Most people know that any party to litigation unquestionably owes an “uncompromising duty to preserve” what they know or reasonably should know may be relevant evidence in their lawsuit. What they don’t know is this is true before any discovery requests are served, and sometimes, even before the complaint is filed. Here’s a primer on the duty to preserve evidence and its violation: “spoliation.”
Duty to Preserve Evidence
The duty to preserve evidence arises when:
- Litigation is “pending” or “probable”;
- You know of the existence or likelihood of the litigation;
- You know of the evidence’s relevance to the litigation; and
- It’s foreseeable that the opposing party will be prejudiced if the evidence was destroyed.
Under this basic principle, the duty is generally considered triggered, at the latest, when the defendant is served with the complaint. But before that point, most courts also agree that the defendant’s receipt of a demand letter, or some other threat of litigation, will also trigger the duty. That’s why as a general rule, we recommend our clients err on the side of caution and immediately instruct them to take steps to preserve all potentially relevant documents, including emails and the like, that might routinely get shredded (in the case of paper) or deleted/overwritten (in the case of electronic files). This suspension of routine document destruction policies is what we call a “litigation hold.”
A quick note on electronic evidence – today, this typically constitutes the bulk of evidence that is produced in litigation, and there are several facets to making sure you’re complying with the duty completely. Backup storage or archives need to be preserved. Old storage devices, like hard drives or even old cell phones, all need to be preserved and searched if they can potentially hold relevant evidence.
Violation of the duty to preserve evidence is known as “spoliation.” Spoliation is BAD – and the Court has the inherent power to order sanctions for spoliation of evidence. This is determined on a case-by-case basis, and the sanction is based on a balancing test of the degree of fault vs. the degree of prejudice suffered by the opposing party. Some examples are:
- Award of fees or cost-shifting: the Court may order the party who destroyed evidence to pay the other side’s costs in obtaining equivalent evidence from somewhere else (if possible).
- Exclusion of evidence: if a party has destroyed relevant evidence, the Court may exclude related or derivative evidence (so the party can’t “pick and choose” parts of an overall document or file to produce).
- An adverse inference jury instruction: this essentially means, the Court will instruct the jury to infer that the destroyed evidence was adverse to the party who destroyed it.
- Striking a claim or defense: the Court can also strike a party’s claim or defense if their misconduct tainted the resolution of that particular issue.
- Contempt: the Court may hold the party in contempt for failure to preserve evidence.
- Default or dismissal: in the most extreme cases, the Court can enter a default judgment against a defendant or dismissal against a plaintiff.
These consequences can severely hamper a case or defense, and they’re harsh for a reason. If you find yourself contemplating litigation or believe you might be on the receiving end of a lawsuit, make sure to understand these obligations so you’re fulfilling your duties from the outset.