Phoenix--Insurers making plans to avert the legal perils involved with electronic documents and correspondence should include employee training on the destructive power of what they write, an expert advised.
"Educate people that their e-mails can ruin things for them and their company. It's the casual statements with colorful language--these are the things that will get you," cautioned attorney Jon A. Neiditz.
Mr. Neiditz, an attorney with Lord Bissell Brook, made his comments at a Saturday seminar here, at the mid-winter meeting of the National Association of Professional Surplus Lines Offices, Ltd.
His briefing on electronic document management and security and control of e-mail risks outlined a variety of legal hazards companies face and various methods of coping.
Mr. Neiditz began with a quote from a prosecutor in the office of New York Attorney General Eliot Spitzer, to the effect that e-mail discovery has become a more potent weapon for a lawyer than cross examination.
To stress the need for good management of e-mail and electronic records, he noted verdicts this year of $29 million against UBS Warburg in a sex discrimination case based on e-mail evidence and $1.45 billion against Morgan Stanley in a commercial dispute based on computer backup tapes discovered in a closet.
He also cited data showing that in cases where companies notified customers of data leakage, 20 percent of their customers were lost.
Mr. Neiditz counseled that companies need record management programs in place that give them easy search capacity "to be able to confidently respond to subpoenas." While record storage costs have been decreasing, search costs are soaring, he noted.
Firms should make sure their record storage does not include a photo system that cannot be automatically searched or requires manual review, he said.
On the e-mail front, Mr. Neiditz advised that technology is available that can stop mailings with certain words and alert employees if there is a problem with a pop-up message on their screen. Larger insurers, he said, are moving in this direction.
Other programs in use perform "intelligent surveillance" of e-mails. In fact, many companies, to emphasize the importance of e-mail communication, give a detailed notice to their employees of this activity, he said.
To stop data leakages, he noted, a simple step is to make sure employee laptops do not contain data that would require customer notifications in the event of loss or theft.
In planning for electronic data process, companies deal with enterprise content management firms, archiving companies and policy management companies. Mr. Neiditz said organizations should clarify with such firms just what sort of document recovery plans they envision. They also should outline a plan for the company, if it must respond to a request for legal discovery of documents.
"Get a strong document creation policy in place and stop e-mails that will do you in," he warned.
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