As Keith Taylor of Northumberland County Council explains, “We knew that regulations would require us to have a strong grip on our digital information – the data we needed to keep and the data we needed to eliminate,” explains Taylor. “Our desire to ensure compliance was a key driver in our decision to purchase a digital archiving solution.”
Beyond the public sector, other regulations have begun to impact public and private business. Market Harborough Building Society was concerned about compliance with the myriad of regulations affecting banks, including the Data Protection Act and the upcoming Basel II. If a company is found not to be compliant with these regulations, fines and penalties can occur. “We knew an email archiving system would help us operationally by reducing retrieval times and the size of the Exchange database,” explains Neil Williams, assistant general manager of IT at MHBS. “But it was our compliance officer who was really driving the process; he wanted to ensure we were compliant with the wide array of regulations and policies being developed.”
This year will bring more compliance worries to businesses in the UK. July is the deadline set by the US Sarbanes-Oxley Act for foreign companies listed in the US. And financial institutions will need to start to prepare for another major regulation, the EU’s Markets in Financial Instruments Directive (MiFID), that will take effect in 2007. While all of the regulations are concerned with different issues and govern various industries, almost all address how electronic information is handled and stored. A solid information retention policy and system can alleviate compliance woes.
While businesses need to be compliant with regulations, they also need to be prepared for legal actions, including litigation, against them. Preparing the vast information stores within a company for possible litigation can be daunting. But doing so can pre-empt the spiralling costs of electronic disclosure when a dispute arises. Why? Recent changes in the Civil Procedures Rules governing the courts require a deep exploration into a company’s electronic information during a disclosure request. With more than 14 megabytes of email sent and received by every user every day that can be a high order. As such, the associated costs of responding to a timely disclosure request when working with bloated email stores and antiquated or haphazard records retention policies – such as a backup tape recovery process – can be crippling.
Litigation readiness is a new, but growing practice in the field of electronic disclosure that reduces litigation risk. In a recent report, IDC writes: “Litigation readiness is ultimately about keeping your house in order before an imminent risk strikes. In other words, a systematic approach to electronic discovery has a high payoff by eliminating the fire drills and easing the pain that comes along with legal discovery.”