You Gotta Know When To Hold 'Em . . .

Why is it that in 2019 we’re still talking about legal holds like we’ve never heard of them before?

I’m a big music fan. And I like all genres of music in fact. I invoke the immortal words of Kenny Rogers’ country tune in the title not because I’m a fan of his, but because it reminds me that legal holds have been around forever, yet they are not codified in any statute or rule. I’m not entirely sure why. We have rules for everything else. Why not legal holds?

But even more importantly, why is it that in 2019 we’re still talking about legal holds like we’ve never heard of them before? Legal operations professionals who deal with eDiscovery issues, particularly lawyers, need to pay attention because it is surprising to me that there is still a need today to talk about implementing a legal hold.

We talk about legal holds as stemming from the Zubulake line of cases in the early 2000s, but the notion that litigants or parties subject to investigation, regulatory inquiry or subpoena are obligated to “hold on to” and preserve evidence has been around since before the US even had a court system.

Of course, the requirement that an organization preserve evidence in a legal matter is enshrined in the common law court decisions that guide legal practice. The notion that an organization involved in a legal action must preserve relevant evidence stems from the common law principle that a litigant must not destroy evidence relevant to the case at hand. Still, many a client and some lawyers have gotten themselves in trouble for failing to preserve information in discovery—and those cases are published in the state and federal reporters as well. It is therefore hard to fathom why some organizations are struggling with this.

Implementing a legal hold is a fairly straightforward process. Once you are aware of or reasonably anticipate litigation, that should be considered notice that it’s time to consider a legal hold. We call this the “trigger,” but what exactly does it trigger? First, notice of a lawsuit should trigger an organization to consider preserving any potentially relevant information, including types of information, who may possess it, and for what time period. Second, it should trigger one to think about the organization’s information management practices and how they may need to be modified because of the legal hold. For instance, if an email system automatically purges data after a period of time, it makes sense to reconsider that policy in light of the legal hold.

Next, as soon as possible after identifying the custodians and sources of documents and ESI, notice (in the form of a memorandum) should be circulated within the organization. This notice should inform appropriate personnel, senior management, and the IT and records departments that the company is subject to or anticipates being named in a legal action. It should instruct them to preserve all documents and ESI relevant to the matter. A litigation hold notice should include:

  • A brief summary of the nature and circumstances of the dispute;
  • A statement of the obligation to preserve relevant information;
  • A directive not to delete, alter or destroy any potentially relevant documents and ESI;
  • The sources and types of documents to be preserved, how to properly handle them, and the consequences for failing to do so;
  • A request that each recipient of the litigation hold acknowledge receipt of the notice;
  • A person to contact if there are any questions.

Sponsored

If there are third parties involved in the events, a preservation letter should be sent to those parties requesting that they preserve the information pending the outcome of the lawsuit.

Ideally, someone within the organization should be designated as the point person, responsible to oversee the preservation process and answer any questions that may arise. In-house counsel may be best suited to this role, but whoever is chosen should have clear authority to direct all personnel within the client organization and have the knowledge and ability to deal effectively with outside counsel, support or operations professionals, and IT personnel.

The loss of data can have adverse consequences for an organization facing legal action. Even the innocent deletion of ESI can potentially give rise to claims of spoliation. And the intentional destruction of discoverable information can lead to the most severe consequences.

In the end, the most important thing an organization can do to protect against the adverse consequences of accidental data loss is to impose an effective litigation hold on appropriate custodians and relevant sources of information. Retention practices and backup procedures, including any automatic deletion policies, may also need to be modified.

If you know when to hold ‘em, you won’t need to worry about when to fold ‘em.

Sponsored


Mike Quartararo is the managing director of eDPM Advisory Services, a consulting firm providing e-discovery, project management and legal technology advisory and training services to the legal industry. He is also the author of the 2016 book Project Management in Electronic Discovery. Mike has many years of experience delivering e-discovery, project management, and legal technology solutions to law firms and Fortune 500 corporations across the globe and is widely considered an expert on project management, e-discovery and legal matter management. You can reach him via email at mquartararo@edpmadvisory.com. Follow him on twitter @edpmadvisory.