Most people know that any party involved in a lawsuit undoubtedly owes an “uncompromising duty to preserve” what they know, or reasonably should know, that this may be relevant evidence in their lawsuit. What they don’t know is that this is true before discovery requests are processed, and sometimes even before the complaint is filed. Here is an introduction to the duty to preserve evidence and how to violate it: “Looting”.
Duty to preserve evidence
The obligation to preserve evidence arises when:
- Litigation is “pending” or “likely”;
- You know the existence or the likelihood of litigation.
- You know the relevance of the evidence to the litigation. and
- It is foreseeable that the opposing party will be prejudiced if the evidence is destroyed.
According to this basic principle, the obligation is generally deemed to have been triggered at the latest when the complaint is served on the defendant. However, prior to this point in time, most courts also agree that receipt of a letter of formal notice from the defendant or any other threat of litigation will also trigger the obligation. For this reason, we usually advise our customers to play it safe and immediately instruct them to take steps to retain any potentially relevant documents, including emails and the like, that are routinely (in the case of paper) or destroyed could be deleted / overwritten (for electronic files). This suspension of routine document destruction guidelines is known as a “litigation”.
A quick note about electronic evidence – today this is usually the largest part of the evidence produced in litigation and there are several aspects to ensuring that you are doing the duty in full. Backup storage or archives must be retained. Old storage devices like hard drives or even old cell phones all need to be kept and searched when they can potentially contain relevant evidence.
A violation of the obligation to preserve evidence is called “looting”. Expropriation is BAD – and the court has inherent power to impose penalties for the expropriation of evidence. This will be determined on a case-by-case basis and the sanction will be based on a balancing test of the degree of fault against the degree of prejudice of the other party. Some examples are:
- Allocation of Fees or Shifting Costs: The court may ask the party who destroyed evidence to pay the other side’s costs in order to obtain equivalent evidence from another location (if possible).
- Exclusion of Evidence: When a party has destroyed relevant evidence, the court may exclude related or inferred evidence (so that the party cannot “select” parts of an overall document or file to be created).
- An instruction from the jury for negative conclusions: This essentially means that the court will instruct the jury to conclude that the destroyed evidence was prejudicial to the party who destroyed it.
- Making a Claim or Defense: The court may also make a claim or defense by a party if their wrongdoing affects the resolution of that particular problem.
- Contempt: The court may despise the party for failure to preserve evidence.
- Default or Dismissal: In the most extreme cases, the Court may give a default judgment against a defendant or discharge a plaintiff.
These consequences can hinder a case or defense significantly and are harsh for a reason. If you are contemplating litigation, or if you think you may be at the end of a lawsuit, make sure you understand those obligations so that you can start performing your duties right from the start.