Ticking Time Bomb: Defusing the Ineffective Litigation Hold Letter
By Sun Choy and David Cole


The pitfalls of e-discovery are real.  The failure to preserve electronically stored information after receiving notice of litigation or once litigation becomes reasonably foreseeable may have serious consequences, including costly and potentially devastating sanctions on both parties and their counsel.  According to a study published in the Duke Law Journal, court sanctions arising from e-discovery disputes reached an all-time high in 2009, with more sanctions being issued in 2009 alone than in all years prior to 2009 combined.  To mitigate the potential for sanctions, an effective litigation hold letter is perhaps the most important part of ensuring that all evidence, including electronically stored information, is preserved. 

In broad terms, a litigation hold letter is a written directive to the client to preserve all evidence, including electronically stored information, that may be relevant to pending litigation or a specific matter that is reasonably likely to result in litigation.  While it may be tempting to simply send a “form” letter to accomplish this task, the better approach is to issue a litigation hold that is tailored to the particular matter at issue.  At a minimum, the litigation hold letter should address the following:

  • Timing – It is important to recognize that the triggering event often occurs before the start of actual litigation.  A litigation hold should be issued once litigation over an issue becomes reasonably foreseeable.  If litigation was not reasonably foreseeable before suit was filed, the hold letter should be promptly sent after receiving notice of the complaint.
  • Proper recipients – The hold letter should be directed both to the highest level officer of the organization and to the organization’s IT manager.  In addition, the parties’ attorneys must work with their clients to identify other supervisors and individuals who are likely to be key players in the litigation and direct the litigation hold to them as well.  The recipients of the hold letters must then work with the company and its attorneys to ensure that the message is communicated to all necessary persons within the organization.  
  • Define what needs to be preserved – The hold letter must identify with specificity the contemplated or actual litigation.  It should identify the parties involved and provide a brief description of the matter at issue.   In plain and simple terms, the hold letter should state that all potentially relevant documents and information should be preserved, and it should provide specific examples of such evidence.  It should be noted that the need to preserve evidence applies to future documents and information, not just those presently in existence.     
  • Define where the evidence may be found – The hold letter should clearly state where the evidence, including electronically stored information, may be found.  This may include home and work computers, smartphones, tablets, and work and personal email accounts.  An understanding of the company’s information technology structure is key in tailoring this portion of the hold letter.
  • Compliance is mandatory – The hold letter should emphasize that compliance is mandatory and explain the consequences of non-compliance.
  • An acknowledgement of the receipt of the hold letter – For purposes of creating a record, there should be a written acknowledgement to be signed by each recipient that the hold letter was received and that the recipient will comply with the letter.  It also is a good practice for the company’s IT manager to later prepare a memorandum detailing the specific actions which were taken to search for the electronically stored information and what was done to preserve it. 

Complying with the requirements of e-discovery does not end with sending a hold letter, however.  An effective hold letter requires continual follow-up to ensure compliance as discovery proceeds.  Indeed, subsequent hold letters may be necessary if new claims or issues arise in the litigation.  Following these steps will not only make the discovery process more manageable and productive, but it will also guard against the potential consequences of inadvertently destroying evidence.

For more information, contact Sun Choy at 770.818.1412 or [email protected] or David Cole at 770.818.1287 or [email protected].

 



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