Many businesses have policies and practices in place for preserving documents and information. After all, it is good to err on the side of caution and retain important documents, records, and other information. Given the amount of information that is generated today, however, preserving every bit of it indefinitely is impractical. Thus, businesses often implement document retention policies, whereby after a certain period of time, certain categories of documents are destroyed.
There are circumstances, however, when a business has a legal duty to preserve documents and other information because it might be relevant to a lawsuit. The actual preservation of information for this purpose is called a “litigation hold” or “legal hold.”
What is a Litigation/Legal Hold?
A litigation hold, or legal hold, is a process used by a business to preserve forms of relevant information when litigation (a lawsuit or arbitration) is reasonably anticipated or has already commenced. Usually, a business’s attorney will initiate the legal hold with a notice or communication to the business that requests the suspension of the business’s normal document retention or disposition policy as to documents that are potentially relevant to the lawsuit at issue, or otherwise requests that the business stop disposing of such documents. A business will then communicate the same information to relevant employees.
Must a Litigation/Legal Hold Be Communicated in Writing?
Yes. A business should always ensure the legal hold process is communicated to its employees in writing. Likewise, an attorney should communicate the same to the business in writing. This ensures a business can prove it satisfied its legal obligation to preserve information.
Why Does a Business Need to Preserve Documents and Information?
The documents and information a business must preserve potentially become evidence that can help support or defend against a claim in a lawsuit. In addition, documents and electronic data (like emails and similar documents) are often the best evidence available. Both the business and its opponent in a lawsuit will likely want to access and review any documents that might be relevant to the case.
What Information Must Be Preserved?
A business must preserve any documents and information that might be relevant or potentially relevant to a dispute. This includes contracts, notes, invoices, memoranda, photographs, databases, voicemails, videos, audio files, calendars, correspondence, timesheets, spreadsheets, construction plans, etc. “Documents” also includes both traditional paper documents and electronic documents, like emails, Word documents, Excel spreadsheets, etc.
How Long Must This Information Be Preserved?
Documents and information must be preserved until the dispute or lawsuit is resolved, or until the litigation of the dispute is no longer possible. Unfortunately, litigation can proceed for several years. Thus, a business should be prepared to preserve this information for a lengthy period of time.
These obligations might seem onerous at first. However, they can be streamlined and alleviated if you consult an attorney to assist you through the process. Preserving information in the event of a lawsuit is a critical task that should not — indeed, cannot — be overlooked. An attorney can help a business with these obligations.