As a business owner, you cannot afford to spend your days in fear of being sued or subpoenaed. You need to get on with running your company.
That does not mean you can avoid the possibility of being sued, however. A lawsuit can rear its ugly head when you least suspect it, just as it does to many business owners each year. Taking a few steps now can make a huge difference with the protection of your company and its assets. One step is implementing a document preservation policy.
Documentation is crucial in legal actions
When a case goes to court, you cannot just tell your version of events. You need to have evidence that supports your position. Some of the best evidence you have comes in the form of paper documents and written records of conversations.
Even more significantly, if crucial documents are misplaced or destroyed, you can be accused of hiding or destroying them. Even if the records were accidently misplaced, the court is free to interpret the missing evidence in a light most favorable to your opposition. If the court believes that your company was negligent or acted deliberately, you could even face fines and other penalties.
How do you preserve documents for future litigation?
The law requires you to keep certain documentation for specific amounts of time. For example, the IRS requires you to retain your tax returns for between three to seven years. Some business documents should be kept indefinitely, whereas others need not be kept at all.
Together with your legal counsel, you should create a specific plan for document retention and a process to respond to “triggering” events that could indicate a lawsuit is coming. Your plan should include how access to important documents will be restricted, who will actually have access and who has the responsibility for preservation.
Nowadays many of the important conversations happen in the virtual world via emails or text messages. You may also use online documents with E-signatures rather than paper ones signed by hand. Cloud services make storing them simple and cheap, yet you need to take steps to prevent someone from accidentally or maliciously deleting them. Review your online storage terms so that you understand how long documents are saved, should be saved and how secure they are. Backup options should be researched as well
Learning more about this and other options to protect your company in case of lawsuits or subpoenas frees you up to concentrate on your business. It also avoids needless fines or punishments if you cannot produce documentation that you are still obligated to have in your possession. We help businesses who are looking to protect their assets and avoid the risk of liability.