judge ruled that the e-mail was favorable to the plaintiff’s position, which did not help the cause of the defense in dealing with its failure to produce.

> The judge’s decision also pointed out that Microsoft failed to correct deposition testimony eight months before the start of the trial stating that an alleged database did not exist. In addition, the judge concluded that Microsoft neglected to apprise the plaintiff that the database could be located in a sub-folder on a particular CD that had been produced.

> As a result of this and other (mis)behavior, the judge determined that the defense had engaged in litigation misconduct and ordered Microsoft to pay additional damages of $25 million, as well as almost $2 million in attorney’s fees to the plaintiff.

One suspects that the size of the additional damages may indicate a view on the part of the judge as to whether this was a genuine mistake in assessing the evidential value of the email or something more intentional. The email was apparently rather helpful to the plaintiff.