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No matter their size or industry, at some stage most companies will find themselves involved in a commercial dispute. And assuming the issue is not resolved at an early stage, that will result in claims being made through the courts.

Having produced a ‘statement of case’, which set out the facts as they see them, and a legal analysis of their respective positions as the process continues towards trial, the parties will be required to disclose to each other all documents that bear any relevance to the issues in dispute.

It is not open to the parties to ‘pick and choose’ which documents they disclose. They have to include both the documents which assist their case – and those documents which might be to their detriment. In the past, as part of this legal process of ‘disclosure’, each side has produced a list of documents which can then either be inspected as original documents, or which they are obliged to provide copies of, on request.

But having selected and submitted the documents that the business thinks are relevant to the case, can it then rest easy? No longer. With most organisations conducting the vast majority of their business electronically, all too often paper documents are never created, and that has meant a widening of the definition of what constitutes a document.

A document is not just an item in print. Indeed, anything that is capable of containing information – including audio recordings and recordings in other electronic media – can be a ‘document’. Moreover, the many millions of electronic documents created each day may be held multiple times and at several locations on PC hard drives, on server storage devices, on back-up tapes and disks, as well as in printed form.

Clear copy

Towards the end of 2005, the Court confirmed what legal practitioners have known for some time: that it is necessary, as part of the disclosure process, to inform the other party that copies of electronic documents exist, including documents on different servers or copies held on old hard drives, for example. Clearly, deleting a document from the computer on which it was created rarely means the end of its existence – copies held elsewhere can come back to haunt claimants or defendants who have created documents that in hindsight they wish they had not! A flippant email that was sent from colleague to colleague a few weeks ago and has since been forgotten may be the biggest mistake an employee could have made.

There is potentially a huge danger to businesses in such email exchanges. It is not unknown for business people to send internal emails in relation to threatened claims making comments such as, “Have you seen this written claim from X? I am really worried about it.” While the remark may appear innocuous, the immediate question raised by the party that receives a copy of this document under disclosure is likely to be, ‘why was there a cause for concern?’ It could even be claimed that a statement of this kind could amount to an admission of liability.

Even more seriously, an internal email, stating something like, “we are going to have to put our hands up on this claim” could well be disclosable in legal proceedings, and the harm that such a comment could cause, such as the prejudice that it would create in the mind of a judge, could be immense.

As that underscores, businesses need to give careful consideration to their policies on email content, especially when that relates to matters that could, eventually, give rise to formal claims.

In certain circumstances, documents can be ‘protected’ from being produced in legal proceedings on the grounds that they are legally privileged. But these circumstances are very precise, and businesses need to take advice on what they can do to prevent unwanted admissions and other information being recorded in documents electronically and which they will subsequently have to disclose to the other side.

E-disclosure is a minefield, and companies need to establish – and enforce – clear e-document policies if they are to protect themselves from this new dimension of legal liability.