The phrase “litigation hold” is not commonly found in our everyday vocabulary, but unfortunately, it has become necessary for entities of all sizes to become familiar with the term and understand its purpose.  This article will examine litigation holds.

What Is a Litigation Hold?

A litigation hold, sometimes called a “preservation letter,” is a clear, concise instruction to preserve and not destroy any paper or digital documents that contain potentially relevant information that could be involved in an investigation or lawsuit.   

What Must Be Preserved?

You have a duty to preserve what you know or reasonably should know is relevant to an investigation or lawsuit.  More specifically, you must preserve all documents that existed at the time you had notice and all documents created in regard to the investigation after you had notice.  This duty extends to all staff members that are likely to have relevant information.

When Does the Duty to Preserve Documents Arise?

A litigation hold is effective either at the request of an opposing party or once an entity is aware that their documents might be necessary for an investigation or a lawsuit.

I Have Been Notified That My Company Is Being Investigated or Sued.  What Do I Do Now?

Review your document retention policies and determine if any should be suspended so that documents are not destroyed during the hold period.  Additionally, make certain that any proposed changes to computer systems, servers, hard drives and storage devices are deferred until the end of the litigation hold period. If the opposing party did not create a litigation hold letter, then you should create one.  First, provide a brief background of the issue.   Then, describe the information to be preserved, the length of time the documents or data should be maintained, and the consequence for non-compliance.  Then detail the procedures for saving the relevant information.  Most importantly, include the contact information for the individuals designated to handle the matter.

What Happens if the Records Are Accidentally Destroyed?

The law allows for a “safe harbor” from sanctions, provided that the records are destroyed during the routine operation of records destruction policy, so long as the destruction was done in good faith, and there was no litigation hold in place where the records should have been saved. Understandably, this process can sometimes appear to be overwhelming and even irrelevant, but a proactive approach to the preservation of documents will save your company time and money.

This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please feel free to contact Timothy F. Coons at  480.461.5370, log on to udallshumway.com, or contact an attorney in your area.