They've been looming on the horizon for months, if not years, but on Dec. 1, 2006, it finally happened: new electronic discovery rules (called Federal Rules of Civil Procedure, or FRCP). The amendments to FRCP 16, 26, 33, 34, 45 and revisions to Form 35 are aimed at one particular area of discovery--electronically

Let's start with what we know for sure.

The new rules establish a safe harbor that protects parties that inadvertently lose information through the routine, good faith operation of an electronic information system. They also provide potential relief from producing electronic information that is not "reasonably accessible."

The new rules apply to all cases filed after Dec. 1, 2006, and to all pending cases deemed "just and practicable," said Matthew Rechner, attorney and chair of the Electronic Discovery Practice Group and Response Team at law firm McDonald Hopkins.

But if this is all news to you, don't feel bad--or at least don't feel alone. A December 2006 AIIM (The Enterprise Content Management Association) survey of 820 end users on electronic records management produced some sobering facts about how far industry has to go to get this right:

* Only 57% of users said they have a formal policy related to classifying information as records

* Just 36% have a formal policy related to litigation readiness

* Barely half (53%) have a policy in place for insuring that all information potentially relevant to a litigation is preserved

* Fewer than half (47%) have "no spending planned" related to managing information in the context of discovery and litigation support

* Only 48% have a statement in their employee manual related to employee responsibilities associated with records and information management

* Only 41% of the organizations surveyed have delivered training for employees on information management issues

What is not so clear is just how big an impact these new rules will have. Most experts believe that if your company already has clear, consistent, broad and defensible policies and procedures in place regarding electronic data information storage, you're probably okay. But if you don't, you may not be.

Another very general rule of thumb is that the bigger your company, the bigger a potential worry these new rules present, experts said. However, if you are in a highly litigious area--for example, if you are a medical device manufacturer--you need to be extra sensitive to these new rules regardless of your company's size.

Harsh Reality Sets in

"Many non-public companies dismissed the records and information management requirements association with Sarbanes-Oxley as not relevant to their companies. That won't be the case with the new requirements; the new rules make clear that an effective and responsible electronic information management infrastructure is a requirement, not an option," AIIM noted in an Industry Watch report, "New e-Discovery Rules: The Good, The Bad, and The Ugly."

Jane Politz Brandt, an attorney at Thompson 8, Knight, put it best: "New federal rules on how electronically stored information is used in litigation could serve as an unanticipated wake-up call for many companies. These rules place tighter timeframes on the production of electronic information, but they also provide a rationale to look more closely at how corporate data is archived."

Brandt advised businesses and IT departments to strongly consider policies limiting mandatory storage to essential information used to protect business and restore systems in the event of a disaster. "They may be backing up operationally unnecessary data that would be difficult and costly to retrieve yet might still be discoverable information," she said.

A Look at the Changes

Discovery is the pre-trial exchange of information by parties in a case. During the past two decades, personal computers have become commonplace, generating and containing enormous amounts of information. The average personal computer hard drive today can easily store 60 gigabytes of data--or 60 stacks of paper 85 feet tall--and large organizations' computer networks commonly store information in terabytes, each equivalent to 500 million typewritten pages. All this information can be subject to discovery.

Developing case law on discovery of electronically stored information has helped provide guidance, but it is inconsistent and incomplete, noted a report on the new rules, revisions and amendments by the Administrative Office of the US Courts Office of Public Affairs. Disparate local rules have filled the gap between the existing discovery rules and practice, treating litigants differently depending on the jurisdiction. National rules are necessary to provide uniformity and prevent a patchwork of local rules and requirements that would otherwise grow, the report said.

The proposed amendments to the federal rules address these issues and more. In its report to the Judicial Conference, the Advisory Committee on Civil Rules said that the proposed amendments address five related areas: (1) requiring parties to give early attention to issues relating to electronic discovery, including the form of production, preservation of information and problems reviewing electronic information for privilege; (2) relieving parties from searching for inaccessible electronic information (such as information on backup tapes); (3) retaining privilege protection for documents inadvertently disclosed; (4) requiring parties to agree on the form of production of electronic information or present the issue promptly to a judge for determination; and (5) limiting sanctions for loss of electronic information as a result of routine operation of computer systems (for example, automatic purging of e-mails).

In the end, it is up to each company to determine how much has changed in the wake of these new rules. However, it is clear that the changes demand a new assessment of your own policies and capabilities.

Tamar June is the vice president of strategic marketing for AssurX, Inc. She has been in the information technology and manufacturing industry for more than 15 years and has published numerous regulatory (21 CFR Part 11) and technology articles appearing in a variety of publications. She holds a B.S. degree in marketing from St. Joseph's University and attended the Katz Graduate School of Business at the University of Pittsburgh.

Free Online Resources

To look at the official roles (pending as of December 2006 but expected to be approved), visit:

http://www.uscourts.gov/rules/Rep orts/ST09-2006.pdf.

TO view the AIIM's full report and survey, visit:.

www.aiim.org (note: registration is required).

For an excellent legal analysis of the new rules, visit:

http://www.law.com/jsp/legaltechnology/ electronic discoveryRoadmap.jsp.