Nick Patience, explains the issues surrounding the disposal of information and the consequences businesses will face if they do not have a comprehensive information governance policy in place

Businesses today are dealing with a seemingly unstoppable increase in the volume of data they are creating, receiving and storing, and this presents significant challenges when it comes to effectively managing, analysing and understanding the information and insights contained within. In order to maintain a competitive advantage, companies must extract the key information from their structured or unstructured data, whilst making sure that any unneeded data is disposed of efficiently.

If large amounts of data are left unmanaged, businesses can be faced with burgeoning storage costs, increased legal costs and, in some cases, it can even cause system malfunctions. In addition to this, storing vast amounts of information across disparate locations makes it more difficult to identify and utilize business critical information. It is vital for companies to understand that all of their data cannot be kept forever and appreciate the importance of only retaining the information that is relevant to the business. However, businesses must be aware of, and comply with regulations and legal standards when disposing of unwanted data. Those that fail to do so could find themselves facing potentially expensive legal proceedings and fines. It is therefore critical to implement defensible disposal, through information governance policies and processes that ensure organisations do not leave themselves open to legal action.

Courts today don’t take any lenience on companies that claim to have “innocently” destroyed data, and a finding of ‘spoliation’ can certainly lead to losing a winnable case and very serious penalties. The spoliation of data doesn’t necessarily have to be intentional. Technological advances in the 21st Century make it a lot easier to create, delete and alter any kind of electronic data. Data can now easily be destroyed, altered or damaged by the click of a mouse, a stroke of a key or completely automated computer processes. This kind of misfortune resulting from human error is difficult to prevent. However, we often see companies instructing employees to delete information without regulation, enforcement and auditing, which is completely illogical and can be more damaging than not deleting the information all.

There have been numerous cases where companies have been reprimanded for holding organised deletion days, or “shred days”, which have led to the spoliation of data needed for future litigation. A good example of this occurred when an Arthur Andersen partner sent an email message to employees working on the Enron account, reminding them to “comply with the firm’s documentation and retention policy”. The Andersen partner didn’t order the destruction or shredding of evidence, but because anticipation of future litigation was potentially obvious, the implication in her email was to “get rid of your suspect data”. The timing of the email message also created suspicion, in that just 21 minutes separated her e-mail from an entry in a record of her current projects in which she wrote that she was working on a case involving potential violations of federal security laws.

This case highlights the need for companies to adopt a watertight information governance process that includes a thorough defensible disposal strategy. A structured system would have been capturing, indexing, applying retention processes, protecting content on litigation hold and efficiently disposing of the irrelevant content on a regularly scheduled basis, avoiding any potential legal fallout.

Big data presents a huge opportunity for those willing to think and act quickly. Setting up a defensible disposal system is clearly an integral part of this. The build-up of data is going to continue growing at an incredible rate, with data production estimated to be 44 times greater in 2020 than it was in 2009. If companies don’t act now, we will see desperate measures of deletion, like that displayed by the Arthur Anderson partner, that will inevitably lead to potential law suits and cause the potential loss of million.