In this article, we will take a closer look at litigation holds, what role they play within the sphere of information technology, and the legal process involved.
What is a Litigation Hold?
A litigation hold, otherwise known as a legal hold, is a notification that is sent to employees from a company´s legal department to instruct them to avoid deletion of certain Electronically Stored Information (ESI). This also includes a notification not to destroy any paper documents that may still be relevant to a current or pending legal case.
Having a litigation hold process and using a legal hold specific tool is important to demonstrate good faith in preserving evidence. It also helps to provide a strong defense in the case of a possible lawsuit.
While the concept of a litigation hold is not new, there has recently been more discernment regarding proper procedures. The importance of placing a legal hold on a company came to the surface in a historic ruling of Zubulake v. UBS Warburg, issued by Judge Shira Sheindlin.The judge ruled that both parties have an obligation to conduct “legal preservation of relevant information as soon as litigation is imminent.”
When evidence is lost or it’s impossible to preserve documents, courts might weigh other factors such as whether or not the parties acted in good faith throughout, and whether or not they performed an analysis of the facts.
Factors that Influence Whether or Not a Legal Hold is Anticipated:
- Whether or not there was specific communication
- Subpoenas
- Local rules and regulations
- Actual threats of litigation
- Cease and desist letters
Companies cannot avoid threats of possible litigation. If there is even a minor possibility of litigation, companies have an obligation to look at the situation, gather all of the facts, and decide a plan of action.
The Legal Hold Process
The process of implementing a legal hold depends on a few factors. Before drafting a litigation hold letter, the following questions must be considered:
- What is the information that needs to be preserved, and not distributed by any means?
- Where is this information currently being kept?
- Who is responsible for managing the information?
- What is the exact information that has to be protected?
It is crucial to have a strong and streamlined information governance program to identify who is responsible for preserving any information, and how this may affect local or national employee laws.
Additionally, an organization will want to keep the following in mind:
- How accessible is the information
- The relative costs associated with preserving said information
- The issues involved
- If the information is valuable or not
There is a lot involved with establishing a litigation hold. It must be able to stand up to a court trial with the questioning, and so it’s important to understand that all bases must be covered.
Who Sends the Legal Hold?
Typically in a large organization there is a team of people dealing with the litigation process. This same team will deal with legal holds.
The legal hold letter is usually sent out on a company letterhead from the company attorney. However, the document is likely to be sent from a team of paralegals or e-discovery managers rather than the attorney.
Legal Hold Notice Checklist
We have compiled a checklist to summarize the main points you should take into consideration when implementing a legal hold notice:
- Never Delay or Put the Legal Hold on Hold
As soon as there is even a possibility of a legal threat of litigation, it’s time to place a legal hold. It is better to be prepared and work on the process preemptively, while identifying the reason for the threat of litigation rather than to do nothing, or wait and see. Every situation will be different, however you can begin to anticipate possible scenarios. For example, if the organization produces food products that contain allergens that might cause severe allergic reactions, it is reasonable to believe that litigation may occur.
- Develop and Plan Escalation Schedules
You want to consider that the information contained in the legal hold may change as more is discovered about the issue. It is important to remain open, flexible, and ready to change strategy at any moment.
- Make Documenting a Policy AND a Priority
Usually, an organization will come under legal scrutiny at least once in its lifespan. Documenting all of the systems and processes, therefore, becomes a priority. With good documentation, you can demonstrate the case easily without having to spend a lot of time digging for information. It also makes the organization appear much more professional and reliable. Documentation focuses on the who, what, where, why and when at any point in time, and can easily be referred to once it has been stored.
- Identify Materials that Need to be Put On Hold
From emails to papers and from calendars to voicemails, there are many materials to consider when implementing a hold. Identify these materials that need to be held for litigation. Additionally, you’ll need to determine persons who have access to the materials and where the materials are stored.
Legal holds can affect everyone in an organization, from the principal attorney to the paralegals and legal team, as well as the business administration.
Applying a legal hold and managing the entire legal hold process requires expertise to avoid errors. It is important to be prepared, have a system in place, and have the right people and tools to support any issues that arise.
UnitedLex can help you with the legal hold and preservation process. Whether helping to support the process, helping with implementing, consulting, or taking over the entire preservation lifecycle with managed services, UnitedLex can meet you wherever you are at in the process. Read a case study here.
UnitedLex is a technology and legal services company committed to delivering full-scale Digital Legal Transformation. The world’s most forward-thinking law departments rely on the company’s expertise in more than 25 global jurisdictions. Founded in 2006, the team includes 3,000 legal, engineering, and technology professionals with major operations in 18 countries. Learn about litigation support and investigation services here. For more information, contact us.
