A multi-part series on achieving effective legal holds, including relevant case law, content to include, processes to employ, best practices to follow, available tools to leverage, and more
In the first Part of this series, we reviewed an assortment of recent cases illustrating the potential dangers associated with ineffective or nonexistent litigation holds. In the second Part, we reviewed the duty of preservation and the triggers to that duty and hold issuance. In the third Part, we reviewed the standard elements of an effective hold. In this Part, we turn our attention to the processes and policies essential to effective holds.
To consistently execute effective holds, there are five key activities for which reliable processes need to be in place, and if possible, they should each also be addressed by a written hold policy. Consistency is key to defensibility, and documentation is key to consistency. As The Sedona Conference Commentary on Legal Holds states clearly in its guidelines:
Adopting and consistently following a policy or practice governing an organization’s preservation obligations are factors that may demonstrate reasonableness and good faith.
. . .
An organization should consider documenting the legal hold policy, and, when appropriate, the process of implementing the hold in a specific case, considering that both the policy and the process may be subject to scrutiny by opposing parties and review by the court.
The five key activities to address in this way are: hold initiation; hold drafting; recipient identification; compliance monitoring; and, hold release. In this Part, we will review the first two of these activities.
We have already discussed the potential range of triggering events for the duty to preserve, but what happens when one occurs? How does word filter to the appropriate individual? Who is the individual responsible for taking action? What actions do they take to initiate the process? Are the initial steps internal, or executed with outside counsel? On what timeline do they act?
Establishing a consistent, reliable process and policy for hold initiation requires that each of these questions be addressed. Many organizations establish three components to address this activity:
Together, these three components can go a long way towards demonstrating reasonableness and good faith in your efforts. As The Sedona Conference Commentary on Legal Holds states in Guideline 3: “Adopting a process for reporting information relating to a probable threat of litigation to a responsible decision maker may assist in demonstrating reasonableness and good faith.”
The next activity that can benefit greatly from a standardized process and a documented policy is the drafting of the hold to be issued. Once the responsible individual has identified a triggering event and started down the road to hold issuance, who will actually be responsible for drafting? Who will contribute to the legal substance? Who will address technical questions about subject source types or affected enterprise systems? Who will address any cross-border concerns?
Ultimate responsibility for the contents of the hold typically rests with an organization’s general counsel and the lead outside counsel for the matter, which is typically documented in the organization’s overall hold policy. Additionally, it is common for a legal department to have a documented process for drafting to help ensure consistency and completeness. Common topics addressed include:
Having a consistent process that includes input from the right individuals, consideration of all common issues, and the use of predefined approaches and templates can go a long way towards both ensuring effectiveness and demonstrating reasonableness and good faith in your efforts.
Upcoming in this Series
In the next Part of this series, More Legal Hold Processes and Policies, we will review the remaining three activities: recipient identification, compliance monitoring, and hold release.