Call for national data retention laws in Australia

Australian companies are more likely to settle legal disputes out of court simply because the cost of finding documents outweighs the settlement cost, but lawyers win either way.

ASX-One Australia managing director, David Thompson, said Australia needs a federal approach to document retention and monitoring of electronic documents, particularly e-mail, which is regarded as the worst offender.

"With states continuing to introduce their own legislation, it will become a nightmare for national companies to be compliant," he said.

Victoria is set to introduce the Document Destruction Bill which makes it a criminal offense to intentionally destroy documents to prevent evidence being used in court, while NSW has introduced the Workplace Surveillance Act.

"These are both new, state-based laws, which is why we need a national approach," he said adding most companies don't even have e-mail retention policies.

While some e-mails do have to be legally retained, Thompson said back-ups don't always work.

"If a legal discovery order arrives, you usually have only days or at the most, weeks, to deliver those documents. There wouldn't be too many companies in Australia that could produce a specific e-mail from seven years ago in a few days if they were relying on backups," he said pointing out that in the US companies spent $US1.2 billion this year on e-discovery services.

Blake, Cassels and Graydon partner Sunny Handa said a data retention and retrieval plan is critical for effective compliance.

He pointed to Sarbanes-Oxley as one example of compliance which requires public companies to store data and retrieve it at any time.