Strategies to Reduce Litigation Angst

By Camille Urban | June 26, 2013

One cannot help noticing the number of lawsuits swirling in the renewable energy industry. They are big, expensive, and equally as important, they consume time and resources with the voracity of a tornado. Is there a strategy to eliminate drawing the attention of a plaintiff looking for a vehicle to make its position known in the industry? Not to my knowledge. Instead, the best thing a renewable fuel producer can do is position itself to minimize the disruption of its business when a lawsuit occurs.

When a company is named as a defendant in a lawsuit, the first thing it will be asked to do is provide information. United States law allows both parties in a lawsuit to request documents and information for use in support of their respective positions.  Responses are required within a certain time limit and may be in the form of documents. Example requests include documents such as “the company’s marketing materials since 2003” or “copies of all of the board meeting minutes and notes since 2004” or “any and all documents related to production.” Sound like a headache? It is.  

Being named in a lawsuit creates angst.  Receiving document requests results in near panic for a company not prepared. At the very least, the requests start a mad scramble just to determine what documents exist. It requires days of sorting through offices and computer hard drives. Each document must be examined by your counsel to determine if it must be produced and whether there is any information present that can be withheld. Some duplicates can be culled; some cannot because handwritten notes appear thereon.  Determining what documents previously existed but have since been destroyed is also required. 

A company will also be asked to identify individuals who were employed or contracted during the timeframe in question and may have knowledge regarding certain facts. Soon thereafter, each such individual will be interviewed to determine his knowledge, what documents he possesses, and why documents expected to be in his possession are missing. 

The entire process is tedious, time consuming, and expensive. Without clear document retention and destruction policies, the more inefficient a company will be in locating and producing these documents. And the more its lawyers will need to bill in order to comply with the discovery requests or to argue about why compliance is impossible.

What to do? Right now, before becoming part of a lawsuit:

1. Draft and store detailed descriptions of your current document retention and destruction policies. 

2. Distribute document policies and routinely educate all employees so that they understand what to archive and how. 

3. Determine which employees are the pack rats and offer them assistance.

4. Determine past document policies and create detailed descriptions of each including the time frame of effectiveness.

5. Limit the number of copies retained by designating a record keeper for each area such as purchasing, storage, production, maintenance, sales, lab, board, office. 

6. Require all those not designated as recordkeepers to cull documents not on the “retain” list.

7. Meet with your IT professionals. Take an active role in creating and documenting archive policies for emails and e-documents. 

8. Archive e-documents such that each may be searched using criteria, e.g., date created, date last accessed, author(s), to and from, document type and key words, so that exact copies may be de-duplicated.  

9. Create an employee handbook. Include policies regarding confidentiality and document destruction. Keep track of past employees with key roles. 

10. Perform exit interviews with every employee. Obtain a signed confirmation of each exit interview and employee’s ongoing obligations of confidentiality.

These strategies will allow a company to manage angst and panic related to launch of a lawsuit. Even better, they provide avenues for reducing expenses. So what are you waiting for? Get ready, get set, go!

Author: Camille Urban
Attorney, BrownWinick Law Firm