Documents In Your “Possession, Custody or Control”: Discovery In The Cloud

When considering forensic discovery in relation to cloud computing, ponder this non-exhaustive list of issues canvassed recently by some legal eagles on Twitter:

• Who actually owns the digitised documents?
• To what extent has control of the subject documents been lost?
• Jurisdiction is certainly a live issue eg the Patriot Act & USA based servers
• The fact the documents are in the Cloud does not mean they are not under your control, if you can download them.
• If you can access the document, arguably you have sufficient control to produce it.
• There are probably all sorts of hidden copies and e-versions lurking on people’s computers and servers.
• Would the obligation to maintain financial records require retention of versions of documents?
• There may be all sorts of copies and embedded data over which you may not have control.
• Metadata is just another document, albeit hidden.

• Should firms be ‘scrubbing’ e-documents?
• Not if they are in any way related to taxation records!
• The Australian Taxation Office (ATO) would almost certainly view scrubbing as willful destruction.

• It could be a breach of confidence not to scrub some documents.
• s262A ITAA 1936 is drafted broadly “all records that explain transactions”
• “All” means all; Not some, not a few or a bit; ALL!!!
• Courts are reluctant to read down ATO powers too.
• Does the “cloud” have an obligation of confidence?
• How does that confidence obligation compare to the ATO recovery powers, which have been interpreted by the Courts to override confidence?

• Is a failure to “scrub” a breach of confidence or privilege?
• Do we have a duty to know which applies?

• What if the document has been provided to the other side?
• What are the implications of “scrubbing” such a document?
• Vigilance is required for Operating System changes. It may impact on the version of the document stored.
• “Scrubbing” is a double-edged sword. The document can be useful to corroborate a story when sued.
• Documents sitting on third party email servers need to be considered.
• Third parties may have a real interest in the subject documents. Their rights need to be considered before “scrubbing” or destruction is undertaken.
• If the “scrubber” is a 3rd party, he may be compelled to produce the subject documents.

(See Australia and New Zealand Banking Group Limited v Konza [2012] FCA 196 (9 March 2012) for the extent to which the ATO can compel production of documents)

This is by no means legal advice. However it is a suggestion to think carefully before venturing into the “cloud” for your document storage and any forensic discovery that may result from such a move.