The unintentional destruction of significant electronically stored information is much more likely to occur with electronic discovery than it is with traditional paper-based files. This is largely due to the routine deletion or altering of data performed in the everyday operation of most IT systems. For example, some organizations routinely purge email files based on the availability of storage space and the age of the files.

Courts have long held that the duty to preserve relevant information not only exists during litigation, but extends to the period before litigation when a party should have reasonably anticipated litigation, or when a party should have known that evidence may be relevant to anticipated litigation.

This understanding by the courts creates unique and critical challenges for organizations in the age of electronic data and information. In order to ensure good faith action, a party must implement a systematic "litigation hold" once litigation is reasonably anticipated. The litigation hold process essentially creates a snap-shot of all electronic information relevant to a matter in litigation from a given time period forward. Once the hold is in place, it becomes less likely that electronic data will be lost through routine destruction.

An organization's failure to quickly and effectively respond to anticipated litigation and implement a litigation hold relative to its electronically stored information can have devastating effects on the outcome of litigation. Preservation must be taken seriously in order to avoid sanctions, which can include fines, a negative inference instruction to the jury, and even default judgment, by the court.

When evaluating an organization's ability to comply with the critical litigation hold process, the following questions should be considered.

• Does your organization's record retention policy provide for a litigation response plan?
• Does your organization have a defined methodology for communicating to employees and third parties to preserve potentially relevant records or other Electronically Stored Information (ESI) subject to a potential litigation or investigation?
• Does your organization monitor employees and relevant third parties to ensure they have preserved the appropriate data, as well as require an employee or related third party to respond affirmatively that the notice has been received and the party will comply?
• Can your organization create a data topology map of all sources of potentially relevant paper and ESI including information such as data source, type, and volume?
• Does your organization's litigation response plan include a protocol for preserving potentially relevant electronically stored information (ESI) within backup tapes and deleted files contained within key employee computer hard drives?
• Does your organization have a procedure for notifying employees and related third parties to resume normal document/data retention practices after the litigation has been resolved?
• Do your litigation notices require employees to notify a designated person if potentially relevant records may be lost or destroyed?

Percento Consulting assists its clients with recognition, evaluation and implementation of the litigation hold process. In addition Percento Consulting works with our client organizations to facilitate communication and confirmation of the litigation process with outside legal counsel.