Investigating the electronic records of a company which has become insolvent can bring with it a number of challenges says John Holden, especially when the number of documents is significant.

There are a number of issues that commonly arise when investigating the electronic records of a company, including:

  • excessive data volumes
  • tight budgets
  • tight timeframes
  • resourcing constraints.

In the early stages of an investigation it is critical that legal teams get to the relevant documents quickly and cheaply in order to develop case strategy. It is vital that the volume of documents to consider is made as small as possible before time is spent reviewing them. For this, Early Case Assessment systems, designed primarily for use in e-disclosure cases, are particularly useful.

Costs in these cases are driven by a number of factors, chiefly:

  • volume of data
  • complexity of documents
  • complexity of the case.

It is possible to keep these costs proportionate by using automated data culling techniques, and by employing a good knowledge of the matters at hand. Reducing the number of custodians (persons who will potentially hold data of relevance) and using date range parameters will have a big impact on the amount of documents to review. In many document collections there are a large number of duplicate documents. Where email collections include backup data, the amount of duplicates can be significant. These exact duplicates can usually be removed without the need to review them and can save huge amounts of time in the review process.

Early Case Assessment systems have been designed to efficiently and automatically remove documents from review populations, allowing them to be applied to cases where the budgets are tight, which is often the case in insolvency processes. By retaining in-house or external IT services until all the data has been gathered, and utilising the latest early case data culling systems, the process not only of gathering relevant electronic data, but of also reviewing and making sense of that data becomes much less of a cost issue and allows for the focused review of books and records in a timely manner.

This, in turn, allows for a more proactive approach for matters such as the speedy identification of assets and location of funds.

The successful use of such systems can be best achieved when the efforts of document retention are put in place early. Close liaison between administrators or liquidators, in-house IT and forensic IT specialists is vital if a low-cost but highly focused document review is to be achieved.

At Smith & Williamson, both our restructuring specialists and our in-house forensic IT teams are used to dealing with the demands of documents retention and investigation, and have excellent experience in this field.

Our electronic systems are at the cutting edge of available technology, but are priced in such a way that does not prevent their usefulness on even relatively modest matters.

Insolvency practitioners have a lot to consider, especially in the early days of a case, but document preservation and the process of quickly understanding those documents should be one of their priorities.

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