What's in your records management system? - First in/First out - related article: Keys to a Successful Records Retention System

Computer Technology Review, Dec, 2003 by Rich Harada

Corporate IT centers are challenged to implement long-term archiving and data preservation systems to store company records while also being able to provide quick access to those records. To put a further strain on IT professionals, compliance mandates including Sarbanes-Oxley, SEC Rule 17a-4, HIPAA and other regulations require companies to electronically archive and store records for specific amounts of time. These requirements can cause a major impact on a company's business, and in some cases may lead to a company's demise if not met properly. One way to minimize the preparation time, should an audit be required, is to implement an electronic records retention system with a tape storage system to ensure the data integrity, backup and restoration of such critical data.

While compliance is a growing topic of discussion, civil litigation, both legitimate and frivolous, also is a concern for many companies. Corporations involved in consumer products, healthcare, food and drugs, autos (and tires), insurance and securities hold the highest liabilities and continue to spend an enormous amount of time and capital defending themselves from these suits.

There have been many high profile liability cases brought in the past few years:

* Food & Drug: Tobacco firms settling with states on the hazards of smoking

* Autos: Accidents caused by malfunctioning tires

* Securities: Investor lawsuits caused by improper accounting practices

* Healthcare: Malpractice suits and rising insurance costs cause hardship on qualified physicians

Civil litigation can originate from almost anyone: suppliers (contract disputes), customers (product failures), partners (disclosure of secrets), current and former employees (harassment), and shareholders (inept/crooked management). But according to the American Bar Association, almost all civil suits are actually settled before they get to trial. A great many of these settlements are made because smart plaintiff attorneys know the fight/settle break-even point of the defendant and ask for something just under that amount. However, a large percentage of suits are settled because the evidence that would be produced at trial is overwhelmingly on the side of one of the parties, and pressing to go forward with a trial would be costly and fruitless for the losing party.

One of the keys to providing solid evidence is in having well-documented records. Given the rules of discovery, both the plaintiff and the defendant should have equal access to pertinent records and, if they exist, the matter should be easily settled. It's when records don't exist, have been lost, are ambiguous or have been apparently tampered with that these challenges often go to trial. In these cases, it becomes an issue of whose story the judge or jury believes, and the plaintiff usually wins.

Keeping great records or being a good corporate and community citizen won't always keep you from getting sued. The best situation one can hope for is to limit the damages. Having quick and ready access to pertinent records will permit management and its legal counsel to make an informed decision on how to proceed when challenged. You may find that the plaintiff has a valid complaint, and you'll be able to offer an equitable settlement for much less than a jury might award. Or, when your company is in the right, your records can be used to convince the plaintiff's counsel that they have no chance of winning (in which case he/she doesn't get paid) and make the whole thing go away. But when you don't have convincing records, how can you make a decision?

Keeping records of everything for long periods of time can be very expensive and requires a lot of storage space. Much of the data stored to meet compliance mandates aren't necessarily critical to the day-to-day operation of your business, so it makes sense to store these records on the most cost-efficient storage medium available that meets your capacity, access, and retention requirements.

Tape systems are a great choice for storing archival information and can help cut costs dramatically. Tape media is the least expensive electronic storage technology available. And if you already have a tape system for backup, whether it's a single drive or an automated library, it can be easily used for storing more information by adding additional tape cartridges. Automated tape libraries also offer advantages of lowering the cost of incremental storage and the on-going expense of running the library, as they use considerably less power and air conditioning than a comparable-sized hard-disk system.

As more and more companies deploy systems with data stored on tape to address compliance requirements, perhaps it will become common practice for all businesses to have detailed records that either prove or disprove claims--and that should go a long way toward deterring those who are looking for a free handout.

Take a Litigation Preparedness Test

Pretend you just received a legal notice stating you're being sued because someone was hurt using a product that you stopped making or selling several years ago. Can you quickly assemble all of the documents relevant to the design, production, distribution, sale, recommended use and repair service of this product? These would include user and service manuals, warning labels, design specs, testing results and safety certifications, customer service logs, return and repair records, warranty policies, and sales invoices. And don't forget all those e-mails ...