The Legal Status Of Computer Records

THE LEGAL STATUS OF COMPUTER RECORDS

'If I become involved in a court case, will the court accept my computer records, or will I have to produce the original paper to substantiate my position?'

This question concerns many agents today, so ACORD asked the law firm of Steptoe & Johnson to prepare a legal opinion on the admissibility of computer records in court. Here is what they reported.

Because computer systems are used everywhere in our economy today, and because businesses rely on the accuracy of their computerized records, the courts have been persuaded that computer records are trustworthy. Therefore, like paper records, computer records are routinely admitted as evidence.

Generally speaking, federal and state courts agree on the overall standards governing the admissibility of computerized business records. The courts have been concerned primarily with the accuracy of procedures for input and processing, since this is where human error may creep in. Therefore, proof of database quality-control procedures is the single most important factor in admitting computer records into evidence. The courts have not regarded system security-measures to prevent unauthorized tampering with records-as a significant factor, unless an opponent comes forward with evidence that there actually has been tampering.

In most jurisdictions, computer printouts will be admissible if the witness presenting them has sufficient knowledge to testify about the general contents, nature, and use of the record or type of record. The courts don't require that the witness be a computer expert, or even someone who was personally involved in entering the information into the system. It's sufficient if the witness has direct familiarity with the type of record involved and the procedures for recording and processing the information.

The most important step in ensuring the admissibility of your computer records is to have written procedures and policies that your employees follow in creating the records. If litigation ever ensues, these written procedures are contemporaneous evidence of the accuracy and reliability of your computer records.

Written Procedures

• The agency should have written procedures for all insurance transactions and accounting transactions.
• Adherence to standard procedures should be a factor in performance appraisals of staff members.
• The agency should have written procedures for data verification, including:

• Random spot checks of data input -- Person responsible: Supervisor
• Regular audits of the database for accuracy of insurance information -- Person responsible: Operations Manager or Department Manager
• Regular use of 'de-garbage' reports to identify bad data -- Person responsible: Automation Manager or Agency Principal

• Adherence to verification procedures should be a factor in performance appraisal of managers and supervisors.

The Data Input Person

• The competence of the person who entered the data should be ensured by the agency's hiring policy and in-agency training programs.
• Accurate input of information should be a measure of job performance and a factor in performance appraisal.
• The data input person must have had personal knowledge of the transaction or received the information from someone with such knowledge-for example, a CSA who deals with customers or a CSA who receives information from a producer.

Validity of the Records

• The records must have been created in the ordinary course of business, for business purposes.
• The records must have been created at or near the time of the event recorded.
• The agency must show that it relies on the accuracy of the computer records.

The Witness

• The witness must understand the operation of the agency and the computer.
• The witness must be able to testify that standard procedures were followed in creating and verifying the records.
• The witness must be able to testify as to the competence of the staff.
• The witness must be able to testify that the agency relies on the accuracy of the computer records.