Many courts require and many statutes mandate that parties retain and preserve documents and electronic data that relate to an existing or potential dispute. This is known as a “legal hold” and is generally initiated by a demand from an adverse or investigating party, or on direction from your counsel. A legal hold, and in particular multiple legal holds, can be problematic for your business, but the failure to comply with a legal hold can be drastic.
The legal hold is simply a requirement that you, your business and related employees and agents retain all the documents and data, electronic or otherwise, that relate to any of the issues involved in the particular matter, including lawsuits, investigations, administrative actions, or their potential. Your attorney should identify the specific types of materials and subject matters subject to the legal hold so you can instruct all employees and others in possession of the information of their specific duties and obligations. Typically, the information is to be maintained and preserved in the same form, format and system on which it was generated, received or maintained in the usual and ordinary course of your business.
The failure to comply with a legal hold can result in claims of evidence spoliation, concealment or manipulation of evidence and result in financial sanctions, fines, penalties, prevention of its use, and negative evidentiary inferences. Courts often assess costs and attorney’s fees as a result of the failure to comply with a legal hold.
On the conclusion of the situation requiring the legal hold your business should release it and handle the information consistent with other document and information retention policies. Your lawyer should obtain specific consent or authorization to lift the legal hold, including it in any settlement or resolution documents. When lifting one legal hold take care not to inadvertently delete any information subject to another legal hold.
The attorneys at Brooks, Tarulis & Tibble have experience in both demanding adverse parties impose a legal hold on relevant information and responding to legal holds imposed on our clients. Should you have any questions in this regard, please contact me.
Mark W. Schroeder
Brooks, Tarulis & Tibble, LLC
(630) 355-2101
mschroeder@napervillelaw.com
http://www.napervillelaw.com
Mark Schroeder - Business Lawyer 