Phoenix--Insurers making plans to avert the legal perilsinvolved with electronic documents and correspondence shouldinclude employee training on the destructive power of what theywrite, an expert advised.

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"Educate people that their e-mails can ruin things for them andtheir company. It's the casual statements with colorfullanguage--these are the things that will get you," cautionedattorney Jon A. Neiditz.

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Mr. Neiditz, an attorney with Lord Bissell Brook, made hiscomments at a Saturday seminar here, at the mid-winter meeting ofthe National Association of Professional Surplus Lines Offices,Ltd.

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His briefing on electronic document management and security andcontrol of e-mail risks outlined a variety of legal hazardscompanies face and various methods of coping.

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Mr. Neiditz began with a quote from a prosecutor in the officeof New York Attorney General Eliot Spitzer, to the effect thate-mail discovery has become a more potent weapon for a lawyer thancross examination.

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To stress the need for good management of e-mail and electronicrecords, he noted verdicts this year of $29 million against UBSWarburg in a sex discrimination case based on e-mail evidence and$1.45 billion against Morgan Stanley in a commercial dispute basedon computer backup tapes discovered in a closet.

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He also cited data showing that in cases where companiesnotified customers of data leakage, 20 percent of their customerswere lost.

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Mr. Neiditz counseled that companies need record managementprograms in place that give them easy search capacity "to be ableto confidently respond to subpoenas." While record storage costshave been decreasing, search costs are soaring, he noted.

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Firms should make sure their record storage does not include aphoto system that cannot be automatically searched or requiresmanual review, he said.

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On the e-mail front, Mr. Neiditz advised that technology isavailable that can stop mailings with certain words and alertemployees if there is a problem with a pop-up message on theirscreen. Larger insurers, he said, are moving in this direction.

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Other programs in use perform "intelligent surveillance" ofe-mails. In fact, many companies, to emphasize the importance ofe-mail communication, give a detailed notice to their employees ofthis activity, he said.

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To stop data leakages, he noted, a simple step is to make sureemployee laptops do not contain data that would require customernotifications in the event of loss or theft.

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In planning for electronic data process, companies deal withenterprise content management firms, archiving companies and policymanagement companies. Mr. Neiditz said organizations should clarifywith such firms just what sort of document recovery plans theyenvision. They also should outline a plan for the company, if itmust respond to a request for legal discovery of documents.

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"Get a strong document creation policy in place and stop e-mailsthat will do you in," he warned.

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