Companies embroiled in litigation today are increasingly finding that the requirements and burdens of litigation discovery today bear little resemblance to litigation fifteen, or even ten, years ago. As reliance on technology—e-mail, texting, electronically stored data, etc.—continues to grow, discovery has become more time consuming, expensive, confusing and difficult. Courts have begun to impose new requirements on businesses and their counsel to ensure that electronically stored documents and information that may be relevant to potential litigation is protected and preserved. Where companies have, either inadvertently or intentionally, failed to preserve electronic records and data, courts have not hesitated to impose harsh sanctions.

While the exact rules and requirements vary between jurisdictions—and some jurisdictions have yet to establish any clear rules at all—there are certain minimum practices that companies and their counsel should be prepared to follow whenever they find themselves faced with potential litigation.

Whenever a business becomes aware of potential litigation, an obligation is triggered to preserve documents and information that may be relevant to the litigation. Spoliation, as the destruction or failure to preserve relevant materials is known, can result in sanctions against that party, including the court making findings as to what the evidence presumably would have shown, that can decide a case.

The obligation to preserve documents and information extends to electronically stored data and meta-data. To satisfy its obligation, not only can a company not actively delete or destroy relevant electronically stored data, but it must take steps to ensure that such data is not inadvertently deleted. Thus, for example, if the company has in place practices, policies and/or automated processes to delete certain data, over-write back-up tapes, etc., after a certain period of time, it must take affirmative steps to ensure that those policies are not followed for the relevant data.

Obligations of Counsel
Business counsel, whether in-house or outside, also bears certain responsibilities for preserving electronically stored data. Courts in a number of states have held that as soon as counsel for a defendant learns of potential litigation, that counsel should prepare and send the company a “litigation hold” or “preservation” letter outlining the obligation to preserve evidence and explaining the steps that should be taken to fulfill that obligation. Counsel should work with the client to make sure those obligations are satisfied.

Conversely, many plaintiffs’ attorneys send their own “preservation letter” to defendants. These letters serve to notify the company of the existence of a dispute and potential litigation. The letters typically set forth the obligation to preserve electronically stored data, and identify specific steps that should be taken to preserve that data, such as removing and preserving back-up tapes, cancelling automated procedures to delete data, etc. These letters serve a dual purpose: (1) they help to ensure that a plaintiff will be able to obtain the evidence it is looking for, and (2) they increase the chance that a judge will issue sanctions, including possible default, against a defendant that fails to protect relevant data even after receiving specific notice and request to do so.

Though no business wants to deal with the headaches of litigation, businesses that plan ahead for the possibility of litigation, by putting in place practices and processes to preserve information and data should a dispute arise, will greatly minimize their headaches if and when litigation does occur.