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Knowing how and for what period of time to maintain your business records for possible future use in litigation and/or government review is confusing and the rules seem to change with the introduction of each new method of creating information. In addition to easily recognized documents such as hard copy and electronic form contracts and formal correspondence, over the past several years information created and stored on personal devices such as in email accounts and cellular telephone text messages has come under requirements for retention. Every jurisdiction in the world has (constantly evolving) laws and rules for retaining such information for later retrieval.
In the United States the Federal Rules of Civil Procedure (FRCP) governs the treatment of certain documentation. The FRCP mandates preservation of information necessary for use “in anticipation of litigation” – historically a hotly contested standard. FRCP 37 was amended in the last year to specifically detail a litigant’s required actions to identify and preserve electronic information “in anticipation of litigation.” Failure to follow appropriate steps resulting in “spoliation” of potential evidence results in steep sanctions, possibly fatal to a litigant’s case. Accordingly, businesses are advised to have legal counsel carefully examine their records retention policies and procedures and modify them as necessary to assure they will not later find themselves subject to severe penalties in the case of a litigated dispute. Your Ally Law member firm has attorneys with extensive experience in determining how to apply legally-required practices in business record retention and can help you draft, implement, and adhere to such policies.
In addition to the FRCP, other rules may apply to specific documents such as, for instance, those promulgated by the U.S. Internal Revenue Service (see IRS How long should I keep records). Meet with your Ally Law member firm attorney to review the types of records you create to determine which and for how long you should retain categories of documentation. For more information about our services in this area, contact us at yourally@ally-law.com.
By David Glod of Rich May PC.
