Simplifying the Legal Holds Process for Faster Digestion: Part 4

Finishing her series on legal holds, Counsel On Call attorney Tiffany Fox gives specifics on how to properly follow up with custodians to ensure legal holds are received, understood and complied with, as well as a summary on the changes to Rule 16(b)(3), 26(f)(3) and 37(e).

Simplifying the Legal Holds Process for Faster Digestion (for review):
 

  1. Preparation: The first step in a defensible legal hold is preparation.
  2. Identifying the Scope of the Hold: The second step is identifying the people who need to receive the hold and what information needs to be preserved.
  3. Issue a Hold Notice: Only after you have spent at least some time identifying custodians should you take the third step of issuing a hold notice.
     

The fourth and final step in a defensible legal hold process is follow up. It’s not sufficient to ask custodians to preserve data and then do nothing to ensure that they do. Courts will sanction a party that turns a blind eye to what a custodian does or doesn’t preserve, regardless of how innocent counsel was in making the decision. As an attorney you have an obligation to take reasonable steps to ensure that legal holds are received, understood and complied with.

Tracking responses to the legal hold notice and sending regular reminders are the bare minimum. In addition, notifying custodians of a hold that can be released is crucial for a couple of reasons. First, the courts will evaluate spoliation claims based on how consistent a document retention program is. If you are not following through with the release of the hold, it may tend to show a lack of oversight. Additionally, information that is subject to one hold can and will become discoverable in any future action involving that data. Destroying it once a matter has been concluded reduces that risk.

As a very recent update to our legal hold guidelines, a set of proposed changes to the
Federal Rules of Civil Procedure was proposed in June of this year by the Committee on Rules of Practice and Procedure. Language specifically addressing preservation would be inserted in Rules 16(b)(3), 26(f)(3) and 37(e). Rule 16(b)(3) would require the judge in his or her scheduling order to provide instructions regarding the preservation of data. This can help parties early on assess their needs to collect, process, review or produce certain data.

Rule 26(f)(3) would ask parties to specify in their meet and confer, and in the resulting written discovery plans, any issues they may have with regard to preservation of data, along with their plans to preserve and produce the results of the discovery process. Again, knowing what the expectations are for the final production of discovery can help your client reduce costs along the way; less “just in case” work would have to be done.

Finally, changes to Rule 37(e) would specify that in the absence of willfulness or bad faith, a party would have to show that it was significantly hampered in its ability to present a claim or defense by the loss of information due to the opposing party’s actions. (Specifically, due to an action or lack of action on the part of the opposing party, and not data lost due to the regular operation of a document retention policy or because of an act of God.) The loss of minor information would not in itself be a basis to move for sanctions for spoliation, a tactic often used to derail otherwise substantively strong claims.

Notably, the proposed new version does not lay out express requirements for preservation and legal holds, leaving those requirements to case law, but it does presume that such an obligation exists, and provides the court tools and factors by which to evaluate each situation individually. This is a strong recognition that, while a legal hold process is a must, the way in which it is carried out can and should be tailored to the needs of a given client or case.

The legal hold process is complex and can be time consuming, but the risks of not doing it right are too great to ignore. An effective process will gain efficiencies over time and will significantly reduce your client’s potential exposure in litigation. Remember that even a party with a weak substantive claim can cause headaches in spoliation fights. Your best defense, as the saying goes, is a good offense. Stay ahead of the game, and you’ll be able to focus on the important substantive fights instead.

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