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Archive for March, 2012

eDiscovery Down Under: New Zealand and Australia Are Not as Different as They Sound, Mate!

Thursday, March 29th, 2012

Shortly after arriving in Wellington, New Zealand, I picked up the Dominion Post newspaper and read its lead article: a story involving U.S. jurisdiction being exercised over billionaire NZ resident Mr. Kim Dotcom. The article reinforced the challenges we face with blurred legal and data governance issues presented by the globalization of the economy and the expansive reach of the internet. Originally from Germany, and having changed his surname to reflect the origin of his fortune, Mr. Dotcom has become all too familiar in NZ of late. He has just purchased two opulent homes in NZ, and has become an internationally controversial figure for internet piracy. Mr. Dotcom’s legal troubles arise out of his internet business that enables illegal downloads of pirated material between users, which allegedly is powering the largest copyright infringement in global history. It is approximated that his website constitutes 4% of the internet traffic in the world, which means there could be tons of discovery in this case (or, cases).

The most recent legal problems Mr. Dotcom faces are with U.S. authorities who want to extradite him to face copyright charges worth $500 million by his Megaupload file-sharing website. From a criminal and record-keeping standpoint, Mr. Dotcom’s issues highlight the need for and use of appropriate technologies. In order to establish a case against him, it’s likely that search technologies were deployed by U.S. intelligence agencies to piece together Mr. Dotcom’s activities, banking information, emails and the data transfers on his site. In a case like this, where intelligence agencies would need to collect, search and cull email from so many different geographies and data sources down to just the relevant information, using technologies that link email conversation threads and give insight into a data collection set from a transparent search point of view would provide immense value. Additionally, the Immigration bureau in New Zealand has been required to release hundreds of documents about Mr. Dotcom’s residency application that were requested under the Official Information Act (OIA). The records that Immigration had to produce were likely pulled from their archive or records management system in NZ, and then redacted for private information before production to the public.

The same tools are needed in Australia and New Zealand to build a criminal case or to comply with the OIA that we use here in the U.S for investigatory and compliance purposes, as well as for litigation. The trend in information governance technology in APAC is trending first toward government agencies who are purchasing archiving and eDiscovery technologies more rapidly than private companies. Why is this? One reason could be that because the governments in APAC have a larger responsibility for healthcare, education and the protection of privacy; they are more invested in the compliance requirements and staying off the front page of the news for shortcomings. APAC private enterprises that are small or mid-sized and are not yet doing international business do not have the same archiving and eDiscovery needs large government agencies do, nor do they face litigation in the same way their American counterparts do. Large global companies should assume no matter where they are based, that they may be availed to litigation where they are doing business.

An interesting NZ use case on the enterprise level is that of Transpower (the quasi-governmental energy agency), where compliance with both the “private and public” requirements are mandatory. Transpower is an organisation that is government-owned, yet operates for a profit. Sally Myles, an experienced records manager that recently came to Transpower to head up information governance initiatives, says,

“We have to comply with the Public Records Act of 2005, public requests for information are frequent as we and are under constant scrutiny about where we will develop our plants. We also must comply with the Privacy Act of 1993. My challenge is to get the attention of our leadership to demonstrate why we need to make these changes and show them a plan for implementation as well as cost savings.”

Myles’ comments indicate NZ is facing many of the same information challenges we are here in the US with storage, records management and searching for meaningful information within the organisation.

Australia, New Zealand and U.S. Commonalities

In Australia and NZ, litigation is not seen as a compelling business driver the same way it is in the U.S. This is because many of the information governance needs of organisations are driven by regulatory, statutory and compliance requirements and the environment is not as litigious as it is in the U.S. The Official Information Act in NZ, and the Freedom of Information in Australia, are analogous to the Freedom of Information Act (FOIA) here in the U.S. The requirements to produce public records alone justify the use of technology to provide the ability to manage large volumes of data and produce appropriately redacted information to the public. This is true regardless of litigation. Additionally, there are now cases like DuPont or Mr. Dotcom’s, that legitimatize the risk of litigation with the U.S. The fact that implementing an information governance product suite will also enable a company to be prepared for litigation is a beneficial by-product for many entities as they need technology for record keeping and privacy reasons anyway. In essence, the same capabilities are achieved at the end of the day, regardless of the impetus for implementing a solution.

