Certain records are vital for your business. To know more about such records, speak to an experienced Heber City, Utah corporate lawyer.
A business owns sensitive and valuable records and information that are in need of protection from damage, loss, and unauthorized disclosure. Safeguarding such records can preserve rights under the law, fulfill legal and other obligations, and prevent losses. In the normal course of business, a company might be in possession of another party’s records and information, which must be treated in much the same way as the company’s own records. When certain business records are not properly protected, any loss or damage could result in legal actions, the inability to rightfully collect money due, loss of competitive advantages, or other consequences.

Vital records cannot be replaced easily, or are impossible to replace. They are necessary for business operations to continue with the least degree of financial loss or in convenience. They also are the records critical to the provision of products and services–the livelihood of a business. Without certain records, a company is incapable of accomplishing its intended activities and pursuing its interests.

In the strictest sense, vital records are the documents that preserve the legal status and existence of the organization, such as articles of incorporation, by-laws, minute books, stock certificates, and shareowner information. They also are records that protect and provide direct evidence of legal rights and privileges, assets, and incurred obligations.

Certain vital records substantiate important relationships between the company and others. They identify the rights and obligations of the company, employees and their dependents, stockholders and their heirs, clients or customers, creditors, suppliers, bondholders, the government, and the general public. Such vital records also ensure the capability to meet commitments and obligations to employees, customers, and others.
The records associated with critical business functions are usually considered vital records. Vital financial records include those that show the status of a company’s assets and liabilities. They provide evidence of ownership in the form of negotiable documents and records of property and fixed assets. They protect the equity of the owners and company obligations in the form of accounts payable, payroll, taxes, and other similar records.

Vital records are those required to substantiate a claim or payment. Records necessary to prevent income losses include sales agreements, receivables, and other documents required to recover monies due. They are also records and information critical to operations, manufacturing, research and development, provision of services, and other means of earning income.

Litigation Records

All relevant records must be collected, organized, and maintained so that they are readily accessible throughout the course of a proceeding. Among these litigation records are:

• pleadings (the plaintiff’s complaint and the defendant’s answer or counterclaim)
• company records for review in case preparation
• written objections to the court for a protective order or to limit discovery
• documents produced by both parties in discovery and records to track document production
• sworn depositions of witnesses
• interrogatories and answers
• physical examinations
• trial briefs, transcripts, and other records

More often than not, an opposing party will attempt to include a broad statement of records covered in the hope of getting additional useful information. A business may request clarification when a subpoena is too broad in scope, and a court may then narrow the scope or clarify the types of information covered in order to reduce unnecessary hardships and to prevent one party from uncontrolled rummaging around in the records of another party.

A good records program helps reduce excessive disruption of normal business activities by:

• routine records destruction according to a retention schedule
• organization of the remaining records for their timely retrieval and production at the lowest costs
• prevention of unnecessary losses caused by the inability to find key documents

A records management computer system can be especially useful for timely and accurate records retrieval.

Document Hold

A legal, investigative, or tax hold on records is a procedure to suspend destruction of records related to foreseeable or pending litigation or government investigation. Even if no legal requirements exist to create or maintain a record, that record cannot be destroyed within established, routine records destruction procedures.

Irresponsible destruction of records related to a legal action greatly increases the risk of being forced to settle a claim or of other losses in the proceedings. Any indication at all of an existing action or one looming in the future is a signal to cease document destruction, or the violating party may be subject to charges of obstruction of justice. An adverse inference may arise if a party proceeds with records destruction when it knows–or should have known–the documents are relevant to an action. It also is illegal to knowingly permit record destruction by others or to advise their destruction.

To reduce the risks of loss or alteration–unintentional or otherwise– many businesses remove the relevant original records to a secured location, leaving duplicate copies in their place for normal business use. Additional security procedures may be implemented as appropriate.

Document Production

Failure to produce records required by a subpoena may result in court charges and penalties such as:
• obstruction of justice or contempt of court
• sanctions imposed by the court
• adverse inferences that may be harmful to the violating party
When the court believes that a company has intentionally withheld evidence, the court could rule in favor of the opposing party.

A subpoena duces tecum, the order to appear and produce documents, may be for a proceeding to which the recipient may or may not be a party. It is best to refer any subpoena to legal counsel for the appropriate response as soon as it is served or received. Corporate attorneys and outside counsel may turn to one of a handful of litigation support firms across the country for case management services. To avoid expensive and disruptive changes as the case proceeds, it is best to decide up front which activities will be handled by in-house legal staff, outside counsel, or a litigation support services firm.

