Implementing a secure litigation hold system to avoid preservation pitfalls

4 steps to ensure that electronically stored information is preserved

As the corporate world becomes increasingly paperless, the preservation of electronically stored information (ESI) remains a necessity for organizations involved in litigation. Given that data spoliation sanctions can be immense, the automatic or unintentional deletion of ESI associated with information technology data management is one of the most significant risks that corporations face in today’s legal environment.

Recent cases at both the state and federal levels—such as Voom Holdings LLC v. EchoStar Satellite L.L.C. and Pippins v. KPMG LLP, respectively—emphasize the far-reaching and exhaustive preservation responsibilities incumbent upon all organizations within the legal community. The key question is: How can an organization that routinely faces the prospect of litigation implement effective litigation holds and avoid preservation pitfalls?

It is important for an organization to devise its automated litigation hold system, document its creation and maintenance, test the system and ensure that updates to the system can be made quickly and efficiently. There is no fixed way to set up an automated litigation hold system since all organizations vary in culture and structure, but an effective system typically consists of four main steps.

  1. The head corporate counsel, who is usually the first person to be made aware of anticipated litigation, must officially initiate the discovery process and trigger the hold.
  2. Members of the legal department, such as associates or paralegals, must actually take action to carry out the hold. This action could include providing instructions to employees about the hold and researching the law to ensure that the hold is sufficient.
  3. Until given notification from the legal department that the hold is over, the IT department must ensure that specific systems containing potentially relevant ESI are identified and secured. A good data map, indicating the systems and applications in use at a corporation with corresponding backup and retention information, is critical to this step, as it allows IT and legal to quickly identify potential automated deletion issues before they occur. If systems are set up to automatically delete ESI after a set amount of time, it is critically important for the IT department to immediately stop the automatic deletion. 
  4. All corporate employees must promptly be made aware of the hold, understand the instructions from the legal department and ensure that they do not delete potentially relevant ESI, such as business emails, instant messages and stored files. As an added layer of protection, an organization can use an electronic archive to centrally secure all ESI to avoid accidental deletion and to relieve employees of the responsibility. Overall, comprehensiveness is one of the most important aspects of a successful hold. An organization must take all possible steps to ensure that all potentially relevant ESI is safeguarded.

Adopting and enforcing a strong litigation hold system, such as the one above, will not only reflect well on an organization before the court, but also dramatically decrease risk and lower overall litigation costs. Of course, as with any human process, there is no absolute guarantee that a litigation hold system will eliminate all potential mishaps.

Managing Consultant

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David Canfield

David E. Canfield is a managing consultant in Kroll Ontrack’s electronically stored information consulting group.

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