Legal Holds for Smart People: Part 3 – What Must I Preserve?

Implementing a legal hold involves two related inquiries: when does the duty to preserve attach, and what evidence must be preserved. In a previous blog post, I covered when the duty arises. Now I turn to the scope of the required preservation.

This post is the third of a four-part series in which I am providing a primer on the duties surrounding legal holds and offering tips on how to fulfill your responsibilities as a legal hold administrator. In the first post, I introduced the concept of a legal hold and how it is executed. In the second, I reviewed what must be preserved. The fourth will discuss the benefits of using legal hold technology.

In brief, once the legal-hold duty arises, an organization must decide what to preserve and how to do it. In some circumstances, the duty to preserve requires only locating and preserving a limited amount of information. In other circumstances, the scope of the information is larger and the sources of the information may not be immediately known.

Here are some of the key points to consider in determining how to implement the legal hold.

  1. Focus on key custodians and data stewards.

The touchstone of a good legal hold process is to focus on key custodians and others managing potentially relevant information. These are the individuals who can preserve data subject to the hold and help prevent losses due to routine business operations.

Once you determine there is a duty to preserve, the organization should begin to identify information to be preserved. The obligation to preserve requires reasonableness and good faith efforts, but it does not require parties to take every conceivable step to preserve all potentially relevant data.

  1. Identify potentially relevant information.

In many cases, the sources of potentially relevant information are obvious. Joe Smith’s email box and Jane Jones’ document files, for example. In other case, the identification of relevant information is much more difficult. Information posted on social media might be a concern in some cases. Information stored on home computers might also be relevant. Emails maintained in a personal account might provide a third source.

When the issue arises, consider forming a team to flesh out the details of possible claims and to help determine who to contact and where data might be stored. Your team will need subject matter experts along with legal and IT expertise.  That team need not be large or require many meetings but instead should be composed of those individuals who can quickly and accurately determine the types and locations of information that may become relevant.

  1. Determine the scope of the hold

The scope of the hold runs to data (documents, email and other sources of information) that is potentially relevant to the claims and defenses in the threatened litigation. Fortunately, the duty is grounded in reasonableness. You are not required to find every scrap of relevant information. Rather, your job is to make reasonable efforts to find and preserve relevant information.

According to The Sedona Conference Commentary on Legal Holds: The Trigger & The Process, factors to consider in determining the scope of information that should be preserved include:

  • The nature of the issues raised in the matter,
  • The accessibility of the information,
  • The probative value of the information, and
  • The relative burdens and costs of the preservation effort.

In recent years, the courts and the drafters of the Federal Rules of Civil Procedure have added the concept of proportionality to the discussion. In effect, the question is not only whether you made reasonable efforts to preserve relevant information, but also whether those efforts and the data sought were proportional to the needs of the case. As the court put it in Rimkus Consulting Group, Inc. v. Cammarata, 688 F. Supp. 2d 598, 613 (S.D. Tex. 2010):

Whether preservation or discovery conduct is acceptable in a case depends on what is reasonable, and that in turn depends on whether what was done—or not done—was proportional to that case and consistent with clearly established applicable standards.

Principle 2.04 of The Principles Relating to the Discovery of Electronically Stored Information, Seventh Circuit Electronic Discovery Pilot Program (Aug. 1, 2010), put it this way:

Every party to litigation and its counsel are responsible for taking reasonable and proportionate steps to preserve relevant and discoverable ESI [electronically stored information] within its possession, custody or control.

It should be noted that discovery involves a wide range of both paper and ESI. While most discovery focuses on email and Office documents, databases, instant messaging, voice mail and any other data that might be relevant to the claims and defenses in the case are discoverable and therefore subject to hold and preservation.

  1. Use reasonable and good faith efforts.

The duty to preserve is grounded in good faith and reasonableness. You should take action as soon as is practicable to identify and, as necessary, notify persons likely to have relevant information to preserve the information. However, it is not reasonable to expect you to take every conceivable step to preserve all potentially relevant data. Your job is to consider the sources of information within the organization’s “possession, custody, and control” that are likely to include relevant, unique information.

Your duty runs to third parties and contractors who act under your direction and may hold relevant data. In cases where the organization hosts data with outside vendors, reasonableness and good faith require hold notices to third-party vendors as well along with proper steps to ensure preservation of relevant data.

  1. Continue to monitor the hold throughout the litigation.

Legal holds are fluid and may evolve during the course of the litigation. In addition, key custodians and other subjects of the hold may forget and inadvertently delete materials subject to the hold. Monitoring the process and reminding custodians is an important step both to demonstrate reasonableness and to protect against mistakes.

Using dedicated tools like legal hold software can make this process easy. Products like Insight Legal Hold and Collection have automated reminders and will allow you to both track and send further notices easily and on a regular basis.

You should also designate someone within the legal department to be responsible for issuing the legal hold notice, answering employee questions, and ensuring ongoing compliance with the notice. For smaller companies, outside counsel may be retained to perform this oversight function. In addition, some courts require that outside counsel have an independent duty to actively supervise or participate in a party’s efforts to comply with the duty to preserve.

  1. Establish a process to release the hold when the matter terminates.

All legal holds end eventually, either upon the disposition of the case or when you reasonably determine in good faith that a claim is no longer likely to be brought. In either case, the company is free to release the legal hold and take appropriate steps with the data subject to the hold. This may include deletion of the data assuming it is not on hold for other reasons or subject to other retention schedules.

Once you determine that the hold can be released and that the preserved data is not subject to other preservation obligations, you should provide notice that the legal hold has been terminated. This notice should go to the recipients of the original hold notice and any updated notices, along with records management, IT, Management and other relevant personnel, as well as any third parties previously notified of their obligation to preserve.


About John Tredennick

A nationally known trial lawyer and longtime litigation partner at Holland & Hart, John founded Catalyst in 2000 and is responsible for its overall direction, voice and vision. Well before founding Catalyst, John was a pioneer in the field of legal technology. He was editor-in-chief of the multi-author, two-book series, Winning With Computers: Trial Practice in the Twenty-First Century (ABA Press 1990, 1991). Both were ABA best sellers focusing on using computers in litigation technology. At the same time, he wrote, How to Prepare for Take and Use a Deposition at Trial (James Publishing 1990), which he and his co-author continued to supplement for several years. He also wrote, Lawyer’s Guide to Spreadsheets (Glasser Publishing 2000), and, Lawyer’s Guide to Microsoft Excel 2007 (ABA Press 2009). John has been widely honored for his achievements. In 2013, he was named by the American Lawyer as one of the top six “E-Discovery Trailblazers” in their special issue on the “Top Fifty Big Law Innovators” in the past fifty years. In 2012, he was named to the FastCase 50, which recognizes the smartest, most courageous innovators, techies, visionaries and leaders in the law. London’s CityTech magazine named him one of the “Top 100 Global Technology Leaders.” In 2009, he was named the Ernst & Young Entrepreneur of the Year for Technology in the Rocky Mountain Region. Also in 2009, he was named the Top Technology Entrepreneur by the Colorado Software and Internet Association.John is the former chair of the ABA’s Law Practice Management Section. For many years, he was editor-in-chief of the ABA’s Law Practice Management magazine, a monthly publication focusing on legal technology and law office management. More recently, he founded and edited Law Practice Today, a monthly ABA webzine that focuses on legal technology and management. Over two decades, John has written scores of articles on legal technology and spoken on legal technology to audiences on four of the five continents. In his spare time, you will find him competing on the national equestrian show jumping circuit.

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