Post Process

Everything to do with E-discovery & ESI

Articles for a Monday Morning

Posted by rjbiii on November 23, 2009

Just in case you don’t have enough to do, here are some articles of interest:

In-house lawyers: poor data procedures hampering response to litigation and regulatory inquiriesA rise in litigation and regulatory investigations is causing headaches for in-house legal departments, according to research published today by KPMG, the accounting firm.
A survey of over 200 senior lawyers worldwide found that many legal departments are having difficulty responding to disclosure requests because of problems retrieving information from within their organisations. Poor or non-existent procedures for collecting and processing data is causing delays, adding significant extra costs and could even lead to loss of data.

SEC’s expansion of Sarbanes-Oxley Act could mean big costs for smaller companies
This was a newsy little tidbit affecting thousands of small public companies, but it was mostly relegated to the back pages of newspapers, if it was covered at all.

The Securities and Exchange Commission announced recently that small public companies will no longer get a reprieve from complying with the Sarbanes-Oxley Act of 2002.

Next year, they will have to hire auditors to attest to the adequacy of their companies’ internal control systems, and that means heavy additional expense. Internal control basically refers to the way a company tracks inventory, accounts payable and cash.

CFOs High-five on 404 Rollback Bill
The news last week that the requirements of Section 404(b) of the Sarbanes-Oxley Act might never, ever come to bear for small companies had Jeff Klausner, CFO of Infosonics, a wireless-equipment provider with a market cap of around $14 million, “doing backflips,” he says. “This wouldn’t change anything that we do; it would just save us a bunch of money on audit fees.”

The proposed Sarbanes-Oxley amendment, co-authored by Rep. Scott Garrett (R-N.J.) and Rep. John Adler (D-N.J.), has so far been passed only by the House of Representatives Financial Services Committee. Already, though, it has ignited plenty of interest. The proposal would permanently exempt companies with market caps of $75 million or below from 404(b) — following several compliance deadline extensions that the Securities and Exchange Commission has already granted them.

A Call to Dialogue: EU Article 29 Data Protection Working Party Document 158 on Discovery for Cross-Border Civil Litigation
On February 11, 2009, the Article 29 Data Protection Working Party (Working Party) of the European Union issued a “Working Document” on the issue of pre-trial discovery for cross-border civil litigation (WP 158). The purpose of WP 158 is to provide guidance to persons who are involved in the processing and transfer of personal data in the context of cross-border civil litigation and regulatory investigations. This document is the first official EU recognition of the tensions between data privacy concerns of EU Member States and the legitimate need to conduct discovery for cross-border litigation.

WP 158 is “an invitation to public consultation with interested parties, courts in other jurisdictions and others to enter a dialogue with the Working Party,” rather than a fully developed set of principles and guidelines.*

WP 158 limits its discussion to (1) Preemptive document preservation in anticipation of proceedings before U.S. courts or in response to requests for litigation hold, known as “freezing;” and (2) Pre-trial discovery requests in U.S. civil litigation. It does not address the issues of (3) Document production in U.S. criminal and regulatory investigations; and (4) Criminal offences in the U.S. relating to data destruction (WP 158, p. 3).

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