If you are involved in litigation, you have a duty to preserve all documents and data that could be relevant to the litigation. The duty to preserve evidence begins as soon as litigation is “reasonably anticipated.” That means you must begin preserving evidence even if a court has not issued a specific preservation order, and even if a formal complaint has not been filed. This is referred to as a “litigation hold” and applies to all parties involved in the litigation. It may also be appropriate to issue a litigation hold notice to related third parties. A pre-litigation demand letter, an oral threat of litigation, or even knowledge of an industry-wide problem or a problem within an organization may trigger the duty to preserve evidence.
Technological advances continue to increase the capacity for efficiency, mobility, and enhanced communication. The ability to create and store information electronically can allow for better organization, easier access to information, and faster communication between employees and customers. Along with these benefits come responsibilities of maintaining that information in the event of litigation. Like many states, Pennsylvania has recently amended its rules of discovery to specifically include electronically stored information (ESI). ESI includes all electronic information such as emails, voicemails, and documents stored on computers, servers, or other electronic devices. Information available through social media sites maintained by an organization is also considered discoverable ESI.
The comment to the amended rule expressed that there was “no intent to incorporate the federal jurisprudence surrounding the discovery of electronically stored information,” and that a proportionality standard would be followed to ensure that discovery of ESI is “consistent with the just, speedy and inexpensive determination and resolution of litigation disputes.” The proportionality standard requires the court to consider: (i) the nature and scope of the litigation, including the importance and complexity of the issues and the amounts at stake; (ii) the relevance of electronically stored information and its importance to the court’s adjudication in the given case; (iii) the cost, burden, and delay that may be imposed on the parties to deal with electronically stored information; (iv) the ease of producing electronically stored information and whether substantially similar information is available with less burden; and (v) any other factors relevant under the circumstances. The comment also noted that parties and courts may consider tools such as electronic searching, sampling, cost sharing, and non-waiver agreements to fairly allocate discovery burdens and costs. Pennsylvania is taking the proportional approach used in general discovery requests to prevent discovery of ESI from becoming unduly burdensome.
During a litigation hold, it is important to communicate to all information custodians the importance of preserving all documents and data, including ESI, and it can be helpful to appoint one person in the organization to coordinate these efforts. All key players – employees who are likely to have access to information relevant to the litigation – should be notified and instructed about how to preserve information. Former employees who may possess, or have access to, relevant information should also be notified. Information such as emails attached to a former employee’s account may need to be obtained. Failure to properly preserve information can result in adverse court directives, including default judgment or monetary sanctions.
You should have a document retention policy in place which includes electronic data and remote devices. If you have a standard policy for deleting ESI or recycling or shredding paper, these policies will need to be suspended throughout the litigation hold. You should periodically review policies and procedures for preservation and retention of data, including ESI. Be sure to add any new technology to your preservation policy. A litigation hold is a continuing obligation to preserve data, and it is much easier to comply if you have clear policies and procedures which can be monitored. Learn your organization’s potential for recovering recently deleted information. Be sure there is someone in the organization who fully understands the data storage systems used, including any information that may be hosted by third-party servers. It is helpful to identify in advance where all potentially relevant data is stored, including portable devices and servers.
The benefits of technology also bring added responsibilities and obligations in the event of litigation. Be sure your organization is prepared by reviewing your policies and understanding your data storage systems and procedures.