During business litigation, companies must provide relevant documents and information in their possession or control requested by the opposing party. Understanding the discovery process and what it can cover can help businesses meet their legal obligations under discovery rules.
Understanding Discovery
Discovery refers to the stage of litigation in which the parties exchange documents or information and depose witnesses. Discovery seeks to ensure that parties put the facts and evidence on the table for two reasons. First, discovery can help ensure a fair trial by preventing parties from attempting to “surprise” one another with evidence or witnesses. Second, discovery can help the parties narrow down the issues in dispute for trial. Discovery tools include:
- Interrogatories
- Requests for admissions
- Depositions
- Requests for the production of documents
Common Types of Documents Provided in Discovery
Business litigation can require companies to produce various documents for opposing parties in discovery. Examples of documents that businesses may provide in discovery include:
- Contracts – Many types of business litigation arise from contracts, such as master service agreements, vendor contracts, commercial leases, licensing agreements, and non-disclosure agreements. Parties may have to disclose copies of their contractual agreements to determine the scope of their duties or rights.
- Internal Communications – Discovery in business litigation frequently involves requests for a company’s internal communications, including emails, written memoranda, texts, internal message board posts, or internal chat app messages. However, companies may vigorously dispute the discoverability of such documents, challenging their relevance, asserting an undue burden from production, or claiming confidentiality or privilege in such communications.
- Financial Records – Business litigation may involve issues about a company’s finances or financial matters like wage-and-hour claims, requiring them to disclose financial records/projections, tax returns, payroll records, ledgers, and receipts.
- HR Records – Employment law claims like discrimination claims or labor disputes may require companies to produce HR records, such as employee files, performance reviews, or disciplinary documentation.
- Business Policies – Lawsuits may involve claims that require parties to review a company’s written policies and procedures, such as employee handbooks, training manuals, compliance procedures, or safety protocols.
- Advertising/Marketing Materials – In consumer protection, false advertising, or product liability lawsuits, parties may request a company’s advertising or marketing materials, including social media posts, marketing plans, websites, brochures, flyers, or billboards.
E-Discovery Considerations
Today, many businesses keep most of their records in electronic format. For example, most communications occur through email, and companies also maintain electronic employee and financial records. As a result, most discovery in business litigation takes the form of electronic discovery (e-discovery). Over the past decade-plus, courts have developed rules and procedures to govern e-discovery, including determining a reasonable scope for discovery requests given the potentially voluminous amount of electronic records that discovery in business litigation can involve.
Furthermore, businesses must prepare for e-discovery in litigation. Companies should adopt data retention policies that include appropriate litigation hold procedures to prevent the inadvertent loss or deletion of potentially relevant data. Otherwise, companies could face various sanctions from the court, such as monetary penalties, increased costs incurred to reconstruct lost data, adverse inference jury instructions, or dismissal of claims.
Tips for Responding to Discovery Requests
Best practices for businesses engaged in the discovery process during litigation include:
- Initiate prompt litigation holds as soon as a potential legal dispute arises
- Adopt and enforce records retention policies that ensure employees do not unintentionally delete or destroy documents
- Work with litigation attorneys with extensive experience in e-discovery
- Utilize document management/e-discovery software to help streamline the collection and production of discovery
Contact a Business Litigation Attorney Today
When your business becomes embroiled in litigation, the discovery process may require you to produce substantial documentation relevant to the claims in the lawsuit. An experienced business litigation attorney can guide you through the challenges of discovery. Contact Lancaster Tech Law today for an initial consultation to learn what kinds of documents and information your company may need to provide during a lawsuit.