Litigation revolves around evidence. As a result, the preservation of evidence is a key part of the litigation process. Whenever we talk about eDiscovery, the presumption is that all relevant evidence can be found. That is only true, however, if all potentially relevant evidence has been preserved and collected. Ensuring this is the case requires some care and attention to be put into creating and maintaining an evidence collection and preservation strategy.
In this article, I’ll provide some answers to some of the most common questions legal teams may have on the subject of Data Preservation and Legal Hold.
Here's what's in:
What is Legal Hold?
What is spoliation?
What’s the difference between Data Retention and Data Preservation?
When Should You Start the Preservation Process?
How do I ensure data is preserved?
Where does Legal Hold fit in the eDiscovery process?
Conclusion: from Legal Hold to eDiscovery
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Legal Hold, sometimes called Litigation Hold, is the process through which parties involved in litigation preserve evidence. As part of civil procedure, parties must exchange evidence relevant to the case during a phase called the “initial disclosure”. Beyond initial disclosure, parties can also request information from each other later on. This evidence can then be searched by each party to strengthen their case or to assess likely outcomes. In its entirety, this is called the discovery phase. Insofar as discovery concerns Electronically Stored Information (ESI), it is commonly referred to as eDiscovery.
In particular, Legal Hold is the earliest active stage of the eDiscovery process. Once triggered, the Legal Hold process ensures that any evidence is preserved in order to be handed over at any point in the litigation process. When a Legal Hold fails to preserve data, the party in question risks spoliating evidence, which can have serious negative consequences.
Spoliation of evidence occurs when evidence is not properly preserved. Spoliation may lead to a judge sanctioning a party or a negative inference. In essence, a negative inference is an assumption of bad faith. That means that whatever evidence has been lost will be assumed to be helpful to the opposing side, and damaging to the side that fails to produce it. For a much more detailed overview of what spoliation is, and how to avoid it, check, here.
The heyday for spoliation was between 2006 and 2016 when the Federal Rules for Civil Procedure (FRCP) were newly amended. The 2006 amendments in particular included language that led to a growth in spoliation. Later amendments included language aimed to mitigate this growth. They did this by adding proportionality to the mix, as well as an expectation of good faith. However, not every instance of evidence missed will be spoliation by default under the current iteration of the FRCP.
Though the FRCP currently provides some wiggle room for legal professionals, spoliation is still a serious concern. Having robust data retention and data preservation protocols in place is essential for avoiding it.
Although they are similar terms, Data Retention and Data Preservation are each other’s polar opposite. Both do usually involve two departments, Legal and IT.
Data Retention is a bit of a misnomer when we consider what it aims to do. In essence, it’s a scheduling policy that governs when data can (and should) be removed from the company’s datastore. Retention deals with the removal and minimization of so-called digital debris, information that holds no business value. This is more data than most may realize. In 2012, the Compliance, Governance and Oversight Council held a survey that found:
Everything else (69% of data held) has no legal or business value. That’s a lot of bytes to store, and storage isn’t free. Retention policies aim to organize and minimize the data stored responsibly, by ensuring that data is removed from the company stores when it has outlived its usefulness. Of course, legal is usually involved here since some information needs to be kept for compliance reasons.
Data Preservation is exactly what it says on the tin. Unlike retention, preservation does not apply to all data in the company. Information that needs to be kept to comply with certain regulations, for instance, would have its place in the datastore enshrined by the Data Retention policy. Data Preservation specifically deals with information relevant to legal matters, and is used to exempt information from the normal retention policy. In a Legal Hold situation, individuals who hold potentially relevant information should be informed that the information in question is now no longer subject to the retention policy. Think of Data Preservation as the anti-retention policy and you’re on the right track.
Under the FRCP, parties are required to begin preserving evidence when litigation is “reasonably anticipated”. Vague, but simple enough. Litigation is hardly ever completely unexpected, after all. Erring on the side of caution is the smart play here. It is better to send out a few hold notifications too many than too few. As a rule, you can expect to preserve more information than you need anyway. In this case, it’s prudent to be a bit paranoid. So long as your Legal Hold is well put together, the management of a few extra custodians won’t be an issue.
Being too reluctant to start preserving evidence leaves parties at risk of spoliating evidence. Subject to regular data retention policies, evidence could be lost or destroyed. This is exactly what happened in the landmark Zubulake v. UBS Warburg case, which was the genesis for the modern conception of Legal Hold. Due to the phrasing of FRCP 37(e), there is some room for discussion on when exactly preservation duties kick in, but there should be no doubt that it does not start when the complaint is filed. When in doubt, begin to make sure any evidence is kept safe.
Once Legal Hold notices have been sent do the individuals who hold potentially relevant information (data custodians), how to make sure they comply? Communication is key in ensuring compliance from custodians.
First, ensure that key employees are aware of the preservation policy, what it means and what is expected of them. A custodian who understands the gravity and importance of the Hold Notice is much more likely to comply.
Second, make sure the Hold Notice clearly and concisely communicates the task. A Hold Notice that is overly long or difficult to read leaves room for confusion. When managing data custodians, clarity in communications creates predictability of outcome. This is true regardless of their level of experience as a custodian.
Neither of these will 100% guarantee nothing is lost every single time. Inadvertent spoliation may still occur. Having a clear and well-communicated Data Preservation policy in place helps the argument that any spoliation is inadvertent. To be clear, even inadvertent spoliation is still spoliation, but the sanctions may be far less severe if it is deemed unintentional.
As illustrated by the Electronic Discovery Reference Model (per EDRM), Legal Hold fits neatly into existing conceptions of the eDiscovery process. Data Retention schemes are a part of the more general information governance section of the model, while Legal Hold is a key part of the preservation part.
With its inclusion in the EDRM, it should be clear that Data Preservation and Legal Hold are part of the eDiscovery process as a whole. At the same time, many eDiscovery tools do not include Legal Hold tools out of the box. This is mostly due to the fact that at their core, eDiscovery tools are built for searching rather than collecting. That said, many eDiscovery solutions do have modules available that handle Legal Hold management. If you want to know more, or discuss your Legal Hold strategy with one of our experts, don’t hesitate to reach out.