Legal hold
Encyclopedia
A legal hold is a process which an organization uses to preserve all forms of relevant information when litigation is reasonably anticipated.
The legal hold is initiated by a notice or communication from legal counsel to an organization that suspends the normal disposition or processing of records, such as backup tape recycling, archived media and other storage and management of documents and information. A legal hold will be issued as a result of current or anticipated litigation, audit, government investigation or other such matter to avoid evidence spoliation. Legal holds can encompass business procedures affecting active data, including, but not limited to, backup tape recycling.
Recent amendments to the United States Federal Rules of Civil Procedure
(FRCP) address the discovery
of electronically stored information (ESI) (aka e-discovery
), expanding the use of a "legal hold" beyond preservation of paper documents. The amendments were written in anticipation of legal arguments and tactics related to the production of ESI, such as the cost
and difficulty of producing such ESI and claims that such ESI was missing, deleted, or otherwise inaccessible when it really wasn’t the case. These changes took effect December 1, 2006 and require organizations to hold all electronic records until each legal matter is formally settled, even if an organization only reasonably anticipates litigation.
This notification and subsequent related reminders should be created and distributed to specific custodians and should require the custodian to confirm receipt of such notification. This is far superior to the traditional use of read receipts reconciliation and follow-up because it allows for an unambiguous custodian response and provide real-time tracking and reporting on custodian responses. Further, automatic logging of all related audit
trail information related to the legal hold notification process is also highly recommended.
of relevant or potentially relevant documents subject to the legal hold.
The system must make use of a highly accurate policy
-based approach that enables archived and current electronic communications – including e-mail, instant messages, web transactions and communications sent from handheld devices – to be categorized and tagged according to their relevance to specific corporate policy.
Due to the substantial risk
s associated with deleting, losing, or not having access to such data
, this should be a segregated repository to better deal with the unique retention requirements and access needs of this subset of an organization’s stored documents.
The legal hold is initiated by a notice or communication from legal counsel to an organization that suspends the normal disposition or processing of records, such as backup tape recycling, archived media and other storage and management of documents and information. A legal hold will be issued as a result of current or anticipated litigation, audit, government investigation or other such matter to avoid evidence spoliation. Legal holds can encompass business procedures affecting active data, including, but not limited to, backup tape recycling.
Recent amendments to the United States Federal Rules of Civil Procedure
Federal Rules of Civil Procedure
The Federal Rules of Civil Procedure govern civil procedure in United States district courts. The FRCP are promulgated by the United States Supreme Court pursuant to the Rules Enabling Act, and then the United States Congress has 7 months to veto the rules promulgated or they become part of the...
(FRCP) address the discovery
Discovery (law)
In U.S.law, discovery is the pre-trial phase in a lawsuit in which each party, through the law of civil procedure, can obtain evidence from the opposing party by means of discovery devices including requests for answers to interrogatories, requests for production of documents, requests for...
of electronically stored information (ESI) (aka e-discovery
Electronic Discovery
Electronic discovery refers to discovery in civil litigation which deals with the exchange of information in electronic format . Usually a digital forensics analysis is performed to recover evidence...
), expanding the use of a "legal hold" beyond preservation of paper documents. The amendments were written in anticipation of legal arguments and tactics related to the production of ESI, such as the cost
Cost
In production, research, retail, and accounting, a cost is the value of money that has been used up to produce something, and hence is not available for use anymore. In business, the cost may be one of acquisition, in which case the amount of money expended to acquire it is counted as cost. In this...
and difficulty of producing such ESI and claims that such ESI was missing, deleted, or otherwise inaccessible when it really wasn’t the case. These changes took effect December 1, 2006 and require organizations to hold all electronic records until each legal matter is formally settled, even if an organization only reasonably anticipates litigation.
Hold notification
An organization has a duty to preserve relevant information when it learns, or reasonably should have learned of pending or threatened litigation, or of a regulatory investigation. In order to comply with its preservation obligations, the organization should inform records custodians of the respective custodian’s duty to preserve relevant information. The organization should provide instructions for doing so. This traditionally cumbersome process may be automated with workflow to ensure all custodians receive a formal notice and agree to its terms.This notification and subsequent related reminders should be created and distributed to specific custodians and should require the custodian to confirm receipt of such notification. This is far superior to the traditional use of read receipts reconciliation and follow-up because it allows for an unambiguous custodian response and provide real-time tracking and reporting on custodian responses. Further, automatic logging of all related audit
Audit
The general definition of an audit is an evaluation of a person, organization, system, process, enterprise, project or product. The term most commonly refers to audits in accounting, but similar concepts also exist in project management, quality management, and energy conservation.- Accounting...
trail information related to the legal hold notification process is also highly recommended.
Segregated repository for ESI
The process of identifying and eliminating non-relevant documents while identifying and preserving the needed documents out of a set of potentially relevant documents is “culling”. The relevant documents for the case are identified and preserved in a physical repositoryRepository (publishing)
A repository in publishing, and especially in academic publishing,is a real or virtual facility for the deposit of academic publications, such as academic journal articles....
of relevant or potentially relevant documents subject to the legal hold.
The system must make use of a highly accurate policy
Policy
A policy is typically described as a principle or rule to guide decisions and achieve rational outcome. The term is not normally used to denote what is actually done, this is normally referred to as either procedure or protocol...
-based approach that enables archived and current electronic communications – including e-mail, instant messages, web transactions and communications sent from handheld devices – to be categorized and tagged according to their relevance to specific corporate policy.
Due to the substantial risk
Risk
Risk is the potential that a chosen action or activity will lead to a loss . The notion implies that a choice having an influence on the outcome exists . Potential losses themselves may also be called "risks"...
s associated with deleting, losing, or not having access to such data
Data
The term data refers to qualitative or quantitative attributes of a variable or set of variables. Data are typically the results of measurements and can be the basis of graphs, images, or observations of a set of variables. Data are often viewed as the lowest level of abstraction from which...
, this should be a segregated repository to better deal with the unique retention requirements and access needs of this subset of an organization’s stored documents.
Ongoing preservation obligation
Once an organization is served with a litigation notice, all future relevant electronic communication is also subject to the legal hold.See also
- Electronic discoveryElectronic DiscoveryElectronic discovery refers to discovery in civil litigation which deals with the exchange of information in electronic format . Usually a digital forensics analysis is performed to recover evidence...
- Electronically stored informationElectronically stored informationElectronically stored information, for the purpose of the Federal Rules of Civil Procedure is information created, manipulated, communicated, stored, and best utilized in digital form, requiring the use of computer hardware and software....
- Records managementRecords managementRecords management, or RM, is the practice of maintaining the records of an organization from the time they are created up to their eventual disposal...
- Spoliation of evidenceSpoliation of evidenceIn law, spoliation of evidence is the intentional or negligent withholding, hiding, altering, or destroying of evidence relevant to a legal proceeding...