E-discovery is a process in which parties to a civil lawsuit have to exchange electronically stored information as part of the normal discovery process. For a small business, this may not seem like too much of a burden. However, with the growth of electronic communications as well as digital storage of records and other business documents, corporations are starting to see that the discovery process is not always very straightforward should they become a party in a civil lawsuit.
The Third Circuit Court of Appeals has pointed out that during the 2011 year, 1.8 zettabytes of digital information were created. According to estimates, a large chunk of that data has been created by corporations during the normal course of their business operations. There are now specialists in e-discovery which help companies locate, retrieve, secure and format information that is digitally stored so that it can be presented in a court case. For a large company that processes huge quantities of data each day, this can however mean significant costs.
Many companies have wondered whether they would recover some or all of these costs should they win a civil lawsuit. This is a question that until now did not really get a clear answer. However, the Third Circuit has now given a ruling which found that only some costs related to e-discovery could be recovered. Essentially, the court stated that not all steps of the electronic discovery process could be recovered from the losing party, even if the party that won had to incur significant costs in order to prepare and review documents that were related to the court case.
Some examples of e-discovery related services which would be admissible include, scanning of paper documents, conversion of video on tapes to DVD format, as well as converting numerous types of business documents into TIFF format. The decision comes after a lawsuit that was filed by Race Tires America against its competitor, the Hoosier Racing Tire Corporation, plus Dirt Motor Sport which was responsible for sanctioning motor sports. In this case, the defendants won, however they still had to bear a significant amount of the cost for services that they've secured from an electronic discovery vendor.
Even though defendants aren't too likely to rejoice at the decision, it should be known that there is significant progress being made in the electronic discovery industry, with a focus on cutting the costs of the discovery process should a company be involved in a civil lawsuit.