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What are the risks of US litigation?Commentary on the flow of lawsuits and necessary preparations
2023/6/9
Just because a Japanese company does business primarily in Japan, it doesn't mean that it is immune to US lawsuits.Legal professionals of companies with some degree of global trading should be prepared for litigation in the United States.When a lawsuit is filed in the United States, "eDiscovery" becomes important.Since there is no similar system in Japan, it is difficult to grasp the details.In this article, we will introduce the basic knowledge of what kind of system e-discovery is, the background and current status of its introduction in the United States, measures, and support services.
eDiscovery is the electronic disclosure of evidence in US lawsuits.
eDiscovery is the electronic discovery of evidence in American litigation.In US lawsuits, both plaintiffs and defendants are obliged to disclose information such as documents and materials related to the case.
This disclosure of evidence is called "discovery." With the revision of the Federal Rules of Civil Procedure in 2006, not only documents but also electronic data such as e-mails can be submitted.That is "e-discovery".You must collect and disclose it yourself, and you cannot alter or erase the data you submit.If it is determined that there has been a violation, fines may be imposed, and suspicions of tampering with evidence may also be disadvantageous in court.
In this way, failing to prepare for e-discovery in US litigation is a big risk, but the reality is that Japanese companies are still lagging behind in taking countermeasures.
U.S. Litigation Flow
When a lawsuit occurs in the United States, it is required to have a discussion between the parties called "pre-trial" before the trial is conducted by the court.What is done at this time is "discovery", that is, the disclosure procedure, which is a major feature of US lawsuits.
The aim of this system is to allow both plaintiffs and defendants to correctly recognize the facts by conducting discovery before the trial and disclosing evidence to each other, and to resolve the dispute between the parties as much as possible, that is, to reach a settlement.
In the first place, litigation in the United States rarely proceeds to trial itself, and most cases end in a settlement at the pre-trial stage, or by a summary judgment without a trial, called "summary judgment."In this way, discovery is an important procedure that affects the course of lawsuits in American lawsuits.In particular, in today's IT-advanced era, the ratio of "e-discovery" for electronic data is large, and it is no exaggeration to say that whoever wins e-discovery wins lawsuits in the United States.
Scope of data that requires information disclosure in e-discovery
The target of e-discovery is not only e-mail, but also includes data obtained from all electronic information such as short messages, SNS, online documents, databases, internal applications, website contents, etc.
Even if it is a trade secret, it must be submitted in principle, and it may be requested to submit retroactively.Even Japanese companies that store data and content only on domestic servers still need to submit the data, and there are many cases where translation into English is required.
Importance of eDiscovery measures for Japanese companies
There are many cases in which Japanese companies, particularly manufacturers of automobiles and semiconductors, are involved in international lawsuits.Any company that has business dealings with the United States has the potential to be sued, and it is highly conceivable that not only a company may be a party to the lawsuit, but a subsidiary may also become involved in the lawsuit, or vice versa. Masu.
In this age of globalization, international litigation is not someone else's problem.In addition, the US traditionally has the idea that "perpetrators who can afford it should provide some relief to victims who cannot afford it."In a jury trial, where convictions tend to play a large role, it is easy to pass, and the plaintiffs would like to demand monetary compensation from multiple parties, which is called a deep pocket. We will file a lawsuit for monetary compensation, focusing on the other party.
Japanese companies are in this deep pocket, and because they are unfamiliar with the structure of US lawsuits, they are always at risk of being sued.It can be said that e-discovery measures are essential for Japanese companies.
Risks caused by insufficient preparation for e-discovery and mishandling
When you are involved in a lawsuit, you have to submit relevant documents and data within a short period of time.When submitting, work such as identification, preservation, collection and analysis of information is required.Preparations during normal times are essential to speeding things up.If you make a mistake in the initial response, you will not be able to properly protect data, and the company will be unable to grasp the facts and develop a rational strategy.In some cases, this results in additional costs.
In fact, a certain Japanese pharmaceutical company was sued for destruction of evidence in a U.S. lawsuit over a diabetes treatment drug because the information requested by e-discovery was destroyed, and was sued for a huge amount of compensation of approximately 6200 billion yen. I got into a situation.
What is the e-discovery workflow “EDRM”?
An important element to be aware of in eDiscovery measures is "EDRM". EDRM is an abbreviation for The Electronic Discovery Reference Model, which is a workflow for implementing e-discovery.
Starting with "information governance" as a preparation in normal times, in the event of an emergency, we "identify" the target data, "protect" it so that it is not deleted or changed, and then "collect" it.We perform “processing” such as deleting duplicates and narrowing down data, extracting only what is necessary for litigation and “analyzing” it.Then, the report is "created" after being "viewed" by an expert.It consists of a total of 9 items up to "submission" to disclose it.
Advantages of introducing the e-discovery support service
For eDiscovery measures, it is recommended to introduce the most suitable support service.The advantages are explained below.
