‘ Should’ve, could’ve, would’ve” are among the last words lawyers want to hear from their clients while in the midst of litigation.
Yet, all too often, it is only after litigation has begun that corporate parties get a crash course in the rules of evidence and procedure. In the spirit of the adage “learn from the mistakes of others, as you won’t have time to make them all yourself,” we have compiled a list of four internal policies that companies should consider adopting to best avoid unwelcome surprises.
It is no secret that much of today’s internal corporate communication occurs electronically. To the chagrin of their authors, when litigation arises, seemingly private conversations often wind up in the hands of opposing parties or a judge.
Indeed, internal e-mails have been used by opposing counsel to colour the file, impugn a party’s credibility or simply to embarrass a witness and watch them squirm during discovery or cross-examination.
Canadian courts increasingly favour the broad disclosure of information before and during trial.
Companies should adopt policies reminding all employees that their audience is often a bigger (and tougher) crowd than they had anticipated.
A secret shared is no longer a secret
Most companies are well aware that solicitor-client or litigation privilege can protect sensitive information from being disclosed to opposing litigants. Often, however, businesspeople do not realize that these privileges can be waived — and that such waiver can be inferred by careless internal e-mail practices.
Indeed, a component of the solicitor-client and litigation privilege is a party’s intent to keep such information confidential. As such, a simple “cc” of in-house counsel does not necessarily ensure that a communication remains covered by privilege.
Therefore, e-mail communications containing sensitive or privileged information should only be addressed to the required recipients with the clear indication that the communication is confidential. No third parties (aside from external counsel) should be copied on such e-mails. Moreover, such e-mails should not be forwarded, as this could jeopardize the ability of the corporation to invoke privilege should litigation arise.
Categorize and preserve important info
Businesses often struggle with masses of data stored in employees’ inboxes and hard drives, especially when an employee leaves a company. All too often, a decision is made to either delete the employee’s inbox or preserve it indefinitely. Without proper policies in place, neither solution is ideal in a litigation context.
For example, where a departed employee helped negotiate contracts, portions of that employee’s inbox could prove to be highly relevant if the corporation is later sued on the basis of these contracts.
Companies could consider adopting a policy requiring employees to file and organize important e-mails in separate folders. Where a document is “privileged,” employees should label it as such.
When a corporation becomes involved in litigation, the discovery process often requires that it search through swathes of data in inboxes, shared drives and the cloud to find responsive information. Companies generally mandate counsel to review the documents for relevance and privilege. Where companies fail to properly organize and sort information at the outset or where a company blindly conserves all data, the process can quickly cause exorbitant costs and strain on the company.
Enforce sound policies
Corporate governance policies must be more than a simple “wish list.” A company’s businesspeople and in-house counsel should assess risks in advance and determine which practices should — and can — be implemented.
In a litigation context, failure to do so could result in a finding of liability. Indeed, courts have time and again found corporate parties to be negligent where its governance rules were not followed.
These are but a few practices that companies should consider adopting and implementing early on so as to be best prepared for litigation.
Karen M. Rogers and Daniel Baum are lawyers with Langlois LLP.