Legal
Issue No. 7 - October/November 2002
Business Records
Survival in the Paper Jungle
by Michael Hegarty
Despite the increased use of electronic data bases, the growth of information technology and the Internet, businesses continue to use paper. All of this paper forms a record of our dealings with others. Even when we use electronic communication we often make hard copies.
Whilst electronic records can be stored quite economically using floppy disks and CDs, storage of paper records requires space. Space is limited and costs dollars but we are obliged to keep these records for various reasons. It is not physically or commercially viable for any business to maintain all its records indefinitely. In most cases they are no longer needed once the matter has been dealt with, the service provided, or the account satisfied.
Numerous pieces of legislation impose obligations in relation to maintaining records. For example, the Privacy Act requires businesses to keep accurate information, to keep it securely, to update it regularly and to keep it confidential but to allow access to those entitled to see it. Conversely, the Act requires that organisations must not collect personal information unless it is necessary for one or more of its functions or activities, with the implication that some information if collected is to be destroyed or permanently de-identified if it is not required.
Some legislation requires that we keep particular documents for a number of years. In some circumstances this can be extreme; 30 years in the case of certain records dealing with exposure to asbestos for example. But not all records are required by law to be retained for any specified period of time and it is necessary for each business to determine how long its records should be retained.
As a rule of thumb most records should be retained for seven years where they relate to contracts or may provide information in respect of legal actions such as negligence claims. This period is considered appropriate because of the Limitation of Actions Act which states that actions...
