New legal rules come into force today that could oblige US companies to spend more money preserving electronic information such as e-mail, potentially increasing the costs of litigation and changing the balance of power between plaintiffs and corporate defendants.

The problem of how to treat electronic documents, which constitute the bulk of information involved in corporate litigation, has perplexed federal courts for years. But now the US Supreme Court has approved amendments to the federal rules of civil procedure, on the retention and production of electronic information in federal courts.

The new rules apply to all companies involved in federal litigation, including foreign companies from the European Union and elsewhere that may be subject to conflicting data laws in their home countries.

The rules will force lawyers to focus on discovery - the already costly production of information in a US lawsuit - much earlier than in the pre-digital age. Parties to a lawsuit will be required to meet early on to negotiate what information must be produced by both sides.

But on the question of how data should be preserved and produced, and who should bear the cost, the rules give no clear answers. There are no hard rules, for example, on how often companies can recycle the tapes they use to back up information on corporate servers, without risking court sanctions if they are later required to produce the information. It is not clear at what point companies need to start saving information when they think they might face a lawsuit.

The cost of storing electronic information can be high, especially if it involves restoring back-up tapes or sifting through information that is not easily searchable. Even more costly is paying lawyers to review documents to ensure no data covered by attorney-client privilege are inadvertently revealed.