The Royal Commission – The Ultimate eDiscovery Vehicle

One way to think about the Australian Royal Commission (RCs) is to see it as a version of the U.S.’ government investigation. A key difference, however, is that in the case of the U.S. government, an investigation is typically into private companies. Conversely, a Royal Commission is typically an investigation into a government body after a major tragedy and it is initiated by the Head of State. A RC is an ad-hoc, formal, public inquiry into a defined issue with considerable discovery powers. These powers can be greater than those of a judge and are restricted to the scope and terms of reference of the Commission. RCs are called to look into matters of great importance and usually have very large budgets. The RC is charged with researching the issue, consulting experts both within and outside of government and developing findings to recommend changes to the law or other courses of actions. RCs have immense investigatory powers, including summoning witnesses under oath, offering of indemnities, seizing of documents and other evidence (sometimes including those normally protected, such as classified information), holding hearings in camera if necessary and—in a few cases—compelling government officials to aid in the execution of the Commission.

These expansive powers give the RC the opportunity to employ state of the art technology and to skip the slow bureaucratic decision making processes found within the government when it comes to implementing technological change. For this reason, initially, eDiscovery will continue to increase in the government sector at a more rapid pace than in the private in the Asia Pacific region. This is because litigation is less prevalent in the Asia Pacific, and because the RC is a unique investigatory vehicle with the most far-reaching authority for discovering information. Moreover, the timeframes for RCs are tight and their scopes are broad, making them hair on fire situations that move quickly.

While the APAC information management environment does not have the exact same drivers the U.S. market does, it definitely has the same archiving, eDiscovery and technology needs for different reasons. Another key point is that the APAC archiving and eDiscovery market will likely be driven by the government as records, search and production requirements are the main compliance needs in Australia and NZ. APAC organisations would be well served by beginning to modularly implement key elements of an information governance plan, as globalization is driving us all to a more common and automated approach to data management. 

UK Sanctions Order Emphasizes the Importance of Effective eDiscovery Tools

Wednesday, March 21st, 2012

The buzz in the eDiscovery world has focused on predictive coding and the related order issued last month in the Da Silva Moore v. Publicis Groupe case. Yet in that order, the Moore court emphasized that predictive coding would not become the exclusive tool for eDiscovery. The strong inference from the Moore case was that organizations should be prepared to deploy any number of tools in addition to predictive coding technology to effectively and efficiently address discovery obligations. To ignore these other weapons in the litigator’s arsenal would be to put the client’s case at risk.

This point was emphasized last month in a Wasted Costs Order originating from the United Kingdom. In West African Gas Pipeline Company Limited (WAPCo) v. Willbros Global Holdings Inc., the High Court ordered the claimant to pay the defendant a minimum of £135,000 after finding the claimant “failed to provide proper disclosure” under the Civil Procedure Rules. A subsequent hearing was also held to determine the additional costs the claimant must pay to address its shortcomings in discovery (called “disclosure” in the UK).

The principal basis for the High Court’s Civil Procedure Rule 44.3 cost order was the claimant’s failure to properly deduplicate documents. As the court observed, “a significant proportion of duplicates had not been removed,” which was due to “a problem with the de-duplication process.” In rendering its order, the court concluded that: “Whilst I accept that de-duplication of electronic documents has a number of technically complex facets, if appropriate software is properly applied it can remove multiple copies of the same or similar documents.”

As renowned eDiscovery thought leader Chris Dale recently observed in a post regarding this issue, a deduplication failure in 2012 might rightfully be perceived as either old news or even small potatoes. Yet just like Judge Peck’s order in Moore v. Publicis Groupe, the WAPCo case emphasizes the significance of deploying the right tools to meet the challenges of eDiscovery on either side of the Atlantic Ocean. That UK “firms [are] scared witless by the West African Gas Pipeline judgment,” as Mr. Dale observes, gives additional credence to this point.

