Managing litigation risks

What does it mean to preserve evidence?

The duty to preserve evidence involves taking steps to protect and maintain information, documents, and physical items, as well as any other forms of potential evidence, so that it remains in its original, unaltered state for use in a legal proceeding. Effective evidence preservation serves several important purposes, including:

• Integrity: When evidence is accurately preserved, this helps ensure that it has not been tampered with, altered, destroyed, or lost.
• Due process: Preserving evidence promotes fairness by enabling all parties involved in a legal dispute access to the same information.
• Compliance: Evidence preservation helps organizations comply with their legal obligations.
• Defensibility: Courts do not tolerate ill-conceived preservation processes, and evidence must be properly preserved to weather a defensibility challenge.

Failure to properly preserve evidence can result in serious consequences in legal proceedings, such as adverse inferences or legal sanctions. Therefore, it is critical that individuals and organizations involved in litigation understand and adhere to the principles and best practices of evidence preservation.

What is the rule for preserving evidence?

Under Rule 37(e) of the Federal Rules of Civil Procedure (FCRP), participants in litigation have a duty to take “reasonable actions” to preserve information relevant to a legal dispute. Litigants must demonstrate that they have taken “reasonable and good faith” steps to ensure that relevant information is not deleted after the obligation takes effect.

Failure to meet this duty to preserve may lead to claims of spoliation of evidence and other negative consequences. However, a comprehensive litigation hold process allows a party to meet this burden.

What is a legal hold?

A legal hold, also known as a litigation hold, is a written notice that an organization’s legal department sends to employees, advising them of their duty to preserve specific records and information potentially related to a pending (or reasonably anticipated) lawsuit. The hold puts on notice the organization and key custodians of their duty to preserve, collect, and produce certain information to an opposing party.

The legal hold process – step by step

The legal hold process aims to ensure that information potentially relevant to a dispute is protected until collected for review or the matter resolved. The process generally includes a series of critical steps:

1. Identify: The company must identify the records at issue—electronic information like email, presentations, documents, spreadsheets, collaboration software, calendars, photos, videos, and text messages—in both hard and soft copy format. The massive amount of information typically involved often makes the eDiscovery process extremely complex.
2. Locate: After identifying the records, the team must uncover them. Some potential locations include email servers, smartphones, cloud storage, meeting platforms, network drives, social media accounts, flash drives, and personal devices (if employees routinely use them to conduct company business).
3. Notify: Once the legal team pinpoints the records at issue and locates the likely custodians , they issue the hold notice—a written document or letter that outlines the nature of the dispute, main issues involved, types of records sought, relevant time frame, preservation obligations, how collection will proceed, and contact information for help or questions. Custodians must acknowledge receipt of the hold and that they understand their relevant obligations.
4. Suspend: Legal notice should also be given to the information technology (IT) department of the organization (and any other departments responsible for maintaining records ) with directions to suspend any routine auto-destruction of records or shredding of physical documents.
5. Preserve: To ensure the preservation of relevant data, the IT department must stop overwriting backup tapes and immediately lock down email archives and implement measures to prevent data alteration. The legal team should maintain thorough records of preservation efforts, including a list of custodians, specific documents or data preserved, and preservation methods used.
6. Monitor: Corporate legal departments must continually monitor and enforce legal hold compliance through frequent reminders to custodians, periodic audits of progress, and updates to the hold should circumstances change.
7. Release: Once the related matter concludes, the legal team will formally release the hold, document the date and reason for the release, and notify all relevant custodians. To reduce storage costs and avoid future risk, outdated information should be deleted in accordance with standard retention protocols.

The duty to preserve evidence

To effectively manage litigation risks for their organization, corporate legal teams are responsible for properly preserving evidence during the discovery process.

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To learn more about preserving evidence, check out Thomson Reuters’ new on-demand webinar, Managing Litigation Risks: Navigating the Perilous “Bookends” of Civil Discovery.