Are Custodial Self-Discovery and Preserving ESI in place a good idea?

A majority of organizations still rely of the practice of instructing custodians to search for and protect potentially responsive ESI locally or “preserve it in place”. In its 7th Annual Litigation Trends Survey, Fulbright & Jaworski reported that 55% of responding companies still rely on custodians to identify and preserve their own information as the method used most frequently to preserve potentially relevant information in litigation or an investigation.

Custodial self-discovery and “preservation in place” is a potentially risky in that, especially with larger numbers of custodians, the risk of incomplete collection, inadvertent deletion/spoliation, and meta data corruption is greatly increased, legal supervision of the collection process is impossible leading to inadequate defensibility of the litigation hold and eDiscovery process.

In a 2008 Kahn Consulting survey on employee understanding of eDiscovery responsibilities, only 22% of respondents said they had a good understanding of their responsibilities for retaining ESI for discovery. Only 16% said they had a good understanding of their responsibilities when responding to a litigation hold. These statistics blatantly highlight the risk of custodial self discovery and preservation in place.

The courts are now holding litigants to a higher standard. In a recent case, Roffe v. Eagle Rock Energy GP, et al., C.A. No. 5258-VCL (Del. Ch. Apr. 8, 2010), the Judge was surprised at the custodial self discovery practice one attorney was relying on:

The Judge asks;

Am I correct that you have been relying on what they [the defendants]  self-selected to put in their transaction files, in terms of what you obtained and produced?

The defense attorney answers;

That’s correct, your Honor. I was told that they uniformly would put all of their Eagle Rock e-mails into that folder. I have not checked, and I don’t know whether that is true or whether that is accurate. I believe they are telling the truth, but I don’t know if that is accurate.

The Judge immediately responds to the defense attorney;

Then here is my ruling. This is not satisfactory. From what you have described to me, you are not doing what you should be doing. First of all, you do not rely on a defendant to search their own e-mail system. Okay? There needs to be a lawyer who goes and makes sure the collection is done properly. So both as to the two directors who already have produced — we don’t rely on people who are defendants to decide what documents are responsive, at least not in this Court. And you certainly need to put somebody on a plane to go out and see Mr. Smith.

In this exchange, the Judge clearly states; we don’t rely on people who are defendants to decide what documents are responsive. Custodial self-discovery is like the wolf guarding the chicken coop.

Relying on litigants to find, protect and eventually turn over potentially responsive ESI can be problematic. Most of them will attempt to do what’s right; to the best of their understanding (less than 23% have a good understanding). Those few that could have something to hide may find ways to do a subpar job in the discovery process. If I am the opposing counsel, I am going to want to know if self discovery was relied on.

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