Corporate Lawyer Layton Utah
It is vital for a company to preserve its records. Speak to an experienced Layton Utah corporate lawyer to know which records your company needs to preserve. Records are a principal form of evidence used in judicial and administrative proceedings and in internal, external, or government agency audits. They provide a trail of evidence that may be more trustworthy than the memory of witnesses regarding increasingly complicated business transactions. Lawsuits concerning events of one, ten, or twenty years ago must rely more on records than witnesses. And when a legal proceeding involves the word of one against the word of another, a favorable decision is more likely for the party who can make the better showing in court through witnesses and documents.
Companies with high turnover and those experiencing fast-paced and extensive change will need to rely more on documents than witnesses. The originator of a record may no longer be employed or may not otherwise be available as a witness.
Corporate Documents Must Be Written
A court will always find a written document of a verbal agreement to be more trustworthy than the memory of a telephone conversation. When one party disputed the terms of a deal that was made over the phone, the court said that written confirmation of the conversation is the only reliable evidence of transactions where the likelihood of remembering the details of any one agreement, among scores of similar deals each day, would be small.
A witness normally sets the foundation for admission of a document into evidence. This could be the person who created or received the document, the individual responsible for a department, or even the records and information manager.
Consequences of Improper Record Keeping
Failure to maintain the required records can prove costly. A well-functioning records and information management program ensures the existence of valuable and legally required records that will support claims by the company and defend against others’ claims. It also reduces costs and exposure to liabilities by destruction of records that are no longer necessary or valuable. Without appropriate record-keeping practices, a business may discover that it has too many records, not enough records, or records that are not admissible as evidence. Seek the assistance of an experienced Layton Utah corporate lawyer. The corporate lawyer can assist you preserve the records that your business is required to preserve under Federal, Utah and local laws.
Too Many Records
Business executives tend to want to keep every record “in case we’re sued.” However, this defense strategy could backfire on a company. In addition to the unnecessary records storage and handling expense, the document production process for any litigation will be all the more costly and burdensome. Retention of records for periods beyond business and legal requirements also may senselessly expose a business to additional liabilities when those documents are taken out of context in a legal proceeding, or if they contain unfavorable or damaging information. Because records of a creating party are considered an admission of truth by that party, they carry more weight in a courtroom and are being used more and more to the advantage of opposing parties. Older documents are easily taken out of context, and contemporary documents are subject to misinterpretation.
No one is not advocating destruction of potentially damaging or unfavorable records. Destruction of records must be performed according to a formal record retention and destruction program that is based on an established record retention schedule and destruction procedures performed in the normal course of business. Before you destroy any records, consult an experienced Layton Utah corporate lawyer.
Not Enough Records
Attorneys cannot adequately represent a company when records are not properly created and protected. When documents are destroyed before their time, or when some and not others are retained beyond stated requirements, a business may suffer negative consequences in both civil and government actions. If a business has no proof of action or of compliance with the law, it may not receive favorable treatment from an administrative agency or civil court. Or a business may be forced to settle or pay claims when documents critical to its defense or its claim cannot be found. Failure to comply with a court or government agency order to produce records may result in one or more of the following consequences:
• obstruction of justice charges
• contempt of court charges
• a court’s inference that documents were destroyed in bad faith because they contained damaging information
• a finding in favor of the party obtaining the order
Don’t let this happen to your business. Consult with an experienced Layton Utah Corporate Lawyer.
Business has a responsibility to create and maintain records that meet the conditions of trustworthiness and admissibility, as defined in federal and state laws and rules of evidence. Records considered more trustworthy are:
• records of fact–not opinion–prepared by an experienced person
• created at or near the time of an event by a knowledgeable person
• created in the normal course of business
• created and maintained to serve an independent business purpose
• created and maintained to meet a legal requirement
• created by an independent third party
• created before litigation is foreseeable
Testimony by the creator of the record, the records manager, or other qualified witnesses may be necessary to show that these requirements are met. A company also may be called upon to establish in court the existence of a records management program.
When charges of fraud are highly probable, as in financial transactions, an original record will have a higher degree of reliability. When a more accurate determination of age and a handwriting analysis are necessary, the original paper record is preferred by the technical experts performing the analysis. And a paper document bearing the author’s signature will have far more evidentiary weight than the text produced from a word processor–especially when the document’s author is unavailable as a witness.
When the trustworthiness of a record is challenged, the party producing that record as evidence will have the burden of proof of authenticity and trustworthiness. If a record is a duplicate, its owner must be able to show that it is an accurate reproduction of the original.
