Do you have the right framework in place to handle cross-border litigation?

Every multinational or domestic organisation that is trading around the world can become involved in pursuing or defending legal action in the US. For UK or EU organisations, proceedings in these unfamiliar territories in combination with the complex European privacy rules can ?be very risky and costly.

Some background

In the US, there are few limits on the types of cases that may be brought before US courts. A broad range of disputes from contractual disagreements, copyright and trademark infringements through to consumer fraud and product liability may be addressed.

Whatever the issue, any business that operates in the US should be prepared to defend itself against a range of potential complaints relating to their business operations. Software solutions can be used to support a proactive way ?of working to ensure a company continues to comply with state and federal rules.

Who is affected?

In short, any organisation with business operations within the US is affected. A US court can exercise jurisdiction over ?a person or company where that entity has ‘minimum contacts’ with the particular state in which that court sits. This means anything from contracting for the provision of goods or services or benefiting from conducting business within the state. It can even mean holding a US bank ?account or owning property.

If it is determined that you are subject to litigation ?under US law, you need to have a strong grasp on the ?issues of the jurisdiction you are operating in. Some of ?the issues you may face include:

• Conflicting jurisdictions. European companies involve US law firms to process all data, but this can lead to violations of European privacy and data protection regulations. This can lead to huge costs and future ?risks, because you never know where your data will ?end up in US courts.

• Strict and unfamiliar legal hold, identification and collection requirements and best practices. A party’s obligation to preserve discoverable data begins from when the complaint is filed. This is usually followed swiftly by a legal hold notice. By distributing a legal hold notice, a party instructs everyone involved to actively avoid (accidentally or purposely) destroying any data that could potentially be part of the litigation. This legal hold is often unfamiliar territory for UK or EU companies.

• Cross-border review and safe harbour. In order to bridge the significant differences between the European Commission’s Directive on Data Protection (1998), which prohibits the transfer of personal data to non-EU countries that do not meet the EU adequacy standard for privacy protection, and the US sectoral approach that relies on a mix of legislation, regulation and self-regulation, organisations must comply with a framework of seven Safe Harbor Privacy Principles to provide adequate privacy protection, as defined by the directive.

• Multiple languages and data encoding formats. ?The multilingual nature of cross-border litigation ?can be challenging.

What does this mean to the discovery process?

The burden of discovery, especially under such circumstances, has increased exponentially because businesses generate a staggering amount of electronic data.

US e-discovery rules can force companies with subsidiaries in the US to provide all kinds of data (including personal data) to a court, while most European courts forbid the transfer of personal data to other legal entities as well as to countries that do not provide an adequate level of data protection. A lack of compliance can force the company into an unfavourable settlement.

The federal rules instruct parties to address e-discovery issues early. Parties are encouraged to agree on the scope of the discovery, including the type of responsive data to be included, the format in which data will be produced and where parties should search for the data.

Software can assist with this process. Technology vendors like ZyLAB offer flexible, on-demand services that can be applied on a project basis or used inside the firm to capture electronic material in a comprehensive, efficient and cost-effective manner.

A solution

ZyLAB is your partner in employing technology to avoid the pitfalls of cross-border litigation. By using state-of-the-art solutions, EU and UK law firms can process data and run a first-pass review in Europe to make sure that privacy and Data Protection Act rules are not violated, before the requirements of the US Federal Rules of Civil Procedure or other e-discovery and e-disclosure requirements are addressed.

Using ZyLAB’s e-discovery & production platform provides a defensible strategy to combat issues, by:

• identifying, preserving and collecting data under US requirements, standards and best practices;

• using technology to identify data containing potential privacy law and data protection compliant data (ZyLAB offers safe harbour-certified and SAS 70 type 2 compliant data facilities) to avoid penalties;

• processing and reviewing the data in Europe or per country or conduct a true early case assessment in Europe – find what really matters and use this to negotiate a more favourable settlement on your terms;

• using technology for machine-assisted review and machine translation;

• using random sampling for legal defensibility of your automated processes; and

• searching in over 400 languages and encodings, enabling a first selection to be made on what is relevant and reducing the time and cost of external translation services.

Speed is always essential to keep costs down and minimise disruption to business. Being prepared can be a defence in itself, in some situations. Almost everything stems from a need to show a consistent and solid methodology. In complying with these requirements, software is your friend.

Proactive and ongoing management

The take-home messages here are ‘preparation is everything’ and ‘lightening really can strike twice.’ It’s fair to assume that, with litigation on the rise, in-house counsel and law firms today need to think about being set up to handle these cases with some regularity.

ZyLAB advocates using technology in e-discovery as a way to deliver competitive advantage, while keeping the costs proportional. The software manages the process, putting lawyers in control of managing the information.

For more information from ZyLAB on cross-border litigation, please see our webinar with Chris Dale, available at: www.zylab.co.uk/crossborder