Since the U.S. District Judge Shira Scheindlin's seminal 2003 rulings in "Zubulake v. UBS Warburg", lawyers have taken much attention in implementing a litigation hold to ensure the preservation of relevant documents once a party reasonably anticipates litigation. However, implementing a legal hold is easier said than done.
In a recent case involving Volkswagen AG, a mishandling of a litigation hold resulted in the indictment of six current and former employees on charges of perjury and obstruction of justice, as well the naming of an in-house lawyer as an unindicted co-conspirator. On Jan. 11, 2017, Volkswagen agreed to plead guilty to the charges and pay a $2.8 billion penalty, according to Above The Law.
As an investigation was launched into Volkswagen's diesel emissions, an in-house lawyer tipped off employees to an imminent litigation hold and indicated that they should "check" relevant documents on their computers for the investigation. The employees took this as a sign to delete documents.
It is important to understand that the litigation hold duty is a duty to preserve. It requires a party to identify, locate, and preserve information as well as tangible evidence that is relevant to specific and identifiable litigation.
Following the duty, the compliance of involves six steps. It begins with identifying relevant custodians, then informing the custodians of their duty to preserve relevant information, providing instructions for doing so, monitoring compliance, keeping an audit trail, and releasing the litigation hold when appropriate. The failure to put the hold in writing is what the courts constitute as gross negligence.
There is more to understand about the concepts involved and the steps to be taken in the basics of litigation hold, especially considering the mess a sophisticated corporation such as Volkswagen has done. Viewing the How Not to Mess Up a Litigation Hold webinar, moderated by Mary Mack, might actually do help for more details on legal holds.
