While advances in e-discovery technology are potentially game changing, so, too, are certain proposals for amendments to the Federal Rules of Civil Procedure, given the intense efforts toward reform throughout 2012. After nearly two and a half years of work, the federal Civil Rules Advisory Committee submitted a final proposal for a new federal sanctions rule for preservation failures to the Standing Committee on Rules of Practice and Procedure. The proposed revision to Federal Rule of Civil Procedure 37(e) seeks to limit the most serious sanctions for preservation failures–e.g., case-terminating sanctions, issue or evidence preclusion, and adverse inference instructions–to those instances where the court finds that the failure to preserve was willful or in bad faith, or that the failure to preserve “irreparably deprived a party of any meaningful opportunity to present a claim or defense.” The proposed rule also identifies several factors that a court should consider in determining whether a party failed to preserve discoverable information that reasonably should have been preserved, and whether the failure was willful or in bad faith. If adopted, the revised rule should help prevent the imposition of harsh sanctions for inadvertent preservation failures. The Committee is also considering an amendment to Rule 26(b)(1) that would introduce the concept of proportionality into the permissible scope of discovery.

International e-discovery and the need to deal with foreign data protection and privacy law is another increasingly important trend. Several years ago, the cross-border transfer and disclosure of information in response to civil litigation and governmental investigations occurred far less often than today. The world continues to grow smaller as a result of commercial globalization and new technologies, which often increase the geographical scope of data that is relevant to litigation and investigations in the U.S. At the same time, foreign data protection and privacy laws have become pervasive and foreign data protection authorities more active in their enforcement of such laws. To assist litigants in navigating the conflicts that often arise between foreign data protection laws and U.S. discovery obligations, The Sedona Conference® issued in late 2011 its International Principles on Discovery, Disclosure & Data Protection. In 2012, the European Union’s Article 29 Working Party–consisting of representatives of EU member state data protection authorities–responded favorably to the approach recommended in the International Principles.

Additionally, the European Commission in 2012 proposed replacing the 27 different data protection laws in each EU member state with a single data privacy regulation. The proposal includes provisions that companies likely will find appealing, such as only having to deal with one national data protection authority in the EU. Companies likely will find other proposed provisions less appealing, such as allowing individuals to require data controllers to delete all the individuals’ online data (referred to as “the right to be forgotten”), and applying the EU rules on companies outside of the EU if they offer goods or services within the EU. Cloud computing has been an increasingly significant technological development, and EU bodies in 2012 addressed some of the legal issues associated with it. The European Commission also issued a communication stating its intention to facilitate the faster adoption of cloud computing within the EU because of cloud computing’s potential to drastically reduce IT costs and to boost productivity, economic growth and jobs.

via Gibson Dunn – 2012 Year-End Electronic Discovery and Information Law Update.