By Cedric Boltman, Channel Executive at Jasco Group

Company board members and managers have a fiduciary responsibility to their organisation to evaluate and manage risk. For the most part, this is done effectively, however, the risks associated with contract security, particularly those that are undocumented, can often be overlooked.

Many binding contracts today are conducted verbally, over a telephone. However, when it comes to disputes, how secure are these contracts, and how well do they hold up in court? To avoid the costly and potentially ruinous ramifications of inadmissible evidence, companies have to ensure that they invest in an interaction recording solution that will stand up in court.

The risk

A loss in court resulting from a dispute over contractual obligations or alleged misinformation has the potential to completely ruin a business. The financial impact on its own can be huge and could entail financial settlement, monetary fines and legal fees. The Consumer Protection Act provides that an organisation can be fined up to ten percent of its annual turnover, in addition to damages paid to the claimant, for goods or services proven to be marketed in a false or misleading manner. Financial losses could exceed millions of Rands, and could potentially bring a company to its knees in these tough economic times.

Beyond the financial implications, organisations can be harmed in other ways which negatively impact their ability to be a going concern. Cases where organisations lose to individuals are often highly publicised, leaving their reputation in tatters, with customers and partners fast abandoning what they deem to be a sinking ship. Trust is a vital component of a successful enterprise, the loss of which can be crippling.

In some instances, such as with the pending Protection of Personal Information (PoPI) Act, individual company owners, board members and managers could be held personally liable for financial damages, and may even be criminally charged.

In many cases, the damage is irreversible and the organisation does not recover. Companies - and their incumbents - simply cannot afford to take the risk.

The legal requirements

Due to the nature of technological evolution, it is incredibly easy to tamper with - and alter - auditory evidence. For this reason, using a recording as evidence in a legal matter is often viewed with suspicion, and the court has defined a list of stringent criteria to be met in order for a recording to pass muster.

A recording has to be proven irrefutably as original, authentic and untampered with to be legally compliant. Over and above verified authenticity, the recording must give evidence that at least one of the recorded parties has been made aware that the interaction is being recorded.

Managing the risk

To prove that a recording is bona fide and, therefore, useable in court, it needs to show traceable confirmation of the manner in which the recording was handled. There are very specific security measures built into reputable interaction recording systems that point to a recording's authenticity and ensure that it holds water under the scrutiny of the law.

Board members and management need to carefully interrogate their interaction recording system to ensure that it meets all the legal criteria, to protect their company as well as themselves. They need to be asking the following of those responsible for selecting their interaction recording solution provider:

·         Does the provider have a proven track record of participation in legal matters, i.e. testifying in court matters as an interaction recording expert?

·         Does the interaction recording system have a record of successfully standing up to scrutiny as evidence in court?

·         Does the solution provider have any white papers or other documented proof of meeting legal criteria?

·         Is the solution - and provider - compliant with the regulations and standards to which the organisation adheres, and can they provide a supporting statement to that effect?

·         Is the solution aligned to business processes and policies?

·         What are the internal, regulatory and legal requirements for recording retention, and does the system meet these?

·         Is retention automated, or does this require human, manual intervention? If the latter, the organisation needs to ensure that this process is strictly followed in order to remain compliant.

Interaction recording should not merely be a tick-box exercise, but a carefully selected technology that mitigates business risk. A system that does not measure up will let you down, and the onus to ensure this does not happen sits with the top-level executives.