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Digital documents raise legitimacy, storage concerns

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by Ian Harvey

In some construction industry contracts, a letter is not deemed to be an official communication if it is sent via email.

Communication

In some construction industry contracts, a letter is not deemed to be an official communication if it is sent via email.

In today’s digital realm, that’s a puzzle for lawyer Lori Roth of Cassells Brock who specializes in construction law.

“Really, it is a communication just like a fax,” says Roth. “But it’s true that many contracts don’t consider it to be.”

When faxes first became popular in the 1980s, notification clauses – which specify what is a communication, in what format it must be and to whom it must be addressed – were amended to include them as an acceptable communiation.

Roth advises clients to include email since they’re more popular than faxes these days, but she warns it’s not the form of communication which really makes a difference should a dispute fester toward litigation. Rather, it’s how the dispute is managed.

“I have a tool on my computer which allows me to file emails to specific case files,” she says. “I then back that up and even have hard copies of it.”

Construction industry clients are advised to take the same prudent steps because should things go south on a project the risk is likely to be a much bigger pain in the revenue column.

A popular tool emerging in the U.S. and to some extent in Canada is that of ediscovery – the demand that a company search all its electronic documents and produce all files relevant to the dispute being litigated. However, it’s expensive, time consuming and can paralyze the operations of a small company.

A better plan, Roth says, is to track and archive all emails and documents by contract, back them up regularly and store them appropriately.

Then, if the need arises, items can be retrieved and presented promptly. “The rules of civil procedure (legal rules governing the process of litigation between parties) have been changed to recognize email,” notes Roth. As a result, in spelling out what constitutes a communication as having been “delivered” — such as a letter or fax — it should also include emails.

Almost every enterprise is wrestling with an ever-increasing mountain of compliance regulation and corporate governance clauses which place greater onus on documenting who ordered whom to do what and when in the event the outcome comes under government or court scrutiny.

Reacting to a string of accounting scandals and corporate malfeasance, recent legislation on both sides of the Canada-U.S. border has set higher accountability. standards.

The U.S. Sarbanes-Oxley Act and Bill C-198 in Canada have made it imperative for companies to document their processes, decisions and statements and be prepared to locate them on demand in the event of lawsuits. Archiving tons of documents isn’t as simple as piling them into boxes.

Even in this digital age there are problems. Electronic media is notoriously unstable. CDs can scratch and oxidize, hard drives fail and technologies become obsolete.

The need for accessible, stable storage media is being met, somewhat ironically, by a modern twist on microfilm, a 1928 technology updated by a digital interface. Electronic documents are saved as an image file, then written to 16 mm microfilm via a scanner-type interface. The film is processed chemically and stored, after being audited and indexed for content.

It’s a responsibility companies large and small have to take seriously, said John Mancini, CEO of the Association for Information and Image Management (AIIM), an industry organization. A survey last year of 800 companies found despite new ediscovery rules which kicked in Dec. 2006, the message isn’t getting across.

“Many records management programs just cover the tip of the iceberg,” said Mancini. “As the survey pushed participants for more granularities with regards to their records and information management program, it became apparent that many end users have yet to address important elements in a truly comprehensive program.”

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