Steps to Follow in Building a Defensible Legal Hold Strategy

As was discussed in a previous blog entry, companies continue to struggle with legal hold and the importance of knowing what events trigger a legal hold, and what documents to retain. In that entry, we examined how the Presidential Records Act provides some insight to comply with the legal hold requirements of the today’s FRCP and how even the President is mandated to implement a records retention policy and put processes in place to hold and retain documents. Understanding legal hold and how to best approach this difficult topic can lead to a failure of the electronic discovery process for a company and put a company at considerable risk if it does not retain critical documents needed to answer an FRCP request.
Courts are taking increasing discretion in leveling penalties for corporate inability to comply with eDiscovery requests and negative inferences can lead to lost litigation and stiff court sanctions against the company. As electronic data sources, locations, and formats expand, it is critical for companies to understand where data resides on their network and have a records management policy that guides their response when a triggering event occurs that demands legal hold of relevant electronically stored information (ESI).

A major tenet of legal hold strategy as it pertains to the Federal Rules of Civil Procedure (FRCP) is ensuring it is defensible in court. Ensuring your eDiscovery process passes court muster is very important for defensibility of a very difficult process, and one, if not performed properly, can have adverse results. There are several cases of note that highlight the importance of this:

  • Victor Stanley v. Creative Pipe, Inc. This case set the standard for how the search of electronic documents should be handled and due to the plaintiff’s inability to properly identify documents attorney-client privilege was lost on 165 documents.  
  • Brookdale Univ. Hosp. & Med. Ctr., Inc. After being notified that privileged materials may have been inadvertently produced, the plaintiff repeatedly denied this had occurred. After 15 days of being able to review production information the plaintiff claimed 30 documents had been inadvertently provided and a search for more documents was ongoing. The defendants stated there were not 30 documents, but up to 500 e-mails that could be covered. The court ruled that the plaintiff’s time to raise privilege arguments had passed and the original 30 documents were to be returned, but all other privilege of produced documents was waived.

With these case lessons learned it is necessary to follow these steps when faced with a legal hold scenario:

  • Direct communication with every source of relevant information is crucial involving all necessary key personnel in the litigation.  This should minimize the chances of documents materializing at a later date.  
  • Executive management must explain employee’s responsibilities, convey specifics on information required, and ensure employees understand their role in the litigation.
  • Companies should put in measures to monitor and follow-up with key personnel ensuring compliance with legal hold and preservation of ESI.
  • Ensure processes are in place that shows a company acted in “good faith” in providing all relevant documents. Claiming ignorance about missing documents is not an acceptable defense.  

Using products such as Kazeon’s Information Server automate this process as it provides a defensible and repeatable approach to legal hold. It automatically manages this process and ensures all relevant documents have been found and held. It also places a legal hold on individual documents at their source, whether that is on a desktop, laptop, or file server, so strong control processes against the intentional or inadvertent destruction of important data remain.
As numerous court judgments have shown, inadequate legal hold processes are a sure path to the destruction of a company’s defensibility of litigation involving electronically stored information. Strong, defensible processes are now a requirement to ensure a proper response to legal holds and companies need new products such as Kazeon’s Information Server so they can support their good faith claims that they are taking the appropriate actions in regards to eDiscovery and legal holds.

ESI is still an elusive process in many organization and the inherent problems associated with trying to search, find and retain relevant documents in a legal hold scenario makes automating the process a must. Bringing strong processes and automation together make a good faith effort argument stronger, and makes it possible for a company to defend its eDiscovery strategy.  

Click Here to Signup for the DCIG Newsletter!


DCIG Newsletter Signup

Thank you for your interest in DCIG research and analysis.

Please sign up for the free DCIG Newsletter to have new analysis delivered to your inbox each week.