Construction Law - November 2005

The Risks of Digital Correspondence

While e-mail and electronic storage of information have boosted productivity, the digitizing of information also creates significant risks.

Digital technology has transformed how construction and development industry professionals communicate with each other and clients. As a result, legal counsel has had to evolve concerning how long clients should hold on to e-mail documents, correspondence, and files in the event of litigation, as well as what kinds of things clients should say in their correspondence.

Not so long ago, lawyers used to advise their clients about keeping a "paper trail" in the event of litigation. We counseled clients to write letters to document important conversations and to keep hard copies of all correspondence. Architects, designers, and developers had rolls of drawings in their archives "just in case."

However, the way people communicate in business has changed. We are living in a world of scanners, Blackberries, and other electronic devices that make saving information and communicating with people incredibly fast and easy. Huge quantities of documents can easily be scanned and stored electronically, and people on the go can receive and shoot out hundreds of e-mails each day.

Along with that ease, however, comes concern about what information is being communicated, how it is being saved, if at all, who is saving it, and what will become of it in the event of litigation. Casual remarks in an e-mail can come back to haunt you in a lawsuit years down the road.

Similarly, the ease of storing communications brings up the question of what to keep and what to discard. It truly depends on the subject and the content. In some cases, discarding materials and e-mail is sound policy. However, you should always save materials related to ongoing or potential litigation. When in doubt, you should check with your legal counsel.

When professionals used to sit down and write letters, there were usually several drafts going back and forth to a secretary, who in turn might suggest edits. There may even have been others in the organization who reviewed these drafts before they were deemed satisfactory to be sent out on company letterhead.

The original would be mailed out and a photocopy would be kept in the file. Nowadays, many executives type their own correspondence on desktops or portable laptops. They e-mail it without having anyone review it.

Of even greater concern to an attorney are the quick messages sent out on handheld electronic devices. Sometimes these communications, sent from a street corner or while sitting in a coffee shop, are not "thought-out" messages, but instead are quick, off-the-cuff remarks.

Sometimes these e-mails have rather blunt communications, such as salty language describing people involved in a transaction. Even though these e-mails may be sent to one person, there is no accounting for whether the recipient chooses to forward that message to others and who may decide to save it.

Consider this example. I know of a case in which there was a claim that people in a corporation rigged a board of directors vote to achieve their ends. One board member e-mailed another, and accused the recipient and a third board member of rigging the vote. The accused people saw this e-mail and replied to it by e-mailing each other and joking, "I knew you rigged the vote. Now you have finally admitted it."

It turned out, however, that it was not reasonable to assume that any other readers would know the messages were intended to be sarcastic. If this happened at your company, no one else would know for certain that it was sent in jest until hours of depositions were taken of the writers explaining this away. The expense of litigating the case could reach enormous proportions.

Remember to think before you write and consult with legal counsel periodically about communications. You should review what you plan to say and what records are being saved and by whom.

You should also set standards on how you are communicating with one another within your company. I counsel my business clients about the need to remind their staff about these issues, because many private communications are being sent out on company computers.