Australian companies are more likely to settle legal disputes out of court simply because the cost of finding documents outweighs the settlement cost, but lawyers win either way.

ASX-One Australia managing director, David Thompson, said Australia needs a federal approach to document retention and monitoring of electronic documents, particularly e-mail, which is regarded as the worst offender.

"With states continuing to introduce their own legislation, it will become a nightmare for national companies to be compliant," he said.

Victoria is set to introduce the Document Destruction Bill which makes it a criminal offense to intentionally destroy documents to prevent evidence being used in court, while NSW has introduced the Workplace Surveillance Act.

"These are both new, state-based laws, which is why we need a national approach," he said adding most companies don't even have e-mail retention policies.

While some e-mails do have to be legally retained, Thompson said back-ups don't always work.

"If a legal discovery order arrives, you usually have only days or at the most, weeks, to deliver those documents. There wouldn't be too many companies in Australia that could produce a specific e-mail from seven years ago in a few days if they were relying on backups," he said pointing out that in the US companies spent $US1.2 billion this year on e-discovery services.

Blake, Cassels and Graydon partner Sunny Handa said a data retention and retrieval plan is critical for effective compliance.

He pointed to Sarbanes-Oxley as one example of compliance which requires public companies to store data and retrieve it at any time.

Computerworld Australia

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