For law firms looking to better address these issues, there are any number of technologies and vendors that can help provide answers. For most firms, efficient search and analysis tools are probably the best bet for properly reducing the amount of potentially relevant information that must be reviewed prior to production. Others may be ready in the near future for the more advanced features of predictive coding technology.  Either way, having the right combination of eDiscovery technologies to support an intelligent litigation response effort will more likely yield successful results in litigation.

Data Classification and Data Loss Prevention: Indispensable Building Blocks of Information Governance

Thursday, March 15th, 2012

In an effort to envision information governance as a modular and digestible concept, a great place to start is by imagining two building blocks. Not only will this approach make the task of thinking about holistic information governance less daunting, but it will carve out a beginning and an end with two basic concepts, thereby enabling a realistic and modular implementation.

Classification, Intelligent Archiving and Storage

The first block, and one of the single biggest cost savers an organization can embrace, is the proactive classification of data. Data classification begins with policy creation. Organizations that form a committee(s) to define policies and invest the energy into the enforcement of those policies almost always reap significant benefits from the initiative.  The efficiencies are so compelling that it’s a wonder that data classification and archiving are ever considered separately. One major benefit includes the ability to intelligently leverage information since the classification places the data with similar material pursuant to the stated policy. Organizations that embrace archiving for storage footprint reduction, compliance, litigation, and retention will also see the value of preventing trash from entering the archive upfront.

The more useless data that can be disposed of at the initial point of classification, the more intelligently and nimbly the archive can run, thereby reducing costs when it comes time to collect and cull potentially non-relevant data for eDiscovery. At a minimum, policies should be created to prevent trash from entering the archive.  Optimally, policies should contain key identifiers that direct information into specific folders within the archive.

One common concern among record managers is that data classification needs to be perfect – but perfection is  neither the goal nor is it achievable. For most organizations, any improvement in data management would be a big step in the right direction. Proactive data classification and archiving are not meant to be granular records management systems.  Instead they serve as safeguards on what enters the archiving system, and where and for how long that data is subsequently maintained.

Data Loss Prevention, Asset Protection and Security

The other beneficial block of a holistic information governance plan is security-centric and focused on data loss prevention (DLP). With the proactive management of data, it is important to reduce costs as information is created and received.  Similarly, it is critical to monitor sensitive data on an outgoing basis to protect organizations from inadvertent disclosures of sensitive information and intellectual property assets. Much like the policy-driven classification, data loss prevention requires policy creation as well. The policy creation requirements for DLP can luckily leverage much of the hard work done with document retention and classification as they often mirror each other.

If an organization does not know which data is sensitive or constitutes an asset, how can it be protected? In order for organizations to address their valuable information they need to assess, at a minimum, the following four considerations:

  1. What kind of information does the organization consider to be valuable/sensitive?
  2. What happens if that information gets into the wrong hands?
  3. Where does the sensitive information presently reside/where should it reside?
  4. How to track such information if it is transmitted outside of the organization?

The primary events that keep information security officers concerned regarding data loss prevention are: the unauthorized disclosure of sensitive customer information, unauthorized downloads of intellectual property, lost/stolen laptops, the transfer of proprietary information onto flash drives, and finally, concern over outbound emails containing sensitive information. These events most frequently occur at the hands of malicious and/or careless workers. A way to monitor and control activities associated with breach is through data loss prevention policy and technology.

Next Steps

Examine the document retention/classification policies and data loss prevention policies of the organizations and compare them for similarities.  Next, consider getting the key stakeholders for Compliance, IT, Legal, RIM, and Security together to talk about these aforementioned scenarios and to construct a policy. Make the agenda for the meeting short and simple, focusing first on email. Initially focus on how to address the trash being kept so it does not enter the archived environment in the first place. If you do not have an archive, consider getting one.

