Date: May 2016
In the most basic terms, a litigation hold is a written notice to employees and individuals under an entity’s direction and control instructing them to retain any documents, e-mails, videos, property, etc. related to a certain issue that is or may be subject to litigation. It is also notice to the information technology and records staff to suspend routine document destruction for both physical documents and electronic data.
The litigation hold notice is issued to prevent the spoliation of evidence. “Spoliation” is the destruction or significant alteration of evidence, or the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation. Failing to do so can result in significant financial penalties to a member or loss of the case completely.
Why Do Litigation Holds Matter?
Increasingly, courts are less tolerant of evidence being destroyed (either intentionally or not) after someone has become aware that a lawsuit has been or may be filed. This includes automatic destruction of electronic evidence such as e-mails, video files, etc.
A party or individual may suffer severe consequences if he or she fails to initiate or ineffectively implements a litigation hold and relevant evidence is lost, destroyed or spoiled. In the past, courts have ordered severe sanctions, such as granting default judgment against the spoiling party (the spoiling party loses the case regardless of other facts that exist to dispute this) or paying the other side’s attorney fees and expenses.
These sanctions not only increase costs of litigation, but also often result in media stories and can give the entity’s reputation a black eye. Even if destruction were unintentional, the public may perceive the government entity as hiding something to avoid liability or embarrassment.
How and When Are Litigation Holds Implemented?
The duty to preserve arises not only when a lawsuit is filed, but also during the period when a party reasonably anticipates litigation and should know that the evidence may be relevant to the anticipated lawsuit. “Reasonably anticipated” depends on specific facts of a case; therefore, anytime an individual threatens a lawsuit, the situation should be discussed with a supervisor and/or the county attorney or other legal counsel. Not every threat necessitates a litigation hold, but it is a decision best left to the county attorney or other legal counsel.
When appropriate, legal counsel typically coordinates sending a litigation hold notice. However, in some entities, it is the risk manager, county administrator or human resource professional who issues and coordinates the hold. This notice should be sent to individuals who may have information or evidence relating to the subject of the potential litigation.
The litigation hold notice should identify the matter and its scope in enough detail so that individuals subject to the hold understand what information should be kept. The subject matter and scope of the litigation hold depend on the circumstances underlying the triggering event. In the initial stages, it is best to define the scope broadly to make sure that all pertinent items are preserved and retained. The scope can always be narrowed later when more details are known about possible claims.
Individuals responsible for records retention or records destruction should be notified about a litigation hold as soon as possible because it may affect records in their custody and control. Electronically stored information (ESI) can be easily destroyed; therefore, it is critical that routine or automatic destruction is suspended as soon as it becomes clear that a litigation hold is needed. The entity’s IT department/professionals should be included in any discussion regarding preservation of data.
What Constitutes Evidence, and Where Is It?
Knowing how, where and in what form potential evidence is stored assists entities in determining how evidence will be preserved and whether there is any risk for accidental destruction.
Entity’s should consider where evidence may be stored and identify those locations in the litigation hold. Litigation hold notices should identify and cover physical evidence such as the following.
- hard copies of documents, whether printed or handwritten, including but not limited to:
- letters, memoranda or correspondence
- forms and reports
- external and internal literature and books
- schedules, worksheets or plans
- minutes, transcripts, journals
- bulletins, brochures, newsletters, notices or press releases
- calendars, appointment books or diaries
- audio or video (tapes, DVD or CD)
- other tangible items or things
ESI covered by a litigation hold may include, but is not limited to the following.
- electronic documents and files
- e-mail messages and attachments
- voice mail messages
- digital audio or video files
- text messages or instant messages
- Internet and intranet website information
- social media posts and messaging
- calendar information
- contact lists
- telephone logs
- security card logs
- Internet files and usage data
Litigation holds are not limited to formal or final documents. They apply to all drafts of documents and any handwritten notes or work papers, whether electronically stored or in hard copy.
Individuals should also be reminded where such documents may be stored. Sources of the documents and ESI may include, but are not limited to:
- all paper (hard copy) files
- computer hard drives
- computer servers
- voice mail systems
- removable media (CDs, DVDs, flash drives, backup tapes)
- laptop or tablet computers
- cell phones and smartphones
- cloud storage
- any other locations where hard copy or electronic data is stored
Litigation holds apply to all information that existed prior to and after the litigation hold is issued. The hold also likely applies to information stored in locations other than the government entity if the information relates to the subject of the litigation. Such information may be stored (especially if these items are used for work purposes) on:
- home computer, personal laptop or tablet
- personal cell phone or smart phone.
- home or personal e-mail account
- private social media accounts
The key question for members to remember about litigation holds and evidence is, does the item relate to the subject of the potential litigation, not where or how it is saved or stored.
Implementation and execution of a litigation hold is highly fact specific. MCIT recommends including the county attorney or other legal counsel and IT staff in any decision and execution of a litigation hold.