Updated 8/17/15: Companies are increasingly turning to automated hold processes to make a legal hold smoother and more legally defensible.
When the duty to preserve electronic evidence arises and how far it extends can be the subject of heated dispute. One thing is clear, however: When the duty to preserve evidence is triggered by pending litigation or the possibility of future litigation, don’t hit that delete button!
If a party is under a duty to preserve electronically stored information and fails to do so, that party can face sanctions for the spoliation of the information. In re Napster, Inc. Copyright Litig. (ND Cal 2006) 462 F Supp 2d 1060. Those sanctions can include:
- An inference that the destroyed evidence would have been unfavorable to the party responsible for its destruction;
- The exclusion of witness testimony proffered by the party responsible for destroying the evidence; and
- The dismissal of the claims or defenses of the party responsible for destroying the evidence.
As reported by the ABA Journal, electronic discovery sanctions have reached an all-time high. These sanctions are most commonly imposed for failure to preserve electronic evidence.
So how do you make sure that your clients do not delete electronic data? First, identify your client’s data retention and destruction policies. Determine whether or not these policies have been routinely followed and have the client halt any data or document destruction, at least until you can be sure that no material potentially relevant to current or contemplated litigation will be destroyed.
Next, send a “legal hold” or data preservation letter to all potential custodians of your client’s data that may be relevant to the subject of the case. This letter should identify a person, usually inside or outside counsel, to contact if the recipient has questions, as well as the serious consequences if the data custodian fails to comply.
Finally, follow up on the legal hold letter to make sure that the message has reached all who should be involved in the preservation effort and that they are complying with it. Keep careful records of the steps you and your client have taken to preserve evidence, so you can prepare a declaration of compliance with the legal hold and with the responsibility to preserve evidence if necessary.
On preserving electronic data, including a sample “legal hold” letter, go to California Civil Discovery Practice, chap 4. Also check out CEB’s program E-Discovery Sanctions, Spoliation, and Malpractice: Are Lawyers Meeting the Standard of Care?, available On Demand.
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