When a lawsuit is filed or you receive a subpoena or notice of government investigation, one of the first things on your “to do” list should be the preservation of potentially relevant documents and evidence. In terms of litigation, this duty arises when a lawsuit is reasonably anticipated. Waiting to preserve evidence until after a lawsuit is filed can have serious negative consequences, especially if information is lost. Failure to preserve evidence when you have a duty to do so is called spoliation, and can result in additional litigation costs and potentially an inference that the missing evidence would have been bad for your case. The most common way to preserve documents is through a litigation hold, a written directive advising employees to preserve potentially relevant evidence, both paper documents and electronically stored information, in anticipation of future or pending litigation.
Determining when litigation is “reasonably anticipated” is what lawyers call very “fact specific.” If you decide the facts point to a resolution without a lawsuit and without the need to implement a litigation hold, preserve your analysis in a memorandum. In the event you’re wrong and a suit is filed, you’ll have documentation supporting your good faith efforts in fulfilling your obligations. If you’re not sure whether litigation will arise, contact counsel.
Most importantly, a litigation hold should notify employees to both actively preserve potentially relevant documents and suspend any automatic deletion. Because the latter is often set at a system level, it is important to involve your IT department.
Other tips to remember when implementing a litigation hold are:
- Issue a litigation hold early: A hold should be issued when you have reasonable anticipation of a lawsuit. Make an honest assessment of the matter. If litigation seems likely, implement your litigation hold. If the lawsuit never materializes, the hold can be lifted.
- Remind the recipients: Litigation certainly isn’t the most important item on your employees’ plates, nor should it be, so periodically reissue the hold to remind them.
- Outline the scope: You probably don’t need to preserve every email the employee ever sent. Determine what needs to be preserved and make it clear in your litigation hold.
- Include specifics: Describe the matter in dispute, provide examples of information to be preserved, and identify potential sources (desktops, laptops, phones, etc.).
- Cooperate: The litigation hold should be the joint effort of legal, IT, and business groups. There is no sense in issuing a litigation hold where employees don’t understand what should be preserved or that doesn’t get to the right people.
- Questions: Inform recipients of whom they should contact with questions. Be sure that person can make quick informed responses.
- Confirm: Your notice should ask that recipients reply with an acknowledgment that they have read and understand the litigation hold.
- Gather information from recipients: Asking a series of simple questions, such as, what evidence the employee has in their possession, where it’s maintained, and who else has data relevant to this matter, can elicit a wealth of information.
- Document: In the event your litigation hold is challenged, you’ll want a record of who the notice was sent to and when.
- Ask for help: There may be times when the sheer volume or complexity around managing a litigation hold is too much. In those situations, bringing in a consultant or outside counsel to guide the process may be wise.
Remember, preservation does not equal production. The universe of documents produced in discovery is usually a subset of the documents you’ve collected, which is usually a subset of the documents you’ve preserved. So it’s better to over, rather than under, preserve –within reason.
In a world where we arrive to overflowing email inboxes every morning and field personnel are using smart phones and tablets, the volume of potentially relevant evidence can be massive on even the smallest of projects. And, there are significant costs attached to processing, reviewing, and producing documents during discovery. A modern document management system can help you reduce the volume of data and therefore costs involved, but can also provide you with better access to your information on a day-to-day basis.
Implementing a litigation hold process can be challenging for any company. But it can be made easier by having your systems already in place, such as a sound document retention policy. When putting those systems in place, bring together all interested stakeholders from IT, legal, and the business unit.
Finally, once the matter is completed, the litigation hold can be lifted and documents can be retained or destroyed per your existing document retention policies.
While no one likes to hear about some additional obligation when a lawsuit is only possible, enacting a good litigation hold has another big benefit: when it comes time to present to a judge or jury, your documents tell your story. It can be hard to think that far ahead, but a little preparedness can be invaluable.
If you would like to discuss this topic further or have additional questions, please feel free to reach out to me at firstname.lastname@example.org.