Efficiency and cost reduction of EDRM work
E-discovery measures are carried out in accordance with EDRM, a global standard workflow. You may think that if you understand EDRM, you can handle it with internal resources.However, in reality, it includes data obtained from not only emails but also messages, online documents, content, and all other types of electronic information.
A company may have more than one litigation case at a time, and may handle multiple cases at the same time.Professional knowledge and translations are required, as well as review software that efficiently checks all types of documentary evidence.It's not something you can handle in-house while doing your usual work.
With support services, you can efficiently handle the XNUMX-item EDRM process.Especially in document review, which is said to account for the majority of e-discovery, you can significantly reduce costs by using a support service that has the know-how and technology to extract only the necessary information from a large amount of electronic data.
Speedy litigation preparation
In addition to enhancing information governance during normal times, it is also advantageous to be able to quickly respond to data preservation and collection in the event of an emergency.EDRM, which is a global standard workflow, can be handled quickly in a one-stop manner, so that even sudden lawsuits can be dealt with quickly, increasing the possibility of proceeding favorably in litigation.
Accurate and prompt submission of evidence
Preservation and collection of target data is important, but the point is how quickly and accurately you can submit evidence documents.By using software that identifies documents that may be misjudged by service vendors, or leaving search and extraction to AI, it is possible to submit evidence documents accurately and quickly.
How to identify a reliable eDiscovery vendor
It is realistic to use support services for e-discovery measures.Here's how to spot a trusted vendor.
Do you have enough eDiscovery experience and expertise?
Let's check what kind of company and what kind of project we have worked on, regardless of whether it is domestic or overseas.The number of results we have worked on becomes know-how as it is, which leads to low-cost, high-quality support.The track record of Japanese companies is also important. You may think that e-discovery is a U.S. system, so a vendor with a proven track record in the U.S. would be more advantageous. Vendors who are already there will have much less stress here.Don't forget to check how well the potential vendor understands the Japanese language and Japanese business culture.
Are technical capabilities such as tools and software in place?
Technology is as important as experience and know-how when choosing a vendor.Having tools and software in place greatly affects quality and cost. In eDiscovery, the most time consuming and costly process is the process of selecting evidence data.
By using software that can identify documents that may have been misjudged, and by making full use of AI that can be left to search and extract, the accuracy of work that used to take hundreds of people for several months And speed is overwhelmingly improved.Reduce labor costs and reduce costs.
Is the data security environment and privacy support perfect?
When dealing with huge amounts of data, discovery work is often done using online tools.There is no problem if the vendor consistently performs all processes in-house, including work with online tools, but caution is required if only this online tool work is outsourced to other companies.In that case, it means that important litigation data ends up in a completely unknown company.Also, sending data overseas increases the risk of information leakage, so I would like to check whether there are in-house facilities for data hosting and data processing facilities in Japan.
Is the cost/unit price appropriate?
Data review costs account for the largest portion of discovery costs.Estimates of review costs often indicate a "unit price" per data volume, but it is premature to select a vendor based solely on this unit price.This is because the total cost varies greatly depending on whether the unit price is calculated based on "data before decompression" or "data after decompression".
Vendors that presuppose "data after decompression" usually set a lower unit price, so we tend to choose that, but the total number of files after decompression increases significantly compared to before decompression.Considering the total cost, there are many cases where the vendor of "data before decompression" with a high unit price is cheaper.
In a similar example, even if the unit price is low, there are cases where "data before narrowing down by keyword" is the basis for calculation.You should choose a vendor who does not get confused by the unit price, explains the work clearly, and presents the final estimated amount.
Do you have a good customer service and support system that you can consult when you have a problem?
There is a time difference between Japan and America.If you send an e-mail, you can't get a reply after 12 hours, and you can't get through a phone call.Whether global correspondence is possible and speedy service provision are also important criteria for judgment.
With FRONTEO's e-discovery support service
Since its founding in 2003, FRONTEO has worked to solve various corporate issues as a pioneer in international litigation and fraud investigations in Japan.In particular, the e-discovery support service is a one-stop solution for the entire process of EDRM, which is a global standard workflow, and has been involved in 8500 discovery projects so far, and has a reputation for technology and know-how based on outstanding experience. I have.
Utilizing our in-house developed AI engine KIBIT, we have achieved significant labor saving and cost reduction during document review. By combining our experience in dealing with projects and our in-house AI engine, we have achieved high accuracy and efficiency that other companies cannot. is realized.
We have data centers in Japan, North America, South Korea, and Taiwan, and we have a system that allows us to store data without taking it out of the country, and we have perfect security.We provide seamless services to our clients' headquarters, local subsidiaries, and law firms.Fast support with global operations.
[Related article] Details of FRONTEO's e-discovery support
As a pioneer of comprehensive e-discovery support company in Asia, FRONTEO has been involved in about 8500 projects.We will introduce a full range of e-discovery services and efficient flows backed by our track record.
