The Importance of the Internal Litigation Hold Letter


While the Federal Rules of Civil Procedure in the U.S. have long-required corporations and parties to preserve evidence, see Fed. R. Civ. P. 26(a)(1), 33, 34, 45, the trend toward electronic data storage is leading state and federal courts to issue opinion after opinion on the issue. Today, it is imperative that every corporation have well-known records retention policies as well as clear procedures in place for responding to litigation hold letters.

A litigation hold letter is a letter directing persons to hold and preserve certain documents which may be relevant to (or lead to the discovery of relevant evidence in) potential or pending litigation, regulatory investigation or audit. Internal litigation hold letters are issued by the party to its employees in an effort to ensure record location, retention and preservation. Unfortunately, litigation hold letters are often poorly drafted, disseminated with no follow-up, written without an understanding of how or where documents or data or stored or the retrieval process, or unaccompanied by clear processes for retention of data once it is located. Courts are increasingly sanctioning firms for failures, intentional or not, to preserve documents in situations where they had some notice of the potentional for litigation. The firm that is not constantly re-evaluating the efectiveness of its records retention programs and internal litigation holds, is the firm that is at risk of losing millions of dollars if sanctioned during litigation.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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