Litigation Hold

Litigation hold is a process where a company tries to secure and preserve every piece of information when a legal proceeding against the company is anticipated. It is also known as a stop destruction request. This process is expected whenever an audit or a government investigation comes up with grounds of tampering factual evidence and incompetent methods of securing information.

The crucial responsibility of any organization is to secure and preserve every factual data and information such as hard copy and word processing documents, videotapes, electronic and digital images and recordings, voicemails, email systems, spreadsheets and databases, recycled backup tapes, and any business-related information or financial data stored on portable devices and personal workstations of the employees. Preserving such huge chunks of information is surely challenging, and this obligation is undertaken by the corporate legal department of the company whenever this process is expected. A notice is normally issued by an authorized law firm via email or letter to initiate a legal procedure. This process identifies records of information, which can be probable targets of intentional or unintentional destruction or meddling.

Letter Sample

Here is its specimen that can be given by the company for legal formalities.

ABC Corporation Office of Counsel PRIVILEGED AND CONFIDENTIAL ATTORNEY CLIENT INFORMATION Subject: XYZ vs ABC Referring Case No: CV200 Dear Employee, This is an urgent notice with reference to the litigation hold for ABC Corporation. A complete cooperation is expected from your end in securing every factual information about the company. The lawsuit requires security of all sensitive data that includes hard copy documents, electronic data and audio-video recordings, word processing documents, spreadsheets, databases, emails, calendars, telephone logs, information on employee, Internet usage files, and every business and finance-related information. The information further includes hard disk drives, CDs, DVDs, BlackBerry devices, and recycled backup tapes. Any deletion or overwriting of information must be stalled at the earliest. Failure to abide by the instructions dictated will lead to dire consequences. For any queries related to preservation of information, contact Office of Counsel. Meanwhile, if any of the above correspondence is unclear, please contact Mr. AAA in ABC Legal Department. Sincerely, Mr. DDD Office of Counsel

Procedure

Once the notice is ensued, the first department that is alerted is Internal Corporate Counsel of the company, which triggers the litigation procedure. The corporate legal department carries out the process by delegating the tasks to the IT department, intimating them about the kind of information that is subjected to legal hold. Now, the IT section identifies the sources of records containing information like backup tapes and email systems and instructs the employees to adhere to the rules and regulations of this stop destruction request. Once done, the company intimates the trial judge about the acceptance of the notice.

Practices

Some of the good practices to be followed during hold orders are as listed below:

1. As per the procedures followed in this process, it is the responsibility of the corporate legal department to identify loopholes in the system where there could be a possibility of unintentional destruction of electronically stored information (ESI). This might happen during automatic email deletions, defragmentation, upgrading, reformatting, and recycling of backup tapes. So, whenever the request for stop destruction comes, all modifications and editing of existing information must be halted immediately. During the litigation process, generating print copies of electronic data is strictly forbidden. In cases of complex procedures where forensic data is involved, diverse technologies are adopted to manage facts required in the process.
2. During preservation orders, the most vulnerable system under attack is the email system of the company. Preserving huge chunks of information on emails is a herculean task. They comprise business transactions, financial data, emails, calendars, tasks, and contact lists. In such cases, email archiving is the best and economical practice as it eliminates the need to restore backup tapes and monitor the employees' workstations all the time.
3. In such legal procedures, there is a high probability that a lot of irrelevant information gets documented because a large amount of data is involved. In such cases, data culling and filtering strategies are adopted to channelize the information within scope and make it manageable. In data filtering, selective records are filtered on the basis of some preset criteria such as file type or time duration.

These procedures are very time-consuming and taxing. Violation of civil and criminal litigation often leads to severe penalties such as defamation and charges of obstruction of justice. To avoid any hitches in such legal proceedings, lawyers offer legal advice to companies in assessing records and identifying gaps in the storage methods adopted to secure information. As the saying goes: Nobody is above the law, so it is better to abide by what is morally correct.