Avoiding Costly Mistakes in eDiscovery



Pharma IQ
07/22/2011

The vast quantity of electronically stored information (ESI) being produced by the life science and pharmaceutical industries is only likely to increase in the coming years – as are the number of technologies used to manage it.

eDiscovery has always been a time-consuming task, particularly for an industry which regularly finds itself involved in intellectual property disputes, but these changes are only likely to make it more so.

Jeff Seymour, a principal at Deloitte Financial Advisory Services, explained: "The demands of eDiscovery are clearly growing."

As an example, eDiscovery services provider Daegis was recently assigned by a worldwide healthcare diagnostics company to help with an eDiscovery request, collecting 300GB from mailboxes and general business files of more than 20 users.

And research conducted last year by Deloitte Forensic Centre, taking in the views of over 300 IT, legal, risk and compliance professionals in the US, found 49 percent believe their organisation is likely to increase its eDiscovery efforts in the next three years.

Some 44 percent said they expected the challenges surrounding eDiscovery to increase, with 39 per cent predicting they will be dedicating more resources to the task.

It is communication, or lack of, between departments which is causing many of the issues surrounding eDiscovery.

"With electronically stored information rapidly rising in volume, avoiding eDiscovery missteps requires cooperation from two corporate functions that typically have little in common and often don't speak the same language: legal and IT," Seymour explained.

There was little consensus that IT departments and legal departments understand the efforts both are making in the field of eDiscovery – a problem which is only likely to be heightened within the pharmaceutical industry with its strict regulatory environment governing the storage of data.

Toby Bishop, director of the Deloitte Forensic Center, recommended cross-functional eDiscovery training to help IT and legal departments better understand the resources at their disposal and how they can work together to meet their eDiscovery requirements.

New technologies are also having their own impact on the eDiscovery landscape – the cloud being a major one.

For the research departments within the life sciences industry, the cloud brings with it the opportunity to store vast amounts of data - without the investment in physical infrastructure - which can be accessed from multiple locations.
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But for the legal and IT departments, it presents another challenge in retrieving the data needed to comply with eDiscovery requests.

Research conducted by Clearwell Systems, in conjunction with the Enterprise Strategy Group, found just 25 percent of respondents were prepared to deal with an eDiscovery request comprising data from the cloud, Network Computing reported.

Some 37 percent said they had no clear policy for dealing with such requests and the problem, according to Katey Wood, an analyst in information management for ESG, is that companies put data in the cloud for storage, without having a clear strategy in place for how they will achieve it.

The majority of organisations were looking at bringing their eDiscovery functions in-house, but Seymour noted that this brings with it additional risks which were previously taken on by third-party providers.

All this is happening at a time when the pharmaceutical industry is expanding its geographical boundaries and authorities are clamping down on international operations of the organisations registered within their borders.

The United States is increasing enforcement of its Foreign Corrupt Practices Act, leading to a rise in the number of eDiscovery requests, while the UK has introduced its Bribery Act.

Life sciences companies which fail to produce their relevant documentation for FCPA investigations find themselves with potentially heavy fines, money which could have otherwise been targeted at boosting the pipeline and ultimately improving the bottom line of the business.