The easier it is to alter or remove data from a record without detection except by a technical expert, the less likely the record will stand up to a challenge to its accuracy and trustworthiness. As a result, there may be difficulties regarding dependence on computer records as evidence. Until there is clarification in the courts, issues of trustworthiness may be addressed by appropriate record creation, processing, and production procedures, as well as documentation of those procedures. The trustworthiness of records may be determined by the procedures used to create, maintain, and produce them. The methods necessary to authenticate records will vary slightly from one information system to another. In general, a records program that typically produces trustworthy records can document the following activities as having occurred in the normal course of business:
• written records policy and procedures
• development and administration of records retention schedule
• audit trails of procedures to create, process, and produce information
• certifications of authenticity for document reproduction processes, such as filming and electronic imaging
• records management training activities
• records program audits confirming that what was supposed to happen did in fact happen, and any remedial action taken as necessary
• sanctions for employee noncompliance with records policy
The records called upon during pretrial discovery and as evidence during a trial may be a blessing or a curse. If the records contain sufficient data substantiating the company’s claims, charges against the business may be dropped or a reasonable settlement may be reached. Or, they may contain information that may be used successfully by the opposing party. How well records are created, maintained, and destroyed will determine how well the program reduces certain risks and losses from any court proceeding. Based on an assessment of costs, risks, and benefits of various record-keeping practices, an experienced corporate lawyer can determine the best approach that provides flexibility within the legal, ethical, and practical constraints.
Records destruction programs hinge on the premise that nearly any corporate document–no matter how innocent it may seem–may become a weapon in the hands of an opposing counsel. A carefully developed and administered document destruction program is especially important to a business likely to be involved in litigation. It can be most effective in defending against antitrust charges, employee claims, or product liability disputes, because these cases often are won or lost on the strength of incriminating documents uncovered by a grand jury or a plaintiff’s counsel in discovery. A proper document destruction program might eliminate any incriminating evidence.
However, a degree of risk is involved in a decision to destroy records prior to any legal requirements or prior to the expiration of an applicable statute of limitations. A statute of limitations establishes a time period during which a claim may be filed, so a litigation strategy to retain records for all or part of the time period will be based on the importance placed on protecting the company’s right to a proper defense against any claim and to file a claim against another party.
An experienced Layton Utah corporate lawyer will weigh the costs, risks, and benefits to determine the most reasonable retention period for individual record groups. There certainly will be circumstances in which retention of specific records for the entire statute of limitations is advised. If a company is likely to be a plaintiff, or if an adverse party would have sufficient information to file a claim without the need for discovery, it may be best to retain relevant records for the full statute of limitations. If the risk of a claim and loss against the company is small or nonexistent, or if there is little prospect of being a plaintiff, the corporate lawyer may advise retention of records only long enough to meet business needs because the high costs of storing the records outweighs the risks of any losses.
A Company may determine that the retention of records for the full statute of limitations time period would create an unreasonable and an extraordinary burden. The risks of a shorter retention period also may be appropriate when the statute of limitations is in a state in which the company does little business or when the statute of limitations is deemed excessively long compared to those of other applicable states.
Rules of Evidence
Managers should become familiar with the federal and state rules of civil and criminal procedure that apply to their particular business. A computer printout shown to accurately reflect the data is considered an original record. Government agency regulations may vary regarding any record forms and their technical requirements for records that are subject to investigation and audit. Computer output microfilm (COM) is treated as a computer record, or original, by some agencies, while others treat COM as a microfilm, or duplicate record. A duplicate record may be admitted into evidence in place of an original provided the duplicate accurately reproduces the original and the authenticity of either is not questioned.
A business must anticipate what the legal requirements may be based on existing rules of evidence. However, the use of imaging has been tested successfully in various courts.
It has been estimated that 80 percent of the time and expense of a typical lawsuit involves pretrial examination of facts through discovery. The intent of the discovery process is to help the parties prepare to litigate by cutting down on the number of surprises, and frequently it helps them decide to settle before going to trial. In a typical corporate lawsuit, there may be a formidable volume of documents in the possession of the business, adversarial parties, and third parties. These records, in varying conditions of quality and states of organization, may be scattered throughout a number of locations. Warehouses or rooms of paper have been filled by cases involving complex financial transactions, liability, technical product development, engineering or construction projects, long-term pollution allegations, and multiple plaintiffs and defendants. It is therefore important that your business preserves its records carefully.
Free Consultation with a Corporate Attorney in Layton Utah
When you need legal help for your business, please call Ascent Law for your free consultation (801) 676-5506. We want to help you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506