Imagine that your architectural, engineering, or construction firm just finished a project that generated thousands of documents including contracts, drawings, specifications, memoranda, emails, calculations, requests for information, and change orders. Now, you’re faced with a number of questions:
What do you do with this mountain of information?
How long should you keep it?
How should it be stored?
What documents do you need to keep?
How do you deal with emails and other electronic documents?
There is no one right answer, but it is important to come up with a document retention policy and stick to it.
Look at your contract to determine whether you are obligated to retain certain documents. If so, you must comply with those provisions. However, many contracts are silent about document retention. For example, the 2007 AIA-B101 contract has no provision concerning document retention requirements.
So, if your firm is not required to keep project documents – why keep them? The answer is succinct: liability. Your firm should retain project records because it may need them to defend against claims long after the project is completed. As a practical matter, your firm’s defense will largely rest on its ability to produce records about what actually occurred, especially if the claim occurs many years after project completion and witnesses’ recollections of the project have faded.
Many states offer some protection to architects, engineers, and contractors against stale claims by way of statutes of repose, which set time limits under which a claim may be brought for construction projects. The length of the statute of repose may vary from state to state. In South Carolina, the statute of repose is eight years after substantial completion. The NSPE and AIA both recommend maintaining contracts, reports, calculations, and final construction documents (including final drawings and specifications, submittals, responses, logs, and observation reports) for a minimum period of three years beyond the applicable statute of repose. This recommendation ensures a margin of safety beyond the statute of repose, but does not require indefinite retention.
However, knowing how long to keep project documents is only part of the issue. You must also decide how to retain the project documents and what to keep. It is ideal to retain an electronic copy of your paper files. A 2016 NSPE/ACEC joint white paper on document retention guidelines indicates that paper files “can also be scanned and filed in an electronic format. The format should not allow further manipulation of data.” Before destroying any hard copy files, you should verify that key documents are accounted for, and ensure that they are stored in a proper format (such as PDF files).
What documents should you keep? Design and construction firms do not have to keep all project documents, and should be aware that all existing documents will be subject to discovery in the event of litigation. Of special concern are informal communications, working drafts, interim submittal drawings and other similar documents that may not reflect the final work product. These documents may contain incomplete or wrong information, poorly considered impressions, or provocative remarks about a client or project. They may raise questions about the quality of work performed. Final project documents that were issued to others during the course of the project are essential for your records. Internal documents and drafts need not be maintained.
Develop and enforce a company-wide record retention policy that clearly states what type of records are to be retained, sets out schedules and methods for record destruction, and how and where records are stored. The goal is to preserve an accurate record of the project. Some suggestions:
- Put your record retention policy in writing. Communicate the policy to all employees and ensure that it is followed by making periodic reviews of closed project files.
- Inform your clients about your policy.
- Clearly identify what documents will be retained.
- Schedule working documents, early drafts, and informal notes for destruction soon after the project completion date.
- Ensure that employees aggressively abide by company policies relating to emails, which can be purged after a relatively short period of time.
- Do not allow employees to archive company records offsite.
- Do not allow terminated employees to keep company records after they depart.
- Make sure your project documents are well-organized and easily accessible.
- Archive electronically saved documents on an appropriate storage medium and keep a backup.
- Suspend the destruction of records for a project in the event of a possible, pending or ongoing litigation. Continuing to destroy project documents under threat of litigation will likely be interpreted as an attempt to destroy evidence.
- Make sure your record retention plan is consistently applied from project to project.
It is a good practice to develop stringent company policies relating to emails to ensure that all important project communications are captured and stored. A few suggestions for consideration:
- Consider requiring all business emails to be sent from and addressed to employees’ company email addresses.
- Discourage the use of personal email accounts for business use.
- Prohibit the use of social media and text messaging for transmitting project communications other than routine communications, such as scheduling meetings or confirming appointments.
- Require employees to copy or forward important incoming and outgoing emails to the project file. If emails contain web-based links, such as Dropbox or Sharefile, ensure that the content in these files is downloaded to the project file.
- Encourage employees to use a common identifier or name in electronic correspondence to facilitate proper cataloging and capture of information.
- At a project’s conclusion, work with project or IT personnel to scan electronic files by keyword terms to screen and capture important emails that are not already in the project files.
However, just having a policy is not enough. Your firm must ensure that everyone at the firm understands it and follows it as matter of course. Any destruction of records must be routine and in good faith. This will protect your firm, since courts have shown that they are willing to accept a firm’s explanation that records were destroyed in accordance with company policy if the company can show that policy was consistently implemented.
If you implement a document retention policy, follow it. If there is a valid reason to deviate from the policy for a particular project, make sure this reason is documented.
If you have any questions about document retention or email policies, we would be glad to help you. The attorneys of Gibbes Burton are passionate about helping professionals and businesses to minimize risk and build success.