The Records You’ll Need if You Ever Get Sued

Understanding the role of electronic evidence can increase your odds of success in a lawsuit.
A process known as electronic discovery (or e-discovery) is quickly evolving to help small businesses meet legal obligations. (Photo: LeoWolfert/Shutterstock)

No business owner plans on getting sued, but it’s smart to understand a few things about electronic records in the event it happens.

“One of the number one things that a small business owner needs to wrap their heads around and prepare for is their duty to save documents and to hand them over to their lawyer,” said Jeff Kerr, a trial attorney and small business entrepreneur.


“One of the number one things that a small business owner needs to wrap their heads around and prepare for is their duty to save documents and to hand them over to their lawyer.” -Jeff Kerr
(Photo: Jeff Kerr)

Kerr discovered his speciality — using electronic evidence to corroborate his client’s claims and pressure opponents to settle — while practicing employment law as a founding partner of Mays & Kerr. Now CEO of legal tech company CaseFleet, Kerr regularly speaks and consults on e-discovery. He recently sat down for a Q&A with NCR Silver.

What is e-discovery?

Kerr explained that discovery is the process before a trial when the two parties uncover evidence for the case. Very often this includes a request to the opposing party for information. “For a long time, lawyers always thought about discovery as involving the exchange of printed ut paper documents, but that’s no longer the case.”

“Today,” said Kerr, “a lot of the information that is going to be requested and provided is going to exist in electronic format. By that I mean emails, text messages, data in a POS system or payroll system. So the profession has adopted the term ‘e-discovery’ to refer to this new reality.”

What types of data can be used as electronic evidence?

According to Kerr, the data that can be used as evidence depends upon the type of case. He gave the example of an employee claiming they weren’t paid proper wages.

“The data that could come into play would be any kind of payroll records and any kind of timekeeping records, and even things that you may not immediately think about. Text messages from the owner of the business to the employee might help to show the hours that the person was working. And surveillance video could show when the employee was at the location.”

What are the legal obligations for keeping potential digital evidence?

If you’re faced with litigation, your attorney will give you a document called a legal hold. It provides instructions for preserving any evidence related to the lawsuit, including electronic information and paper documents.

“So if you are aware that a lawsuit is about to be filed against you based on some series of events that occurred — whether it’s a conflict with a customer, with an employee or perhaps with another business — as soon as you become aware of the fact that litigation is possible, you have a duty to keep safe and prevent from being destroyed any kind of records that relate to that series of events.”

If you don’t, the penalties can be severe, Kerr warned. “They can include having default judgement turned against you, which basically means that the other side wins without having to prove their case.” Or, if the missing evidence would have been harmful to you, the deletion could turn the jury against you.

“When there’s evidence that there has been tampering with or destruction of evidence, it can really change the entire case, and it can cause the business to lose or be forced to settle at a very high dollar value a case that they otherwise might have won,” said Kerr.

What should I ask my attorney about e-discovery?

Kerr says you’re more likely to win a lawsuit if your attorney has a solid understanding of e-discovery and electronic evidence.

“Find an attorney who understands the need to both protect your own electronic evidence so that you aren’t ever accused of destroying or mishandling it and who is going to have a strategy for getting electronic evidence from the other side,” he said.

“If you believe that you’re right in the case and that you have a strong defense and your attorney doesn’t know how to obtain this kind of electronic evidence from the other side, then it is going to be much harder to prove that you’re right.”

Kerr recommended asking your attorney to articulate his or her plan to protect your electronic evidence, and ask for specifics. “It shouldn’t just be, ‘We’ll hire someone to help us figure this out.’ The attorneys should know about it and not have to rely completely on another expert that you would have to pay for.”

“If you find someone that has a good answer to that question, they’re going to give you a serious advantage as the case unfolds.”

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