Don’t Spoil that Evidence! Tips on Initiating, Implementing, and Maintaining a Litigation Hold Policy

By Doug Holthus
dholthus@mrrlaw.com

Business owners and managers recognize that litigation is inevitable.

Saving for another day any discussion of its sanity, this reality drives the imperative that every prudent business create, implement, and maintain a Litigation Hold Policy. This is particularly true inasmuch as most every jurisdiction in the United States recognizes some bases for a potential and separate claim for “Spoliation of Evidence.” A “Spoliation Claim” (in most every jurisdiction) is recognized as a separate tort and depending upon the litigation venue, proof of evidence spoliation can result in an award of (among other items) separate monetary damages and negative inferences. In other words, an instruction/directive from the particular court that says, in effect and to the entity (or person) not having properly preserved a document, “OK, then … since you can’t produce the document and did not preserve it from loss or destruction, then that document must have contained information adverse to you position … and that’s how this court will rule.”

Not good.

So, how to best attempt to protect against a potential “Spoliation Claim”? If your business is sued or even (in most jurisdictions) has some reasonable belief that litigation is imminent, then you must be proactive and among other steps (without limitation):

  1. Develop a written “Hold Notice” and “Hold Policy,” and make certain these both are communicated to all employees.
  2. Whenever such Hold Notices are distributed, make certain the distribution is tracked and maintained. NOTE: even “Hold Notices” and Hold Policies” can be separately challenged as inadequate.
  3. Currently and proactively identify those locations where potentially relevant information (hard copies, electronic data, photos, etc.) is stored … filing cabinets, work-rooms, desks, closets, back seats of cars, file rooms, data systems, servers, desk-tops, laptops, tablets, IT service providers, mobile devices, and even data that has been shared with any third-party service providers.
  4. Define and identify those positions and persons who are to be immediately contacted for the timely preservation of all possibly relevant information and communications.
  5. Communicate with your General Counsel, outside counsel, and all third-party document and IT service providers as soon as possible (after litigation is filed, or expected to be filed) and in so doing, establish and implement clear goals and expectations relative to the preservation of all possibly relevant information and communications..
  6. Develop an “Exit Checklist” together with a process that preserves such information relative to any employees who separate from employment, for any reason. This will most certainly require a coordinated effort with your organization’s HR Dept.

This is by no means an exhaustive list, yet hopefully will provide some guidance in the creation, implementation, and maintenance of a Litigation Hold Policy.

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