Businesses Impacted by Failure to Produce Data for Legal Disputes in UK, Germany and the Netherlands

A new study, commissioned by CommVault and conducted by market research firm Dynamic Markets Ltd., reveals the top issues that legal professionals and other senior managers find most worrisome regarding the discovery of electronically stored information (ESI) and conveys a marked sense of concern among those tasked with mitigating organisational risk.

The 2008 survey: Corporate Hide and Seek examines the perceptions of 300 in-house legal professionals and senior managers in the UK, Germany and the Netherlands related to the common legal and financial risks associated with not being able to retrieve documentation, as well as its impact on their organisations.

Among the report’s key findings:

• One in two organisations (47 percent) questioned have suffered serious consequences as a result of IT systems failing to deliver on demand critical data needed to support legal disputes. These consequences include the payment of penalties, loss of the legal dispute, or the delay or failure to produce the required information.
• 39 percent of the companies interviewed believe they are still at risk of receiving financial penalties for not being able to produce documents by legally imposed deadlines.
• Of those who believe they are still at risk, 58 percent have experienced delays in producing information and nearly half (47 percent) have failed to produce such critical information.
• Nineteen percent of businesses have lost a legal dispute and 19 percent have also received financial penalties.
• Despite 80 percent of organisations claiming to have made an investment in IT to address discovery challenges, 60 percent of respondents think their IT department is not always able to deliver information quickly enough for them to do their legal job efficiently. If future legislative changes shorten legal deadlines, this problem is predicted by respondents to worsen; making it even harder for legal departments to respond to discovery requests in a timely manner.

"eDiscovery and compliance demands continue to be of critical concern to many European organisations. After highly publicised scandals, such as Enron, we expected the research to show that businesses had adopted far more rigorous approaches to identifying and retrieving electronically stored information across backup and archived data aimed at improving litigation readiness and reducing organizational risk. What is surprising is most organisations interviewed had suffered serious consequences because they were unable to retrieve and recover specific data, yet the significant majority felt they had adequate technology in place to produce critical information on demand. This is obviously not the case," said Steven Rose, CommVault’s executive vice president of EMEA.

Additional Information

• Corporate Hide & Seek was commissioned by CommVault and details quantitative research with individuals responsible for dealing with legal issues for large companies (250 or more employees) in the UK, Germany and the Netherlands.
• A total of 300 interviews were conducted with in-house legal professionals (94%) or with a senior manager who gets involved in legal issues for the company (6%). All respondents confirmed prior to interview that they personally get involved in legal disputes their organisation might have, such as payment disputes, breaches of contract or NDA’s, employment issues etc. For the non-legal professionals, job titles included CEO, FD, Head of Personnel, HR Manager, Personal Development Officer, Director of Administration, IT Director and Officer of Personal and General Affairs.