“Spoliation”: the word alone is enough to cause even the most steely-nerved advocate’s heart to skip a beat. The headlines we read about courts sanctioning parties tens, if not hundreds, of thousands of dollars for the loss of evidence are terrifying, as are the other potential consequences: the inability to use evidence at trial, adverse inference presumptions, dismissed claims, and even default judgments.
But all is not lost. Here are five steps that organizations can take to insulate themselves from potential liability for spoliation.
1. Train everyone in your organization about the duty to preserve evidence.
As soon as litigation is foreseeable, your duty to preserve evidence arises. The problem is, in many cases, there’s no clear, bright-line rule about when the duty attaches. It’s circumstantial: the duty may start when you receive a demand letter from a plaintiff, when you get a copy of a lawsuit, or when someone threatens to sue you over the phone. Whenever you have an inkling that litigation is possible, that is probably the best time to implement a legal hold.
Action step: Conduct company-wide training on legal obligations, including the need to watch out for signs of litigation and the steps employees should to take if they witness signs of potential disputes.
2. Reduce the amount of data that you store.
If your organization has less data, that means it has less data to lose. If you have an information governance protocol that everyone in your organization adheres to, then you’re golden. But if your protocol is spottily enforced, if at all, it can open you up to liability. Check in periodically with business units to ensure that they are following the terms of your records retention schedules to the letter.
Action step: Make sure that you communicate to IT about how important it is to follow records-retention policies and to discuss any decisions to deviate from their terms with legal counsel.
3. Disseminate a legal hold.
If litigation is on the horizon, you must act immediately to suspend all destruction of potentially relevant information under your information governance protocol. The first step is to issue a legal hold—in writing—that explains to all potential document custodians what evidence they must preserve.
Action step: Make sure the hold includes all potential sources of information, both inside and outside the organization: emails, text messages, chat apps like Slack, videos, social media, and the like. If your employees have their own personal devices, including laptops and smartphones, or personal email and chat accounts, that they use for work, include them as well.
4. Renew the hold.
A legal hold is not a one and done thing. Because litigation can be protracted, extending for several years, it’s important to periodically remind custodians of their obligation to preserve evidence and to update them if new claims and defenses arise or are dismissed and as your understanding of the case deepens.
Action step: Ask your custodians to confirm, in writing, that they are continuing to adhere to the terms of the legal hold on a regular schedule.
5. Document everything.
By routinely documenting your decisions about when you anticipate litigation and which records you’re keeping and discarding, you can better manage your risks. Contemporaneous documentation is convincing evidence in the event of a dispute about your document preservation efforts.
Action step: Be sure to document your decision even if you don’t issue a legal hold, so you can explain your reasoning to opposing counsel and the court and use your documentation as proof against any second-guessing of your motives.
There are never any guarantees when it comes to litigation. However, by taking these steps, you can reduce the risk of inadvertent spoliation—and with it, the risk of sanctions. For more tips on how to conduct better eDiscovery, get in touch.