Litigation Holds and Document Preservation: A Guide for Businesses
Businesses routinely delete and overwrite information. Email retention rules, messaging platforms, backup cycles, device replacement, shared-file editing, and security-video systems are designed for ordinary operations—not future lawsuits.
When litigation is pending or reasonably anticipated, the company may need to interrupt those normal processes to preserve potentially relevant information. A litigation hold is the coordinated process used to identify, protect, and monitor that information.
When should preservation begin?
The duty to preserve does not necessarily begin only when a lawsuit is filed. It may arise when litigation becomes reasonably foreseeable. Warning signs can include:
- A demand letter or explicit threat of suit
- Service of a charge, complaint, subpoena, or agency notice
- A serious workplace complaint
- A significant accident, injury, or product event
- A contract termination accompanied by disputed claims
- A request to preserve documents
- Internal knowledge that a claim is likely
Not every disagreement makes litigation reasonably foreseeable. The decision depends on the nature, credibility, and context of the dispute. Counsel should help determine the appropriate trigger and scope.
What information may need to be preserved?
Relevant information can exist well beyond formal documents. Consider:
- Email and attachments
- Text messages and mobile devices
- Collaboration tools and direct messages
- Shared drives and cloud applications
- Contracts, drafts, and redlines
- Personnel, payroll, and benefits records
- Accounting and transaction data
- Customer relationship systems
- Security, access, GPS, or system logs
- Audio, video, and surveillance footage
- Social-media and website content
- Paper records and handwritten notes
- Data held by vendors or former employees
The objective is to preserve information relevant to the claims and defenses, not every piece of information the company has ever created.
Build the hold around issues, people, systems, and time
A defensible hold ordinarily identifies:
- The dispute or issues requiring preservation
- Relevant date ranges
- Employees and other custodians likely to possess information
- Business systems and devices containing the information
- Specific categories of documents or data
- Automatic deletion or overwriting that must be suspended
The scope should be understandable to recipients. Vague directions to “save everything” create confusion and unnecessary cost, while an unduly narrow hold can allow important evidence to disappear.
Issue clear written instructions
The hold notice should explain what must be preserved, where relevant information may reside, what normal practices must stop, and whom recipients should contact with questions. Recipients should acknowledge the notice and identify additional custodians or systems.
Avoid unnecessary discussion of legal strategy in a broadly distributed notice. Work with counsel to protect privilege and make the operational instructions clear.
Coordinate legal, IT, HR, and operations
Preservation is not accomplished simply by sending an email. The company may need technical action to suspend deletion, preserve accounts, image devices, export cloud data, protect backup media, or prevent video from being overwritten.
Legal and operational teams should determine:
- Who has administrative control over each system
- How long the system retains information
- Whether users can delete or modify data
- Whether departed-employee accounts are preserved
- Whether vendors possess unique information
- Whether encryption, privacy, or security limits collection
- How preserved information will be secured
Collection is distinct from preservation. A company may preserve information now and collect it later in a targeted manner.
Monitor and update the hold
The preservation obligation continues as the matter develops. Periodically remind custodians, add newly identified people or sources, and address employee departures, device replacements, platform migrations, and changes in the claims.
Document the steps taken. A record of reasonable decisions, instructions, follow-up, and technical measures can become important if preservation is later challenged.
When may a hold be released?
Do not lift a hold merely because activity has slowed. Counsel should determine whether the claim, investigation, appeal period, settlement obligations, and related proceedings have concluded. A written release should tell custodians and system administrators which special preservation measures may end.
Some information may still need to be retained under employment, tax, corporate, insurance, contractual, or regulatory requirements even after the litigation hold is released.
Why reasonable steps matter
Federal Rule of Civil Procedure 37(e) addresses electronically stored information that should have been preserved in anticipation or conduct of litigation but was lost because a party failed to take reasonable steps. If the information cannot be restored or replaced through additional discovery, a court may order measures to cure prejudice. More severe measures can be available when the court finds an intent to deprive another party of the information’s use in the litigation.
The rule focuses on reasonable preservation, not perfection. The appropriate effort depends on the importance of the information, the systems involved, proportionality, and the circumstances of the dispute.
A practical leadership checklist
When a credible dispute arises:
- Involve counsel promptly
- Identify deadlines and preservation triggers
- Stop relevant routine deletion and overwriting
- Map custodians, systems, devices, and vendors
- Send understandable written hold instructions
- Obtain acknowledgments and answer questions
- Protect departing-employee information
- Revisit scope as facts change
- Document preservation decisions and actions
- Release the hold only after counsel confirms it is appropriate
Early, disciplined preservation protects evidence, reduces later disruption, and allows the company to respond from a position of credibility.
Primary legal sources
This article provides general information and is not legal advice. Reading it does not create an attorney-client relationship. Preservation obligations depend on the claims, forum, governing law, systems, and facts. Businesses facing a dispute or investigation should promptly consult qualified counsel about their specific circumstances.
Facing a threatened claim, agency matter, or document-preservation issue? Learn more about Business Disputes & Investigations or request a consultation.
