Examples of E-Discovery to investigate ...
Fraud
Recent studies show that one out of four companies in Europe is a victim of fraud. In 50% of all cases fraud was committed by someone from within the organisation. Finding evidence of the facts is crucial to assess the total damages and to establish how, when and by who the fraud was committed. However, preventing fraud when it is committed by a company employee is difficult and in such cases evidence may be hard to find when it is part of regular business transactions. While physical documents may have been altered or removed, company IT systems contain large volumes of electronic information and due to their complexity it is difficult to remove all traces of fraudultent behaviour. E-Discovery techniques can be used to discover relevant information in electronic business records, either financial records, email or otherwise.
Antitrust and Competition
The Netherlands, Europe and also the United States have regulators or departments that enforce antitrust laws in order to prevent unfair competition and price fixing. Companies that violate these regulations are at risk of paying high fines and are encouraged by regulators to disclose violations on a voluntary basis to avoid being fined. In that case a company is expected to produce evidence that will enable the regulator to prosecute other cartel members. This evidence is collected and produced using E-Discovery techniques under careful review of external legal counsel. Subsequently, regulators perform socalled dawn raids at other alleged cartel members to collect incriminating evidence. Again, legal counsel is involved and E-Discovery projects are carried out to ensure that no (legal) privileged information is disclosed to the regulators.
Pre-trial Discovery
When companies with customers or suppliers in the UK or the US get involved in litigation, parties have the right to request all relevant information. This process is better known as pre-trial discovery in the US or disclosure in the UK. The purpose of pre-trial discovery is to reveal all evidence in advance of the trial and make it accessible to all parties. In december 2006 the Federal Rules of Civil Procedure (FTCP) in the United States have been amended to include electronic stored information as part of pre-trial discovery. Under these new rules companies must produce any electronic information that is business related in a timely manner unless it has been destroyed as part of a documented records managment procedure. Consequently E-Discovery has become a crucial part of pre-trial work because failure to preserve or produce evidence can easily lead to sanctions or worse, e.g. it may convince the court to rule in favour of the opposing party.
Bankruptcy
The administrator or curator of a bankrupt company is appointed by the court to ensure that company assets are shared out fairly among the creditors. The administrator is leading a company in crisis and typically key personnel already has left the company and remaining employees are about to get fired. The financial systems, electronic archives and email servers are the remaining sources of information to determine company assets and their value. E-Discovery will help find evidence required to reject false claims or to investigate fraud, breach of contract, bad management etc. Additionaly, E-Discovery techniques can be used to preserve this information in a simplified but forensically sound format that remains accessible to the administrator so that expensive IT assets may be liquidated and service level agreements do not need to be renewed.
Corruption
Corruption is one of the top three economic crimes world wide. Public companies in the US must be compliant with the foreign corrupt practices act (FCPA) and recently companies with activities in the UK are subject to the new anti-bribery law. International pressure is increasing on other countries to make companies liable for bribery and also on countries that already have such regulations to enforce their anti-bribery laws. When regulators receive information that a company is involed in bribery, it is requested to disclose evidence through an investigation of independent legal counsel. These legal proceedings rely heavily on interviews that are prepared using E-Discovery to identify suspicious transactions in the financial system and to identify facts such as who was involved, where and when by reviewing company emails.