A document retention policy (DRP) provides guidelines for the review, retention and destruction of documents, and it serves many purposes. First, it increases the efficiency of your business by freeing up electronic and physical space, and decreasing the time you spend locating documents. Second, a DRP ensures that your business is in compliance with federal and state record-keeping requirements relating to health and safety, the environment, employment or any other regulations. Finally, a DRP can protect your business from difficulties in enforcing or defending claims, should litigation result.
 
 Your DRP should cover any and all types of documents, electronic files and other tangible items that you use or receive on a regular basis, and should be specific to your business. Certain documents, such as annual financial statements and tax returns, should be retained forever. Others should be reviewed and destroyed on a systematic basis. Determining how long to keep certain categories of documents must be done by addressing a number of factors. Do any federal or state laws require you to keep these documents for a certain period of time? Are these documents relevant to enforcing or defending any claims? If so, what is the statute of limitations for those claims? Do the documents support or explain how a decision was made? Once these factors are considered, a proper timeframe for keeping certain documents can be established.
 
 Enforcement of the DRP is perhaps most important because failure to enforce a DRP is the equivalent of not having one at all. The best way to enforce a DRP is to have a DRP manager. A DRP manager enforces the DRP by instructing all employees on the policy and taking whatever steps necessary to ensure that the DRP is being followed.
 
 If you have knowledge of existing or potential litigation, the DRP should be suspended immediately for all documents that may be relevant to the subject of the litigation. Your obligation to suspend the DRP and preserve litigation-related documents begins even before the lawsuit is filed. For instance, if you receive a letter complaining about products or services you have provided, you should preserve those documents at least until the statute of limitations for possible claims has expired.
 
 When you have knowledge of litigation, you should immediately segregate the relevant files, documents or other items and consider them closed. You should instruct third parties who are under your control, such as subsidiaries, to do the same. You should not, however, add documents, or destroy or change any of the existing documents or items in your files. Documents, such as letters from your attorney, that are created subsequent to your knowledge of the litigation should not be added to the file, as they are not part of your regular business records and may be privileged. 

 
 Failure to retain relevant documents once you have knowledge of existing or potential litigation may result in you being accused of spoliation. If you are found to have engaged in spoliation, the court can enter sanctions that may include instructing the jury to assume that the documents you no longer have were detrimental to your case, or prohibiting you from defending or pursuing claims. 
 While developing a DRP may seem like a tremendous undertaking, the benefits of having and enforcing such a policy are immeasurable. It may keep you from being in the middle of a scandal, or in the disastrous position of not being able to prove or defend a claim. 
 
 Brommel practices primarily in commercial litigation at BrownWinick, a Des Moines, Iowa-based law firm serving the renewable fuels industry. She can be reached at <a href=mailto:"brommel@brownwinick.com">brommel@brownwinick.com</a> or (515) 242-2452.

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The Importance of Document Retention Policies

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Upcoming Events

2024 International Fuel Ethanol Workshop & Expo

Biodiesel Summit: Sustainable Aviation Fuel & Renewable Diesel

Carbon Capture & Storage Summit

North American SAF Conference & Expo

2025 International Biomass Conference & Expo

Legal Perspectives