03 September 2014, by Jeremiah Rais, Officer, PII and Risk Management Department
The Retention and Destruction of Closed Files
With the Personal Data Protection Act 2010 (“the PDPA”) having come into force on 15 November 2013, law firms are all the more obliged to take practical steps in preventing any “unauthorised or accidental access or disclosure, alteration or destruction” of their client’s files.
[1] As such, law firms should tailor their file retention and destruction policies to not only suit their needs, but to also comply with the law.
In order to decide on a file retention policy, a law firm is to consider amongst other things, the statutory requirements and the areas of law practiced by the firm. While there are no rules set in stone to dictate how long closed files should be retained or when they are to be destroyed, lawyers should refer to Rules and Ruling of the Bar Council, in particular Rule 18.01 as a minimum guideline for the retention and destruction of files.
Ruling 18.01: Guidelines for Disposal of Files
There is no hard and fast rule governing the period for retention of files by Solicitors before destruction. However, the Bar Council recommend the following guidelines:
(a) Conveyancing files: 12 years;
(b) Litigation:
(i) General litigation: 6 years;
(ii) Unenforced judgment: 12 years from date of judgment;
(c) Probate and administration: 12 years;
(d) Family matters: 6 years;
(e) General matters: 6 years. |
File Review
Lawyers must be reminded that not all closed files need to be retained permanently – retention of files will incur costs, require space and may even contravene the PDPA.
[2] It is to be noted that the PDPA also obliges a lawyer to take reasonable steps in ensuring that personal data is destroyed if they are no longer required.
[3] Any indefinite retention of closed files must be out of necessity and is best kept to a minimum. Even then, lawyers should consider storing soft copies instead of physical files to save up on space.
It is good practice to review closed files periodically to uncover changes in circumstance that would permit its destruction. A checklist detailing the original documents on file, necessary actions required, retention period, review dates and the person responsible for the file will help facilitate the review process. Among the things that a lawyer should consider when reviewing a file for disposal:
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If all statutory, regulatory and financial requirements are complied with (the PDPA, Limitation Act 1953, Inland Revenue Board Malaysia Public Rulings etc);
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If the judgement has been satisfied;
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If there has been a discharge by the client or withdrawal from representation;
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Whether all outstanding fees associated with the file have been discharged.
Client Consent
A destruction date can be determined once a lawyer has exercised his professional discretion and is satisfied that a file can be destroyed.
[4] Ideally, the client should be informed of the file’s pending destruction at least three months before the destruction date. The client can be informed by way of a letter that:
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informs the client of the file’s pending destruction;
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gives the client the option to retain the file personally;
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requests the client’s written consent for any action that the firm will take.
If a client elects to retain the file, the entire original file is to be sent to the client. On the other hand, if consent is given for the file’s destruction, the lawyer is to inspect the file for any original documents (title deeds, books of accounts, copyright and trademark registrations etc) and return the same to the client.
The lawyer must give the final approval for a file’s destruction as he or she will be aware of any actions required to be taken beforehand and if all legal/professional obligations have been satisfied. The lawyer responsible for the disposal of the file must sign off a destruction authorisation form which is then to be retained permanently with the client’s written consent.
* Remember: retain firm's letter to the client together with the client's written consent/acknowledgment and destruction authorisation form.
Destruction Method
It is of utmost importance that the lawyer bears the brunt of responsibility in ensuring the safe disposition of the file while maintaining client confidentiality. A lawyer needs to ensure that the files are completely destroyed beyond reconstruction and/or recovery.
For paper files, destruction may be accomplished by shredding, pulping or even a combination of both. There is no reason to prevent a similar destruction of electronic records. Files hosted on “cloud storage” can be permanently deleted while hard drives can either be physically destroyed or degaussed to remove any files stored on them.
Whatever the case may be, the person destroying the files – whether internal, or a third party service provider – should note on the authorisation form the client’s name, the lawyer authorising destruction, a description of the matter, file number and the date/location of destruction. This will help safeguard the lawyer against any allegations of indiscriminate file destruction.
Once file destruction is completed, it should be recorded onto a master list of retained and disposed files. Since anything entrusted to a single person may go missing, it is critical that this record is maintained to enable the tracking of files should there be changes in personnel at your law firm!
Reference:
[1] Refer Section 9(1) Personal Data Protection Act 2010.
[2] Refer Section 10(1) Personal Data Protection Act 2010.
[3] Refer Section 10(2) Personal Data Protection Act 2010.
[4] The Law Society of Upper Canada, ‘Guide to Retention and Destruction of Closed Client Files for Lawyers’ <http://www.lsuc.on.ca/WorkArea/DownloadAsset.aspx?id=2147491048> accessed 7 August 2014.
Updated: 16 Dec 2014