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What Is A Legal Hold?
What is a Legal Hold?
A legal hold, also referred to as a hold, preservation order, suspension order, freeze notice, hold order, or hold notice, is a notice or communication issued to an organization to preserve all forms of relevant information, as a result of a reasonably anticipated investigations, audit, or lawsuit. A legal hold therefore suspends the normal disposition or processing of records.
The purpose of a legal hold is to prevent spoliation or the loss of information that maybe related or relevant to the anticipated legal proceeding.
Legal Hold and eDiscovery
With today's technology, organizations use digital data in day to day operations. Though this may seem to be an advantage in doing tasks and in increasing productivity, the reliance on using digital data has caused a rapid growth in electronically stored information (ESI). This has lead to recent amendments in the United States Federal Rules of Civil Procedure ordering the inclusion of digital data in a legal hold (eDiscovery). The information to be preserved during a legal hold therefore is not only limited to documents in paper form, but also to electronically stored information- from word documents, excel files, email exchanges to images, audio files, website logs, etc.
More and more businesses have started to pay attention to eDiscovery as litigations that required eDiscovery of files have cost industry giants millions of dollars in fines. In the famous Zubulake v. UBS Warburg case, Judge Scheindlin awarded a total of $29M to Laura Zubulake who accused her former employer UBS Warburg, one of the big names in financial firms, for gender discrimination and illegal retaliation. Despite court orders that were issued to preserve all relevant information, it was found out that the employer had willfully deleted relevant emails. The court has also noted that UBS Warburg's legal counsel was partly responsible for the document destruction because it had failed to locate, preserve, and to timely produce relevant information. Merck & Co., Inc, a pharmaceutical conglomerate, lost $253M in a lawsuit filed by the family of Robert Ernst, a marathon runner who's cause of death was associated with the long term effects of using Vioxx, a pain reliever manufactured by Merck. The plaintiff's legal counsel argued that Merck rushed Vioxx to market without proper safety testing to compete with Pfizer Inc.’s Celebrex, then played down potential heart risks. Discovered emails sent by Merck's chief scientist questioning the efficacy of Vioxx contributed to the outcome of the case. Morgan Stanley, another financial giant, was ordered to pay billionaire financier Ron Perelman more than $1.4B after losing to a case related to Perelman's 1998 sale of his Coleman camping gear company to Sunbeam. A big factor in the outcome of the case was the inability to produce requested information due to a badly performed eDiscovery.
The Legal Hold Process
A legal hold process is composed of three main requirements.
Hold notification. Once an organization learns that a pending or reasonably anticipated litigation exists, it are obliged to preserve all relevant information. An organization should notify employees of the need to preserve relevant information and should also have a written policy with regards to the legal hold process. Determining the relevance of information to be preserved partly lies with the ability of an organization's legal counsel and its existing document retention policies.
Segregated repository for ESI. Due to the significant risks associated with deleting, losing, or not having access to electronically stored information, a segregated repository should be utilized to handle ESI.
Ongoing preservation obligation. Once litigation notice is served, all future relevant electronic communication should also be preserved as a part of the legal hold.
Chapter 15 of Information Nation Warrior: Information Management Compliance Boot Camp (Randolph A. Kahn, ESQ and Barclay T. Blair) discusses what organizations should include in developing a Legal Hold process: A policy specifically for the legal department to provide a Legal Hold notice to the rest of the organizations' employees, an outline and updated training program for employee responsibilities and preservation procedures, a standardized method for providing the Legal Hold notice to employees, a statement from organization leader or training manuals that emphasizes the organization's commitment to records and information management compliance, and to make sure that employees are following these policies.
About the Author
For eDiscovery and legal hold white papers, visit NextPage.
I Can't Stop Loving You 1987 Boots Randolph & Floyd Cramer




































































































