The legal hold is the mainstay of eDiscovery preservation for businesses of all sizes. Legal holds are implemented using a written legal hold notice. An effective legal hold moves through four distinct stages: draft the notice; distribute the notice; manage the hold; and release the hold.
In its essentials, a legal hold notice – sometimes called a litigation hold, preservation notice or preservation hold – instructs the company’s employees and agents not to delete or destroy relevant documents and ESI until further notice. The primary purpose of the notice is to comply with the duty to preserve. The duty applies to all relevant information in the company’s possession, custody or control after litigation occurs or is reasonably anticipated.
Additionally, a well-written and properly managed hold is evidence of a good faith, reasonable effort to comply with the preservation obligation. This is a key element of defending against a claim of spoliation.
There are four distinct stages in implementing a legal hold for your client’s data. For an overview of the related topic of sending a preservation demand letter to the opposing party, see this article.
Stage 1: Draft the legal hold notice
The first step is, naturally enough, to draft the legal hold notice. The notice should cover these seven topics:
- Subject matter of the dispute – Briefly describe the nature of the legal dispute; for example, a lawsuit, internal investigation or response to a demand letter from the opposing party. Give a layman’s summary of the subject matter of the dispute and identify the main people and companies involved.
- Relevant timeframe – Some disputes have defined start and/or end points for the creation of relevant documents and ESI. Specify a relevant timeframe where possible.
- Data sources and types – List sources and types of potentially relevant ESI based on the information you have about the company’s IT systems. Also list known sources of paper files and archives. Finish with a catch-all “and anything else you have or control” statement.
- Instructions for compliance – Instruct recipients not to delete or destroy any information relevant to the subject matter of the dispute until further notice.
- Contact person – Identify a contact person for questions and concerns. If the company has a legal department, the contact person will generally be an in-house lawyer or paralegal. Alternatively the contact person may be someone in upper management or outside counsel.
- Confidentiality obligation – Emphasize that the hold notice is privileged, litigation work product and highly confidential. Recipients should not forward or discuss the notice except with counsel. If they know of someone else who should receive the notice, they should inform the contact person.
- Purpose and importance of the hold – Emphasize that the company has a legal duty to preserve relevant evidence. It’s important for every recipient to fully comply with the hold.
Best practice is to prepare a separate hold notice for IT staff. Much of the content will be identical to the basic notice sent to employees. However, you should customize the description of data sources/types and the instructions for compliance in light of IT’s unique responsibility for systems and archives.
Ideally the information for the first three topics will have already been compiled as part of eDiscovery identification. I described the purpose and methodology of identification in this three-part series.
Stage 2: Distribute the hold to custodians and IT staff
The second stage is to distribute the legal hold notice. The distribution list should be based on information learned during identification. It is critical to keep a record of who received the hold and when.
Require recipients to acknowledge receipt of the hold notice and track the responses. Send a reminder to anyone who has not responded within the required time (for instance, one week). Often an initial failure to respond is simply because the person has been out of the office on vacation or business travel. However, individual follow up about the purpose and importance of the hold is in order if no response is received after the reminder.
Typically the contact person emails the notice and recipients provide acknowledgement by reply email. Companies with particularly heavy litigation burdens should consider investing in a litigation hold software product. Litigation hold software automates many tasks throughout the four stages, including tracking acknowledgements.
Stage 3: Manage the hold while the dispute is ongoing
The preservation duty lasts until final disposition of the underlying matter. That is often years after the distribution date. The hold must be actively managed throughout this entire time. Fortunately the management requirements are not onerous.
First, send appropriately spaced reminders to the distribution list that the hold is still in effect.
Second, plan for personnel changes. When people on the distribution list leave the company their data must be archived or collected in a defensible manner. If the relevant timeframe is ongoing, other employees may need to be added to the distribution list due to hiring or reassignment.
Third, it’s advisable to periodically talk with IT staff about the implementation of all active legal holds. This is not only to confirm that IT is complying with the hold. It’s equally an opportunity for IT to raise concerns relating to operational disruption, staffing burdens and storage costs.
Finally, document all of the above. Aside from its value in the actual management of the hold, thorough documentation will be critical if it becomes necessary to defend against a spoliation claim.
Stage 4: Release the hold when the matter ends
The final stage is to release the hold when the preservation obligation is lifted. Most importantly, this means notifying the distribution list that they can resume normal document management practices. It also includes defensible deletion of archived data. Defensible deletion falls under the larger umbrella of information governance, which takes into account business needs and retention schedules.
The main obstacle to effective release of the hold is insufficient documentation of distribution and management. If actions taken to comply with the hold were not documented, data can easily be overlooked. This is a particular issue in areas under IT’s responsibility, such as changing system settings and archiving separated employees’ data.
In the post Create a Successful Preservation Strategy I covered the “why” and “how” of formulating a preservation plan. The legal hold is the foundation of most corporate preservation plans. Writing and managing effective legal hold notices is an essential skill for in-house and outside counsel.
Helen Geib is General Counsel and Practice Support Consultant for QDiscovery. Prior to joining QDiscovery, Helen practiced law in the intellectual property litigation department of Barnes and Thornburg’s Indianapolis office where her responsibilities included managing large scale discovery and motion practice. She brings that experience and perspective to her work as an eDiscovery consultant. She also provides trial consulting services in civil and criminal cases. Helen has published articles on topics in eDiscovery and trial technology. She is a member of the bar of the State of Indiana and the US District Court for the Southern District of Indiana and a registered patent attorney.
This post is for general informational and educational purposes only. It is not intended as legal advice or to substitute for legal counsel, and does not create an attorney-client privilege.