hen is a letter not a letter?
In some construction industry contracts, a letter is not deemed to be a communication if it’s an e-mail and in today’s digital realm that’s a puzzle for lawyer Lori Roth, of Cassells Brocks who specializes in construction law.
“Really it is a communication just like a fax,” says Roth. “But it’s true that many contracts don’t consider it to be.”
When faxes first rose and became popular in the 1980s the notification clauses – which specifies what is a communication, what format it must be in and who it must be addressed to - were amended to include them as an acceptable form of communication.
Roth says she now advises clients to include e-mails since they’re more popular than faxes these days but warns it’s not the form of communication which really makes a difference should a dispute fester toward litigation – it’s how you manage it.
“I have a tool on my computer which allows me to file e-mails to specific case files,” she said. “I then back that up and even have hard copies of it.”
Construction industry clients are advised to take the same prudent steps, she said, because should things go south on a project the risk is likely to be a much bigger pain than the revenue column.
A popular tool emerging in the U.S. and to some extent in Canada is that of the ediscovery – the demand that a company search all it’s electronic documents and produce all files relevant to the dispute being litigated. Needless to say, it’s expensive, time consuming and can paralyze the operations of a small company.
A better plan, Roth says, is to track and archive all e-mails and documents by contract, back them up regularily and store them appropriately.
Then, if the need arises, the items can be retrieved and presented promptly.
“The rules of civil procedure (legal rules governing the process of litigation between parties) have been changed to recognize e-mail,” notes Roth.
As a result, in spelling out what constitutes a communication as having been “delivered” - such as a letter or fax – should also include e-mails, she said.
“They are in effect like the minutes of a meeting if the previous e-mails are on the document,” she said. “You can see the discussion and how it is resolved.”
That’s a good thing for all parties, she said, especially in the mission critical bubble of a construction project.
Documenting changes or redirection isn’t unique to the construction industry, however.
Almost every enterprise is wrestling with an ever increasing mountain of compliance regulation and corporate governance clauses which place greater onus on documenting who orders whom to do what and when in the event the outcome comes under government or court scrutiny.
Reacting to a string of accounting scandals and corporate malfeasance, recent legislation on both sides of the Canada-US border has set higher standards of accountability.
The U.S. Sarbanes-Oxley Act and Bill C-198 in Canada have made it imperative for companies to document their processes, decisions and statements and be prepared to locate them on demand in the event of lawsuits.
But archiving those tons of documents isn’t as simple as piling them into boxes and consigning them to the basement. Even in this digital age there are problems. Electronic media is notoriously unstable. CDs can scratch and oxidize; hard drives fail and technologies become obsolete - does anyone still have a 51/4-inch floppy drive?
That’s one reason the Hudson’s Bay Company, Canada’s oldest, keeps every credit card receipt as a hard-copy for seven years - filling a warehouse in Newmarket.
Meanwhile, the giant retailer finds electronic record-keeping, with its many formats and potential problems, too expensive and risky.
"The rules of civil procedure (legal rules governing the process of litigation between parties) have been changed to recognize e-mail."
Lori Roth
Cassells Brocks
In fact, the need for accessible, stable storage media is being met, somewhat ironically, by the current twist on microfilm, a 1928 technology updated with a digital interface.
A simplistic explanation is that electronic documents are “saved” as an image file, then “written” to 16 mm microfilm via a scanner-type interface. The film is processed chemically and stored, after being carefully audited and indexed for content.
The original digital documents are either stored or erased. Should a document be required, the film is located and the analogue image is transferred via a scanner to create a digital copy.
The full reality hasn’t sunk in yet, but it’s a responsibility companies large and small have to take seriously, said John Mancini, CEO of the Association for Information and Image Management (AIIM), an industry organization.
A survey last year of 800 companies sponsored by Xerox Global Services found despite new ediscovery rules which kicked in Dec. 2006, the message isn’t getting across.
“Many records management programs just cover the tip of the iceberg,” said Mancini. “As the survey pushed participants for more granularities with regards to their records and information management program, it became apparent that many end users have yet to address important elements in a truly comprehensive program.”
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