Legal Definitions - business records exception

The business records exception is a rule in legal proceedings that allows certain documents created by organizations to be presented as evidence in court, even though they would normally be considered "hearsay." Hearsay refers to an out-of-court statement offered in court to prove the truth of the matter asserted, and it is generally not allowed because the person who made the statement isn't available for cross-examination. This exception recognizes that records kept in the ordinary course of an organization's activities are often reliable and necessary for understanding past events.

For a record to qualify under this exception, it must meet several key conditions:

• It must have been made at or near the time of the event it describes, by someone with direct knowledge of that event, or from information transmitted by such a person.
• The person who created the record must have done so as part of their regular job duties within the organization.
• The record must have been kept in the regular course of a regularly conducted organizational activity. This means it's a standard practice, not something created just for a lawsuit.
• The organization must typically keep such records as a routine practice.
• The circumstances surrounding the creation of the record must indicate its trustworthiness. Courts will look for reasons to doubt its reliability, especially if it appears to have been made in anticipation of litigation or seems self-serving.

This exception applies broadly to records from various types of organizations, including for-profit businesses, non-profits, hospitals, and educational institutions.

Examples of the Business Records Exception:

1. Manufacturing Quality Control Logs

Imagine a dispute between a furniture manufacturer and a shipping company over a damaged shipment. The manufacturer wants to prove the furniture was in perfect condition when it left their factory. They could introduce their daily Quality Control Inspection Logs. These logs are routinely filled out by quality control technicians at the end of each production line, detailing the condition of items before packaging and shipment. Each entry includes the inspector's initials, the date, and a checklist of quality parameters.

• How this illustrates the term: These logs would likely qualify under the business records exception because they are:
  • Made by employees (quality control technicians) with first-hand knowledge of the furniture's condition.
  • Created as a regular part of their job duties.
  • Kept in the ordinary course of the manufacturer's business (daily quality control is standard practice).
  • Made at the time of the inspection, ensuring accuracy.
  • Not created in anticipation of this specific lawsuit, indicating trustworthiness.

2. Hospital Medication Administration Records (MARs)

Consider a medical malpractice case where a patient alleges negligence during a hospital stay. The hospital wants to present the patient's Medication Administration Records (MARs) to show that all prescribed medications were given correctly and on schedule. Nurses regularly update these digital records immediately after administering each dose, noting the drug, dosage, time, and their own identification.

• How this illustrates the term: The MARs would typically fall under the business records exception because:
  • They are created by nurses (employees) who directly administer medication and have first-hand knowledge.
  • Recording medication administration is a fundamental and routine part of a nurse's job.
  • The records are kept in the regular course of the hospital's operations, which rely heavily on accurate patient care documentation.
  • They are made contemporaneously with the event (medication administration).
  • The systematic and regulated nature of hospital record-keeping generally lends them a high degree of trustworthiness, as they are critical for patient safety and continuity of care, not just for litigation.

3. Accounting Firm Time Tracking and Billing Statements

A small accounting firm is suing a former client for unpaid services. To prove the amount owed, the firm wants to introduce its Client Billing Statements and Time Tracking Sheets. The time sheets are filled out daily by accountants, detailing hours spent on each client's tasks, and the billing statements are generated monthly based on these sheets.

• How this illustrates the term: These documents would likely be admissible:
  • The time tracking sheets are filled out by accountants (employees) who performed the work and have direct knowledge of the hours spent.
  • Creating these records is a standard part of their job for billing purposes.
  • Both the time sheets and billing statements are routinely generated in the normal course of the accounting firm's business operations.
  • They are created regularly (daily for time sheets, monthly for statements) and not specifically for the lawsuit.
  • The financial nature of these records, essential for the firm's operations and client invoicing, generally indicates their trustworthiness.