I read an article in the latest issue of the New York State Bar Association Journal that discusses several recent U.S. Federal Court decisions on the issue of spoliation. Spoliation (think of the word “spoil”) deals with the situation where evidence has been lost of destroyed and what sanctions should be imposed for this loss or destruction. While spoliation was an uncommon issue in litigation in prior years, it is much more prevalent today. One reason is because if the other side did not have a document previously it was likely that the other side wouldn’t have known of its existence. However, especially due to e-mail, multiple parties will be aware of the existence of e-mails and documents that are attached to those e-mails.
What is important to bear in mind is that in this area ignorance of the law is no excuse but so is innocence – at least in the sense that the loss or destruction may have been completely unintentional. Let me give an example – suppose your Outlook or other e-mail system has a default that all e-mails over one year old that are not moved to a folder and, instead, remain in the Inbox are automatically deleted. The purpose of this rule is to avoid clutter on your e-mail server, etc. and not to destroy evidence. If there has been negligence, gross negligence or intent to destroy the evidence there will be sanctions to follow.
The sanctions will run from costs imposed against a party to the inference that the evidence is harmful to your position to the Court awarding judgment against you.
The authors of the article suggest that all companies should implement archiving solutions and data maps so that documents can be retained and quickly found. That’s great if you have a larger company, but what should you do if you’re a small business? As a practical matter, you should be backing up your data at regular intervals to avoid problems if your computer system crashes. So, keeping this data for litigation purposes is another reason for backing up your data. As an example, my firm has 16 backup tapes – four for Monday to Thursday for two weeks; four for Fridays; and four for March, June, September and December. If data problems occur, we always have backups for the prior two weeks. We also have backups of data as it existed at the end of the week for three and four weeks ago, and then we have backups for the data as it existed at the end of each quarter over the prior year. The cost is very small compared with the cost of potentially losing data.
The next recommendation of the authors is to know when the obligation to preserve documents arises. At a minimum, once you have been sued this will arise. However, some of the U.S. Federal Courts have held that it can arise as early as when a customer complains to you. I agree that if it looks like matters will go to litigation then all data related to that party should be preserved.
Finally, it should be remembered that preservation is an ongoing practice. So, for example, a customer may complain, so arrangements are made to preserve the data relating to that customer on Day 1. But then further data is created on Day 21 or Day 369 – and it has to be remembered that this data has to be preserved as well and that it’s not just a “one time” obligation.
But does all of this REALLY matter? You bet. I am going to trial soon on a matter where my client has produced almost 1,000 documents – most of them being e-mails between himself and the other side. The other side has produced under 100 documents and does not have many of the e-mails produced by my client. At trial we will be able to argue that not only has the other side “hidden” the e-mails we know about which are harmful to them, but then those e-mails make reference to other e-mails which appear to be even more damaging and we will ask the Court to infer that these other e-mails are harmful to the other side and there’s a very good chance that the Court will make that inference. Will this win the case for us? Who knows – maybe that’ll be the subject of a further posting. But, if nothing else, the other side is now in the equivalent of being in a boxing match with one hand tied behind its back. Not a good position to be in if it could have been avoided.
Something to think about.