The Legal Hold and Spoliation of Evidence

on 10/13/2015 by David Szostek

The Legal Hold and Spoliation of Evidence

A legal hold (sometimes referred to as a litigation hold) is a set of procedures an organization follows in order to store and protect information or evidence that may be used or produced in litigation. The purpose of the legal hold is to prevent information or evidence from being destroyed that should be produced or used in a pending lawsuit. A legal hold is particularly relevant to large businesses with extensive information systems which produce and archive electronically stored information (ESI), as well as to smaller organizations that conduct nearly all of its business electronically. Many large businesses, as a matter of course, will purge or erase ESI at regular intervals. The legal hold exists to prevent this loss of ESI or other evidence.

When an organization learns that it is being sued or is likely to become involved in litigation with respect to a dispute, it has the duty to initiate a legal hold and preserve relevant information and evidence from the time that it knew, or should have known, that the dispute may turn into litigation. This duty applies even if the information or evidence would normally be destroyed during the regular course of business. If the organization violates this duty, it may be responsible for this spoliation of evidence. If this occurs, the organization could be severely handicapped in the lawsuit.

For example, Michigan jury instruction 6.01(d) allows a jury to infer that the destroyed information or evidence would have been adverse to the entity that destroyed it, if the jury believes: (1) the evidence was under the control of the entity, (2) the entity was capable of producing the destroyed evidence, and (3) the entity does not have a reasonable excuse for not producing the evidence. Therefore, when a legal hold is initiated, organizations must be very careful in how they handle their ESI and potential evidence.

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