Expectations of Counsel are Higher Following the Delaware Court of Chancery’s Issuance of its Preservation Guidelines

Chad McManamy Following the trend of state legislature’s adoption of electronic discovery rules and state court opinions refining e-discovery obligations, the Delaware Court of Chancery recently issued a short set of guidelines for counsel appearing in their Court entitled, the Court of Chancery Guidelines for Preservation of Electronically Stored Information (“Guidelines”). The Guidelines are limited in scope to preservation obligations of electronically stored information (ESI). Despite the narrow reach, the Court appropriately addresses the most important aspect of ESI discovery issues first --- preservation and collection. Without proper preservation and collection, all other processes suffer or fail.

The Guidelines, rooted in a common law duty, call for counsel to instruct their clients to take the reasonable steps necessary to “act in good faith and with a sense of urgency to avoid the loss, corruption or deletion of potentially relevant ESI” (emphasis added). At the very least, the Guidelines call for in-house and outside counsel to:

1. Take a collaborative approach to the discussion of the scope of the ESI preservation process by bringing representatives to the table with knowledge of the environment (reflective of The Sedona Conference Cooperation Proclamation);

2. Issue written legal hold notifications to custodians of potentially relevant ESI that contain instructions regarding the preservation of ESI in the custodians possession; and,

3. Document the steps taken to prevent the destruction of potentially relevant ESI.

The Guidelines take a common sense approach to proper ESI preservation, instructing practitioners to consider all of the possible locations a custodian may have potentially relevant data and to discuss a client’s business processes to uncover as much of the process as possible. With all the variables present in an organization’s business process, only a thorough examination with the key players will withstand the broad standards required by the Court. Of particular concern to counsel should be the statement instructing them to “take reasonable steps to verify information they receive about how ESI is created, modified, stored or destroyed.” It will no longer be defensible to accept the word of a single point of contact at your client when it comes to preservation of ESI; you will have to go deeper.

To bolster the defensibility of the preservation process, counsel should employ technology that does not rely on preserving the ESI in place but instead collects a copy of the potentially relevant ESI and preserves the copy in a forensically-sound manner. And in light of the recent federal opinions highlighting the integral nature of metadata, counsel should consider preservation of metadata as important as preservation of the ESI itself. Taking this approach, the risk of loss or deletion is minimized or eliminated and verification becomes much simpler for counsel.

A technology solution that allows organizations to minimize the loss or destruction of potentially relevant data is Guidance Software’s EnCase® eDiscovery. The solution allows preservation of ESI across a network in a live environment with minimal business interruption in a highly defensible process. Plus, with Guidance Software's long-established background in computer forensics, there is no question about the authentication of the preserved data, as an exact clone of the original file is stored in a logical evidence file with all original metadata intact. Not only does EnCase® eDiscovery allow an organization to preserve through the collection of ESI in a live environment, it also meets the Guidelines suggestion for issuing a written legal hold notification and logs all of the steps taken during the preservation/collection process.