Liability Briefing on e-Business

Why is a data file retention and archiving policy important?
Lifespan: ‘dead’ and ‘live’ archives
Legal status
QA considerations
Back-up/disaster recovery
Hardware, software, people

Why is a data file retention and archiving policy important?

As businesses become increasingly reliant on electronic data transfer (eg email, extranets etc), policies & procedures for retaining and, later, archiving electronically generated documents have significant importance. Many businesses remain uncertain about the storage of data electronically and continue to retain hard copy documents as a means of back up. As clear procedures are implemented and maintained for the storage of data electronically, the retention of hard copy documents will become less common on an increasing basis. As such, the move towards the “paperless office” may become a reality.

Lifespan: ‘dead’ and ‘live’ archives

Any policy for storing, archiving and where appropriate disposing of electronic data should follow that for hard copy documents. The general rule of thumb is to retain/archive key project documents for a period of no less than 17-20 years. This is because of the laws relating to the periods within which claims may be brought. In the event of a claim being made against the firm, or the firm wishing to make a claim, relevant documents will need to be readily accessible. This will be of utmost importance where eg a claim is made via the more speedy dispute resolution procedures such as adjudication. Here the adjudicator will expect to see all relevant documentation to enable him/her to reach a decision within the 28 day period.

Legal status

Electronically generated data is likely to be admissible as evidence in court if the procedure for creation and storage is in accordance with relevant standards. Emails are communications just like letters. Cases in court now frequently include evidence of email exchanges. However, receipt of an ordinary email is only confirmed if the receiving party acknowledges receipt. There is no certainty that the email has been received in the absence of such an acknowledgement.

Various rules of law apply to the admissibility of evidence (eg under the Civil Evidence Act, Civil Procedures Rules), though there is no specific piece of legislation dealing with the admissibility of electronically generated data.

Because electronically generated data can easily, instantly change without leaving any obvious trace, you will need to be able to show:

• that the data is original
• where it originates
• that the record details, eg date/time, are accurate

Electronically generated data is likely to be admissible as evidence in court if the procedure for creation and storage is in accordance with relevant standards. The pace of development in IT means that an up to date rule/standard could never be produced. There are three relevant British Standards.

Compliance with these standards will not guarantee legal admissibility. However the standards may be adopted as a benchmark when developing its eArchiving procedures.

QA considerations

Any retention/archiving policy will need to be auditable for the purposes of QA. The policy should offer clear guidance on various procedures including:

• what data should be retained and what may be discarded
• how to archive to ensure that documents, drawings etc cannot be altered without leaving an audit trail
• knowledge management - ensure searchability by adopting a filing system across the firm to enable a fast and effective search facility
• appropriate retention dates
• regular monitoring of software to ensure that archived documents are ‘readable’ (i.e “backwards compatibility”)

Back-up/disaster recovery

Procedures will be needed on system back-up, for example, back-up by electronic disk cassettes held remotely, or electronic or data transfer as part of back-up routines. Also a disaster recovery programme (where data, software and server in a duplicate system are held at another location). What measures are reasonable to take should follow a risk assessment undertaken by the business, not only with a view to avoiding liability to customers, but also to safeguard the business itself.

Hardware, software, people

The success of any eArchiving strategy is dependent not only on equipment and technology but, vitally, people. Of crucial importance is the training of staff. As with any other risk management strategy, such investment should not be overlooked. The experience gained by individuals on specific projects can also be captured via eArchiving, through the adoption of a searchable knowledge management procedure.

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