The Impact of E-Discovery on Arbitration

Ever wondered how technology is changing the discovery process? This weekend, I stumbled upon an article written by Peter S. Vogel about the impact of electronically stored information (“ESI”) on litigation and arbitration.

Here is an excerpt:

In 2006, the federal rules of civil procedure (and since then, many state rules as well) were changed to specifically deal with ESI. If you have been reading any reports of trials, you will know that there have been some very high-profile companies that have lost millions of dollars as a result of destruction of emails (Zubulake v. UBS), failing to provide all 14,000 backup tapes of emails during discovery (Coleman v. Morgan Stanley), or hiding more than 41,000 relevant emails (Qualcomm Inc (Nasdaq: QCOM). v. Broadcom). All of these cases could have avoided such litigation disaster had the lawyers and ITbeen communicating.

When evidence has been destroyed (spoliated), a judge or arbitration panel can grant a verdict against the destroying party, fine the party, or issue an adverse inference to the jury. An adverse inference directs the jury to assume that the reason the party destroyed the evidence was that it was adverse to its claims in the lawsuit. Most of the time, juries will accept the judge’s instructions and agree that the evidence destroyed was damaging, which is what happened in the Zubulake and Coleman cases.

Mr. Vogel concludes that:

Judges and arbitration panels are having to come to grips with the fact that they have to understand ESI, since every case has some critical evidence that is only electronic. However, only about 5 percent of the cases filed actually go to trial, and most litigation is settled during the discovery process.

Read the full article: The Stunning Impact of E-Discovery on IT, E-Commerce Times, Peter S. Vogel, July 9, 2009.

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