When litigation looms, the duty to preserve evidence becomes a critical responsibility for all parties. Failing to safeguard relevant documents and data can lead to severe consequences. However, the question of “When exactly does this duty arise?” is often asked. As a result, this article explores the pivotal moments when litigation is “reasonably anticipated,” unpacks the importance of litigation hold notices, and outlines best practices to ensure compliance and avoid costly missteps.

When Is Litigation “Reasonably Anticipated” such that the Duty to Preserve Relevant Documents, Data, and Information Begins?

Litigation is generally “reasonably anticipated” when a party becomes aware of a credible threat of legal action. This duty to preserve evidence often arises even before a lawsuit is filed. Common triggers include: receiving a letter threatening future litigation, a significant report, or even assertions that you have breached a contract. Internal events, such as discussions about potential claims, can also signal the need to preserve evidence. The obligation is not limited to just a party receiving word of litigation, it extends to the party initiating too. For example, a company preparing to initiate legal action must immediately take steps to preserve relevant evidence even before filing the lawsuit. In sum, the duty to preserve is triggered when a party (1) knows or should know that the evidence is relevant to future or current litigation; (2) is on notice of a credible probability of litigation; (3) is genuinely contemplating the initiation of a lawsuit or arbitration proceeding; or takes affirmative steps to commence litigation.

Rumors, Verbal Threats, and Written Notice of Future Litigation        

Not every rumor or vague threat triggers a party’s duty to preserve evidence. Courts carefully examine the circumstances, considering factors such as the credibility and specificity of the threat and whether it was direct or implied. Good faith also plays a role. Courts assess whether a reasonable party, under similar conditions, would have anticipated litigation. A verbal threat from an unrepresented individual may carry less weight than a written notice from a reputable law firm.

What Is a Litigation Hold Notice and Why Is It Important?

Once litigation becomes reasonably anticipated, you must take steps to preserve evidence; one of the required steps is the issuing of a litigation hold notice. A litigation hold notice is a formal instruction directing parties to preserve evidence relevant to anticipated litigation. Its purpose is to prevent spoliation—the destruction or alteration of critical evidence—which can have severe consequences, including court sanctions, adverse jury instructions, or dismissal of claims.  

A well-crafted litigation hold notice outlines the obligation to safeguard all pertinent materials, including physical items, documents, and electronically stored information (ESI). It also provides clear guidance on suspending auto-delete functions on email accounts and ensures compliance across the organization.

To be effective, a litigation hold notice should:

• Clearly articulate the duty to preserve all relevant materials;
• Identify the specific types of data to be preserved;
• Suspend auto-deletion functions and backup overwrites on the system and individual level;
• Be communicated in writing, ensuring there is a documented record; and
• Include detailed instructions that employees can reference throughout the process.

Monitoring compliance of the notice is equally important. Requiring acknowledgement of receipt from the parties, tracking associated costs, and periodically reviewing the notice for compliance ensures its effectiveness. Modifications may be necessary as litigation progresses or new information emerges.  

Conclusion

Preserving evidence is not merely a legal obligation; it is a safeguard against potential litigation pitfalls. By understanding when litigation is reasonably anticipated and issuing a clear, comprehensive litigation hold notice, parties can protect themselves from severe consequences while ensuring they are prepared to navigate the complexities of legal disputes. If you have any additional questions or concerns associated with a litigation hold, please do not hesitate to contact one of our attorneys in our Litigation Practice Group.

_{This content is made available for educational purposes only and to give you general information and a general understanding of the law, not to provide specific legal advice. By using this content, you understand there is no attorney-client relationship between you and the publisher. The content should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.}