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A Compelling Need for Change in Legal Hold Practices

By Brad Harris and Charlotte Riser Harris

Over 17 months ago, Judge Shira Scheindlin sounded the clarion call once again ' organizations that fail to take reasonable steps in response to a preservation obligation do so at their peril. In January 2010, The Pension Committee of the University of Montreal, et. al. v. Banc of America Securities, LLC (685 F. Supp. 2d 456, SDNY Jan. 11, 2010) opinion reinforced principles that had been laid out as early as 2003. When litigation is reasonably foreseen, affirmative steps must be taken to prevent spoliation of potentially responsive information. Among other actions, failing to issue a written legal hold notice may constitute gross negligence, since the likely outcome of failing to notify those responsible for the custody, ownership or control of electronically stored information will be its modification or destruction.

Yet despite this call, many in-house counsel remain reluctant or unwilling to implement seemingly simple steps deemed reasonable by numerous jurists at the federal court level ' Issue a written legal hold. Take steps to ensure understanding and agreement to comply with the hold instructions. Send periodic updates and reminders. And be actively engaged in deciding what and how information needs to be preserved and collected.

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