Practical guidance on implementing an effective legal hold program

Lessons learned from The Sedona Conference's Second Edition Commentary on Legal Holds

In December 2018, the second edition of The Sedona Conference Commentary on Legal Holds was published with new guidelines for implementing an effective legal hold program. The Sedona Conference is a nonpartisan, nonprofit research and educational institute dedicated to the advanced study of law and policy in the areas of antitrust law, complex litigation, and intellectual property rights. In this second edition, Sedona’s Working Group 1 updated its guidance from 2010 to incorporate proportionality and sanctions principles from the amended 2015 Federal Rules of Civil Procedure (FRCP). Additionally, the Second Edition provides new guidance on data protection laws and regulations affecting the preservation of international data.

Recently, two of my colleagues hosted an OpenText™ Live webinar to provide an overview of the new guidelines and how to put them into practice. In order to more easily digest these new guidelines, they broke down the Sedona Guidelines into three buckets:

1. Guidelines triggering a duty to preserve data:

    • Guideline 1: Provides guidance on when a reasonable anticipation of litigation arises
    • Guidelines 4 & 5: Provide factors to establish if litigation is reasonably anticipated

2. Guidelines providing a framework for implementing an effective legal hold procedure:

    • Guideline 2: States that adoption and consistent implementation of a preservation process demonstrates reasonableness and good faith
    • Guideline 3: States that use of established reporting procedures demonstrates reasonableness and good faith
    • Guidelines 6 & 7: Provide guidance on how to initiate a legal hold
    • Guideline 8: Provides guidance on the contents of a legal hold
    • Guidelines 9, 10, 11: Provide guidance on documenting and monitoring legal hold programs

3. Guideline providing new guidance on initiating a legal hold policy outside of the US:

    • Guideline 12: States that an organization initiating an international legal hold policy should be mindful of local data protection laws and regulations, specifically referencing in the Comments the challenges involved in the collection of “personal data” from the EU

Judges are not showing any signs of ceasing to use their authority under FRCP 37(e) to impose hefty eDiscovery sanctions—and corporate legal teams and their outside counsel should take heed of the new Sedona guidelines and recent case law. In fact, at the recent 13th Annual Sedona Conference Institute Program on eDiscovery, we discussed cases where District Courts and Court of Appeals imposed large monetary sanctions and even incarceration for the spoliation of discoverable data. See Klipsch Group, Inc. v. EPRO E-Commerce Ltd., 880 F.3d 620 (2d Cir. 2018); KCI USA, Inc. v. Healthcare Essentials, Inc., No. 1:14-CV-549; findings, 2018 WL 3196950 (N.D. Ohio June 29, 2018); order re: merits, 2018 WL 4327802 (Sept. 10, 2018); order re: sanctions, 2018 WL 4510118 (Sept. 19, 2018) (appeal to 6th Circuit pending).

To put Sedona’s Second Edition Commentary on Legal Holds into current context, modern day corporations are faced with the increasing challenge of a mobile workforce, along with new data sources including cloud applications, chat, social and even the Internet of Things. The burden of that pressure often sits squarely on the shoulders of legal and IT departments, who are responsible for protecting huge amounts of company data while ensuring defensible preservation when a hold arises. These holds can involve dozens, if not hundreds or more, of custodians that span many years–but many corporations still rely on error-prone manual methods such as email and spreadsheets.

Legal hold platforms, such as OpenText’s Insight Legal Hold & Collect (aka TotalDiscovery) cloud platform, automate the process of creating, sending and tracking legal holds, and can integrate remote collection capabilities. By automating the legal hold process, technology can reduce the risk of sanctions for lost evidence and make the process more transparent and efficient.

As it relates to collection itself, the new Sedona Guidelines do not directly address the preservation of a hot-button issue clients are increasingly talking about—how to deal with cell and smart phone data. In our next posting, we will discuss preservation considerations and best practices technology, such as OpenText™ EnCase™ eDiscovery.

To learn more about the Sedona Guidelines, watch the webinar: Practical guidance on implementing an effective legal hold program.



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