Internet communication is a fast, efficient and effective form of business communication. However, from a legal standpoint, each such communication creates a document which is subject to the rules of production in litigation, making it a possible litigation disaster.

The e-mail format encourages "relaxed" content and disclosure of information that parties would not set forth in a more formal written report.* In addition, e-mail begets additional e-mail -- usually exponentially where numerous e-mail recipients are copied on one communication -- increasing the probability that a "smoking gun" admission will be disclosed if litigation ensues, and increasing the costs of litigation because of the sheer volume of e-mail documentation that must be produced, reviewed and analyzed by counsel.

Even when e-mail has been "deleted," it never really vanishes. It can be reproduced through backup copies maintained on network tapes; found on the e-mail recipient’s computer system or; located on an intermediate administrator’s system through which the message may pass. Courts have even ordered parties to produce responsive "deleted" e-mails that exist on optical disks, active servers or backup tapes through expensive imaging of hard drives. Zubulake v. UBS Warburg LLC, 2003 U.S. Dist. LEXIS 7939 (S.D.N.Y. 2003). This substantially increases the cost of litigation, because parties are forced to pay for expensive imaging services, and attorneys must spend countless hours reviewing voluminous amounts of documentation.

Text messaging devices such as Blackberrys are not immune either. Where businesses necessarily rely on the use of Blackberrys, those hard documents which are created through Blackberry communication must also be produced and, therefore, carefully reviewed by attorneys. In fact, the Court may order the Blackberry itself to be produced in certain instances, further driving up the cost of litigation where attorneys must review all contents contained on the Blackberrys themselves.

As a consequence, the use of internet communication should be carefully monitored to avoid: (i) the disclosure of confidential business information; (ii) the waiver of an attorney-client or work product privilege if the e-mail is forwarded to an individual outside of the company through the simple click of a "reply to all" or "forward" button; (iii) the forfeiture of trade secret protection; and (iv) the disclosure of e-mails containing inappropriate jokes or comments concerning the true nature of a transaction which would have to be explained -- usually without success -- during a hostile judicial proceeding. For instance, in Eolas Technologies Inc. v. Microsoft Corporation, 2002 U.S. Dist. LEXIS 20285 (N.D. Ill. 2002), Microsoft was ordered to produce e-mail documents referenced in an e-mail chain which had previously been redacted - - and Bill Gates was confronted with the contents contained in those many e-mails.

To minimize litigation risks associated with internet communication, employers should implement policies including, but not limited to:

• educating users that e-mail creates a permanent document that can be retrieved even if "deleted";
• establishing protocol which minimizes the broadcast potential of e-mail to reduce the possibility that privilege may be waived through dissemination of confidential information outside of the firm;
• creating a cautionary statement and misdelivery instructions on all e-mail that specifies that the message is confidential and privileged, to prevent unintentional waiver of privileged communications (in determining waiver, courts will consider the reasonableness of the precautions taken, such as cautionary statements, to prevent inadvertent disclosure of communications. Local 851 of the Int'l Bhd. of Teamsters v. Kuehne & Nagel Air Frieght Inc., 36 F. Supp. 2d 127 (E.D.N.Y. 1998)); and
• establishing and enforcing company policy that inappropriate e-mail content will not be tolerated to reduce the potential embarrassing situation of having to explain such communications before a court.

By educating management and employees that e-mail is just as discoverable as formal documentation and is now routinely sought after in litigation and implementing measures which limit the broadcast potential of e-mail, you can use the internet with reduced peril of waiving privileges and trade secrets, or facing potential litigation pitfalls in the form of "smoking gun" internet communications.

* For an interesting anecdote on the perils of disclosing information via e-mail, go to www.nylawyer.com/news/03/06/062003b.html.