Larger corporations have faced this reality for many years: litigation involving records can be extremely costly, very disruptive and just a pain in the “you-know-what.” Now smaller companies are also experiencing what their larger counterparts have known for some time, that all of this data that is placed on company computers is a mine and a mine field. Information must be mined, but within that information there could be powerful information, of which only some may be privileged and protected from disclosure.
When litigation commences, whether federal or state, attorneys will generally issue what are referenced as “legal hold” orders or some other similar sounding directive. What these letters and orders do is direct management and managers to preserve evidence. This may require preserving documents, whether emails, programmatic files or otherwise for a period of time in excess of what a company’s policy might otherwise dictate. The legal requirements trump company policies.
If confronted with litigation, it is important to discuss with your attorneys any requirements regarding preservation of electronic documents. While it may be costly to do so, it could be painfully more costly to not do so if your pleadings are stricken, burden of proof is enhanced, or any testimony on the part of the company must be corroborated with either a third-party testimony or documents. In addition, there is also the possibility of the court awarding substantial attorney’s fees on top of the potential liability. And all of these sanctions happened recently in a single case!