Recent events have underscored the importance of instituting comprehensive document management measures to avoid substantial penalties:
- American Home Products paid nearly $3.75 Billion partly because an email exchange between employees revealed a cavalier disregard for the potentially harmful effects of one of its weight-loss drugs.
- Boeing paid a large settlement to a shareholder group because the Company retained emails suggesting securities fraud beyond the Company's stated email retention policy.
- Prudential was fined $1MM for records destruction and for failure to adopt an effective records management policy
- In Zubulake v UBS Warburg LLC, a jury awarded $29.2MM in damages to one saleswomen for gender discrimination ($20MM of which were punitive damages). In awarding punitive damages the court cited UBS for destroying email messages and failing to preserve other evidence relevant to the claims.
- Sarbanes-Oxley places the onus for comprehensive document submissions in any dispute squarely upon the subpoenaed party and provides significant penalties for the alteration or destruction of certain documents.