Unless a subpoena specifically states that records are for use outside the office, it is preferable to furnish the records for on-site examination. Copies should be prepared that show only such detail as is specifically requested. Documentation regarding the summons and what information was furnished should be maintained in the event this information is needed later.

An effort must be made to produce documents in a timely and organized fashion for an opposing party in litigation. All relevant records must be collected, organized, and maintained so that they are readily accessible throughout the course of a proceeding. Among these litigation records are:

• pleadings (the plaintiff’s complaint and the defendant’s answer or counterclaim)
• company records for review in case preparation
• written objections to the court for a protective order or to limit discovery
• documents produced by both parties in discovery and records to track document production
• sworn depositions of witnesses
• interrogatories and answers
• physical examinations
• trial briefs, transcripts, and other records

More often than not, an opposing party will attempt to include a broad statement of records covered in the hope of getting additional useful information. A business may request clarification when a subpoena is too broad in scope, and a court may then narrow the scope or clarify the types of information covered in order to reduce unnecessary hardships and to prevent one party from uncontrolled rummaging around in the records of another party.

Litigation Support

A good records program helps reduce excessive disruption of normal business activities by:
• routine records destruction according to a retention schedule
• organization of the remaining records for their timely retrieval and production at the lowest costs
• prevention of unnecessary losses caused by the inability to find key documents

A records management computer system can be especially useful for timely and accurate records retrieval.

The need for conscientious record-keeping practices is greater in a company with a higher dependence on its information systems and intellectual properties, and in a business with a higher probability of government investigation or litigation. An experienced corporate lawyer can establish criteria for what record-keeping requirements may be reasonably followed and what practices would create an exceptional burden.

• What records truly merit protection because of their content and value?
• What are the risks if the information is available, if it is not available, or if it falls into the wrong hands?
• What is the likelihood of litigation or investigation, and for how long?
• Will there be sufficient evidence for a defense or to file a claim?

Importance of records protection

Every business has records that are essential to its operations and to its very existence. In today’s highly competitive environment, it is critical that a company be able to continue operations throughout an emergency situation, and be able to resume critical business functions in an orderly and timely manner after a manmade or natural disaster. Action taken to preserve the ability to continue business operations could prove to be a company’s salvation in the event of a disaster.

The importance of records protection is most fully understood and appreciated by those who have experienced losses from a fire, tornado, earthquake, or computer disaster. Disaster victims, more capable of clearly visualizing the real and potential losses from these unexpected emergencies, have faced the difficult task of producing the documentation necessary to receive public and private relief.

There are ethical and legal obligations to maintain the viability of a business. An experienced Heber City Utah Corporate Lawyer can explain the legal obligations to you. It is good business sense to have an emergency plan for protection of records that document legal identity, rights, and obligations. Aside from the simple motive to stay in business, outside pressures from shareholders, regulatory agencies, insurance carriers, and accounting firms may compel development of a disaster plan.

Sealing of Records

Certain records of the company can be accessed by the public from regulatory authorities. You can seal such records so that they are no longer available to the public. Speak to an experienced Heber City corporate lawyer to know how your business can seal corporate records. A business will need to show good cause before court records are sealed. Requests to seal court documents are routinely approved as long as both parties agree. A judge reserves the right to consider the public interest in the determination of whether to seal court proceedings and documents. Records generally not sealed are those considered to be of public interest, including those dealing with possible health, environmental, and other public hazards. A movement is afoot in a number of states to make it more difficult to seal court records and settlements, especially in product liability and other civil damage suits.

Intellectual Property Rights

An experienced Heber City Utah corporate lawyer can help you protect the intellectual property rights of your business. Intellectual property rights are valuable business assets. Protection for certain types of proprietary information is provided under the law in the form of trade secret, patent, copyright, trademark, and service mark statutes. A patent is a tangible asset in that patent laws grant a seventeen-year, exclusive fight to make, use, and sell a new and useful design, process, machine, manufactured item or other composition, or any new and useful improvement on it. Copyright law protects an exclusive right to print, sell, and exhibit written materials, musical compositions, art works, photos, movies, television programs, software, data systems, and other creations placed in a tangible medium of expression. Employees who leave a company to work for the competition or to set up their own competing business also may be an information security risk. Competitors have been known to lure away key personnel expressly for the purpose of obtaining marketing plans or customer lists.

Occasionally, an employee unwittingly takes records and knowledge to the competitor when unaware of their proprietary nature. Or a worker might go to the competition to spite an employer, with or without an intention to disclose proprietary information or engage in illegal or unethical activities. Both insiders and outsiders may pose information security risks through criminal, malicious, or mischievous actions.

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