Finally, tie in data loss prevention as a necessary means of protecting the assets of the organization, as well as providing consistency through classification and data protection. The parameters for defining valuable information will be the same whether looking at classification or data loss prevention. If nothing else, addressing these two critical building blocks will reduce storage and eDiscovery costs, facilitating better coordination of information through intelligent archiving, while simultaneously protecting the organization’s critical assets.  

Policy vs. Privacy: Striking the Right Balance Between Organization Interests and Employee Privacy

Friday, March 9th, 2012

The lines between professional and personal lives are being further blurred every day. With the proliferation of smart phones, the growth of the virtual workplace and the demands of business extending into all hours of the day, employees now routinely mix business with pleasure by commingling such matters on their work and personal devices. This trend is sure to increase, particularly with “bring your own device” policies now finding their way into companies.

This sometimes awkward marriage of personal and professional issues raises the critical question of how organizations can respect the privacy rights of their employees while also protecting their trade secrets and other confidential/proprietary information. The ability to properly navigate these murky waters under the broader umbrella of information governance may be the difference between a successful business and a litigation-riddled enterprise.

Take, for instance, a recent lawsuit that claimed the Food and Drug Administration (FDA) unlawfully spied on the personal email accounts of nine of its employee scientists and doctors. In that litigation, the FDA is alleged to have monitored email messages those employees sent to Congress and the Office of Inspector of General for the Department of Health & Human Services. In the emails at issue, the scientists and doctors scrutinized the effectiveness of certain medical devices the FDA was about to approve for use on patients.

While the FDA’s email policy clearly delineates that employee communications made from government devices may be monitored or recorded, the FDA may have intercepted employees’ user IDs and passwords and accessed messages they sent from their home computers and personal smart phones. Not only would such conduct potentially violate the Electronic Communications Privacy Act (ECPA), it might also conceivably run afoul of the Whistleblower Protection Act.

The FDA spying allegations have also resulted in a congressional inquiry into the email monitoring policies of all federal agencies throughout the executive branch. Congress is now requesting that the Office of Management and Budget (OMB) produce the following information about agency email monitoring policies:

  • Whether a policy distinguishes between work and personal email
  • Whether user IDs and passwords can be obtained for personal email accounts and, if so, whether safeguards are deployed to prevent misappropriation
  • Whether a policy defines what constitutes protected whistleblower communications

The congressional inquiry surrounding agency email practices provides a valuable measuring stick for how private sector organizations are addressing related issues. For example, does an organization have an acceptable use policy that addresses employee privacy rights? Having such a policy in place is particularly critical given that employees use company-issued smart phones to send out work emails, take photographs and post content to personal social networking pages. If such a policy exists now, query whether it is enforced, what the mechanisms exist for doing so and whether or not such enforcement is transparent to the employees.  Compliance is just as important as issuing the policy in the first place.

Another critical inquiry is whether an organization has an audit/oversight process to prevent the type of abuses that allegedly occurred at the FDA. Such a process is essential for organizations on multiple levels. First, as Congress made clear in its letter to the OMB, monitoring communications that employees make from their personal devices violates the ECPA. It could also interfere with internal company whistleblower processes. And to the extent adverse employment action is taken against an employee-turned-whistleblower, the organization could be liable for violations of the False Claims Act or the Dodd-Frank Wall Street Reform and Consumer Protection Act.

A related aspect to these issues concerns whether an organization can obtain work communications sent from employee personal devices. For example, financial services companies must typically retain communications with investors for at least three years. Has the organization addressed this document retention issue while respecting employee privacy rights in their own smart phones and tablet computers?

If an organization does not have such policies or protections in place, it should not panic and rush off to get policies drafted without thinking ahead. Instead, it should address these issues through an intelligent information governance plan. Such a plan will typically address issues surrounding information security, employee privacy, data retention and eDiscovery within the larger context of industry regulations, business demands and employee productivity. That plan will also include budget allocations to support the acquisition and deployment of technology tools to support written policies on these and other issues.  Addressed in this context, organizations will more likely strike the right balance between their interests and their employees’ privacy and thereby avoid a host of unpleasant outcomes.