Migrated from eDJGroupInc.com. Author: Barry Murphy. Published: 2010-05-06 15:07:33  In his post, 10 Reasons Information Governance Makes Sense: Reason #7, Barclay Blair calls out that courts will be looking for organizations to have information governance programs in place or face sanctions or negative case outcomes.  I completely agree, but at the same time, there seems to be a dearth of real sanctions rulings with enough teeth to get organizations off the couch and marching to the information governance beat.    I focus on sanctions because, in my experience, negative case outcomes involve too much extrapolation to force organizations to act.  Too many of the legal folks I hear from fail to make a connection between poor information governance (or poor eDiscovery programs) and negative case outcomes.  Or worse, they point to the fact that litigation costs are often covered by D & O insurance (a gripe I will save for another time).From a sanctions perspective, there were a number of cases in the last decade that most of us thought would be the impetus organizations needed to take eDiscovery and information governance seriously.  Two of the high-profile cases were the Zubulake case and the Morgan Stanley case.  In the Zubulake case, $20.2 million in punitive damages were awarded to employee of UBS Warburg partly because the jury was instructed to believe that non-preserved evidence likely contained incriminating information.  In the Morgan Stanley case, $1.45 billion was awarded to Ronald Perelman after a judge issued a default judgment against Morgan Stanley due to eDiscovery failures.  Again, the assumption was that non-preserved evidence was assumed to be incriminating.Since then, there have been many other cases involving sanctions, but with many of the cases, the actual sanctions don’t grab the attention of large organizations:

Now, I look at those numbers and think of them as significant, but many of the folks I interact with do not.  When the Morgan Stanley case occurred, the market woke up for a minute, but then the damages were overturned and the problem – in the eyes of many – went away.  The fact that the overturning had nothing to do with eDiscovery and that the precedent of assumption of fraud within non-preserved evidence stood kind of got lost in the shuffle.Greg Buckles and I are in the process of doing deeper research on the subject of sanctions.  After all, if organizations are going to spend money on eDiscovery and information governance initiatives, there must be a business case for it.  We talk all the time about avoidance of sanctions, but so far, that doesn’t seem to be as mainstream of a driver as we would have thought.  Are there rulings out there that have caught your attention and made you want to act?  Are sanctions the kind of thing you would never consider to be an impetus for information governance?  Let us know and we’ll be writing more about the topic in the future.

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