Our judicial system is firmly rooted on the belief that parties to litigation should share documents and other information prior to trial. In support of that proposition, each party has a duty to identify, locate and preserve information and other evidence that is relevant to that specific litigation. The purpose is to avoid the intentional or inadvertent destruction (“spoliation”) of relevant evidence that might be used at trial.
The key point to understand is that this duty to preserve evidence may arise even before suit is filed or the information is otherwise requested. In 2003, a federal court judge set out the rule for what has become known as a “legal hold.”
“Once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a ‘litigation hold.’”
What is a legal hold?
Legal holds arise from the duty to preserve information for pending or reasonably anticipated litigation. In essence, those covered by the hold as well as the organization itself must stop deleting potentially relevant data while the hold is in place. (While legal holds are sometimes instituted for non-litigation reasons, such as for an internal investigation, the focus of this article is litigation.)
Think of it as the start of the litigation process.
Litigation typically (but not always) begins with a hold notice and then continues with communications, collection and preservation for the anticipated litigation. From there, steps can vary but typically include identifying potentially relevant information, positioning it for review by counsel, producing discoverable documents and other data and then preparing for trial.
Here are key items to consider in implementing the hold.
1. Identify key custodians and data stewards
The first step in a legal hold is to identify key custodians and other data stewards such as IT and records management personnel, information technology personnel, division managers, the legal department itself and others who might have knowledge or data relating to the anticipated litigation.
In most instances, this will turn on your understanding of the issues underlying the anticipated litigation. The courts are mindful that your understanding of the claims and defenses likely to be raised is far from perfect, and will be developed over time as the case proceeds. Rest assured that perfection is not required here; rather, the standard is one of reasonableness under the circumstances.
2. Issue a written hold notice
Once you have identified the key people subject to the hold, the next step is to notify each and direct them to stop deleting documents that relate to the issues in the hold. For individual custodians, this would be a notice to refrain from deleting email or other documents in their possession. For IT personnel, the message would be to suspend any routine document retention/destruction policy that might impact data subject to the hold.
The hold notice can be delivered in several forms, including email, written hard copy or, in some cases, verbal. The key is that the notice should be in a form which is appropriate to the circumstances.
That said, the safest practice is to issue it in writing, either by email or hard copy. Some courts have held that a party failed in its duties because it did not issue a written hold notice. While other courts disagree, a written hold notice is the safest course of action and will eliminate later questions as to what message was given.
3. Provide basic information about the hold in your notice
There is no hard and fast rule governing hold notices. However, courts have suggested that the notice should at a minimum:
- Describe the matter at issue,
- Provide specific examples of the types of information that might be relevant,
- Identify potential sources of information,
- Inform recipients of their legal obligations to preserve information, and
- Include reference to the potential consequences to the individual and the organization of noncompliance.
- Do all of this in clear, plain language.
The notice should also inform recipients whom they should contact if they have questions or need additional information. Ultimately, each situation must be evaluated based on its own individual facts. The preservation notice should be adapted to conform to the facts and circumstances unique to that case.
4. Secure an acknowledgement of the hold
While an acknowledgment and agreement to honor the hold notice is not absolutely required, it is a smart practice to obtain them from key custodians. Their acknowledgement helps ensure and document that each custodian was aware of their preservation duties and obligations. The agreement to honor the hold reinforces the seriousness of the situation and will demonstrate good faith in your process.
5. Send periodic reminders about the hold
Litigation can take years to resolve which means your hold may last for years as well. Sending periodic reminders about the nature and scope of the hold is smart practice. While there is no set requirement for reminders, sending quarterly updates will ensure the custodians and IT department know that the hold is still in force.
6. Document the process
In case your efforts around legal hold notices are questioned later, make sure you document the process from A to Z. What was the understanding of the claim, how were people identified for the hold, who acknowledged the hold, what communications and actions took place and when?
Don’t rely on your memory or those of the key custodians. When questions on the hold arise two years later, memories will be dim and often wrong. Employees may be gone and not interested in helping document your steps.
Documentation of the legal hold process should include:
- The date and by whom the hold was initiated and possibly the triggering event;
- The initial scope of information, custodians, sources, and systems involved;
- Subsequent scope changes as new custodians or data are identified or initial sources are eliminated; and
- Notices and reminders sent, confirmations of compliance received (if any), and handling of exceptions.
In addition, you may want to document the process of how a specific legal hold was implemented, including:
- Description of the collection protocol, persons contacted, and the date information was collected;
- Notes (at least as to procedural matters) from any interviews conducted with employees to determine additional sources of information; and
- Master list of custodians, data stewards, and systems involved in the preservation effort.
In the end, failing to document hold efforts is the surest way to make a judge consider sanctions for failing to take reasonable efforts with respect to your hold efforts. Interested in learning more? For further information download the Practical guidance on managing legal holds whitepaper.