Litigation readiness planning within banking and finance



Litigation readiness planning (LRP) involves the strategic development of best practices and operating procedures to facilitate the control of an organisation’s electronically stored data (ESI) and potential evidence. Organisations need entrenched and secure processes to meet preservation, collection and production responsibilities. Effective litigation readiness improves response times, reduces disruptions to your business and reduces the impact that e-disclosure has on the final costs of litigation. Litigation readiness also improves the overall discovery process and lowers the risk of evidence tampering. There are three key factors that lead to an inflated risk of litigation with banking and finance, and listed below are the ways in which LRP can mitigate against this.

The global trend of increased enforcement activity in the financial services sector associated with the failure to maintain adequate internal controls was largely caused by the accounting scandals of the early 2000s and then amplified by the 2008 financial crisis. Recent colossal regulatory sanctions in the US and elsewhere have again drawn attention to compliance risks. Finance and banking has over half a dozen regulatory bodies conducting regular checks and balances. These can escalate to larger scale investigations which often result in one of two things: raids or government mandated compensation plans. Both require financial institutions to identify and review the ESI relevant to the matter. LRP can streamline this process as well as inform on the best practice for collating and providing data to regulatory bodies. Often those under investigation will, in an attempt to show compliance and cooperation, hand over far more of their data than is obligatory. LRP outlines what must be disclosed and what you are able to legally withhold, as well as govern data to make it easily accessible. During a raid, if anything can be done to decrease the time a forensic team needs then it will lessen the impact on the business in both the short and long term.

Money is a highly contended commodity. No matter which side of the coin you sit on, where money is concerned you will always find disputes, arguments and discrepancies. The finance industry therefore naturally attracts litigants. This, paired with a government compensation scheme can lead to vast numbers of claims being lodged within a short period of time. LRP ask questions that allow strict, best practice protocols to be set up internally so that any person tasked with responding to such claims knows how to proceed. This can increase the chances of being able to settle the matter outside of the court process or lodging a detailed defence that puts the company’s best foot forward.

Banking and finance has, quite rightly, embraced technology whole heartedly. This has led to enhanced user experience, innovative work habits and efficient business processes that provide a range of benefits. With the swift growth and now global customer usage of digital channels for banking transactions and advice, as well as the digitisation and storage of client details in general, financial organisations now find themselves directly exposed to the risk of disputes arising from the collection and preservation of ‘Big Data’ and customer expectations of privacy. The effective governing of data through LRP aggressively uncovers the weaknesses attributed to these developments in technology and teaches an internal web of ‘first responders’ how to react should a breach take place. This saves valuable time, ensures immediate action is taken to resolve the breach and identifies what data has been compromised in order execute a damage limitation plan.


Lydia Hawthorn is an e-disclosure consultant at CYFOR. She can be contacted on +44 (0)161 797 8123 or by email:

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Lydia Hawthorn


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