E-Discovery: Best Practices for Construction Companies

Construction projects often breed disputes and litigation. In the modern era, such disputes often turn on the ability to manage the challenges of electronic discovery (e-discovery) efficiently and effectively.  This article offers a few tips, for construction business executives and their counsel, to help meet those challenges.

1. Get Educated 

E-discovery, in many respects, resembles a construction project. It involves technical skills, but it also requires preparation and solid management practices. E-discovery should not be wholly outsourced (to lawyers or technical experts); company executives and in-house counsel should be familiar with the process, and ensure that they are aware of the systems the company needs to have in place. Further, e-discovery technology is developing rapidly, and new rules of procedure (at the federal and state level, but also in arbitration) will shape the obligations of parties in the event of a dispute. 

One good place to start to gather information about e-discovery processes is the Sedona Conference website, which provides practical guides and useful white papers (all free of charge).

2. Form a Team

E-discovery is a team sport. Neither in-house counsel nor an outside law firm can, alone, develop and implement an effective plan for e-discovery. Nor can company executives simply pull a plan off the internet, and hope that it will work in their environment. 

Input from affected constituents: senior management, counsel, IT staff and project managers is vital. As a start, the team should focus on the most common forms of disputes the company faces, the most common forms of discovery demands that arise in such disputes and the most common challenges that arise in dealing with such demands. The team should meet periodically (even after forming a plan), to address new challenges and to consider improvements that may help ease the company’s burdens.

3. Recognize the Context for E-discovery

E-discovery is not a one-time thing. It is a process. Take a look at the Electronic Discovery Reference Model. E-discovery includes: identification of information that may be involved in a dispute; preservation of information once a dispute has arisen; collection, processing and review of information; production of that information; and (eventually) use of such information in whatever trial or hearing process is chosen for resolution of the dispute. 

The company’s plan for e-discovery should address all phases of the process, and (as the model indicates) be based on, and congruent with, the company’s normal information governance practices. A plan that cannot be implemented effectively is worse than no plan at all (because it sets a standard, as to what the company should do, but then clearly indicates that the company did not do what it said it would do).

4. Consider Technology Solutions 

There is no magic e-discovery technology solution (the fabled “e-discovery in a box” application). But there are tremendously effective technologies that can improve efficiency. These include processes for the elimination of duplicate materials and for identifying the “final” versions of messages (think email chains that are sent and re-sent dozens of times)—use of such technologies can reduce the human eyeball review time in an e-discovery project. 

So, too, there are search technologies (clustering, data analytics, continuous learning systems and more) that can improve efficient identification of relevant information (and elimination of spam and other obviously irrelevant materials). Moreover, new technologies can bring order out of the chaos of unstructured data (emails, text messages and more). Try before you buy. Most technology vendors will provide you with on-site demonstrations. 

Make sure that the technologies are cost-efficient in your environment and in the kinds of disputes you normally face. Consider asking prospective vendors to work on a data set from your company, to show how well the particular technologies work with your systems and data. Consider the company’s other needs (information management, data security) that may be affected by any technology solutions. Often, the most opportune time to adopt new e-discovery technologies is when the company is also upgrading its information management systems for other purposes. 

5. Organize & Train 

The onset of a dispute is not the time to begin to organize the company’s management and staff to implement its e-discovery plan. The company should have a point person to manage the process. It should have a protocol of steps to take in response to a dispute. And it should make sure that its employees are aware of the protocol and prepared to support the company’s efforts.

One simple example illustrates this need. Suppose the company receives a demand letter from an adverse party (perhaps a subcontractor or a supplier), stating the belief that the company has somehow breached a contractual obligation. Will the company properly identify this as a circumstance calling for preservation of information that relates to (potential) litigation? Does it have a form of notice to provide to employees regarding their preservation obligations? 

Who sends the notice, and to whom? Will employees know what to do in response? Does the company have at least a basic data map of the locations and systems where relevant information might be located? Will the company have a means to turn off any “auto-delete” functions that could adversely affect its ability to preserve information? 

These are the kinds of questions that should not be answered “on the fly” (where mistakes are more likely and where the locus of responsibility for implementing the company’s plan may be unclear). 

Just as with any other aspects of the company’s compliance efforts (anti-harassment policies, ethical practices and more) one key to an effective e-discovery program is training and awareness. The process, moreover, is not a “set it and forget it” event. New employees must be trained and new technologies, new policies and new legal regulations must be addressed. The work of the e-discovery team is never done. Periodic review of what has gone well in managing disputes, and what can be improved, helps ensure that the company successfully implements best practices in an ever-evolving environment.

6. Review Dispute Resolution Options

The scope and volume of e-discovery depends greatly on the venue in which a construction dispute proceeds to resolution. Most federal and state courts in the United States take a relatively broad approach. Arbitration proceedings in the U.S. tend to be more narrowly focused. Arbitration outside the U.S., and most litigation outside the U.S., is even narrower. 

Construction companies do not always have choices regarding contract terms with their business partners. For example, project owners and financing sources often proffer take-it-or-leave-it standard terms for their transactions. But, where a company has the ability to negotiate for terms that best meet the company’s needs, the inclusion of provisions that focus on ediscovery issues may be quite useful. The simple choice of arbitration (versus conventional litigation) generally promotes relatively less e-discovery burden in dispute resolution. The choice of specific rules can streamline the process. 

Even where the specific rules are not within the company’s control, at the time of contracting, it is well for the company to establish (in advance) its “wish list” for the conduct of ediscovery, in the event of a dispute. Such a list should tie to the company’s e-discovery plan (formulated and updated by the team), and to the realities of the company’s information practices. As an example: there are often a number of data types that are difficult to search (such as photographs and voicemail), or difficult to retrieve (such as back-up tapes) or difficult to preserve (such as ephemeral messaging). 

The company’s wish list might expressly exclude particular data types as sources for e-discovery. The company might also prefer a particular kind of search methodology, or production format, that best comports with its technological capabilities. These kinds of wish-list items can make discussions with opposing counsel, at the outset of a dispute process, much more efficient and productive. 

In essence, if the company’s team knows what the company wants and needs, they are better positioned to negotiate with an adversary (and to present a reasonable and well-justified explanation for the request, if the request must be put to a judge or arbitrator). 

Construction projects can produce vast amounts of electronic information: contracts, plans, drawings, specifications, estimating data, schedules, meeting minutes, site logs, progress reports, cost documentation and more. Managing this vast store of information, in the context of a dispute, can present overwhelming challenges.  As with everything in construction, the solution is careful planning, development of appropriate management systems and the effective application of human and technological resources.