Preserve Documents in the Face of Litigation

With the massive number of emails and other electronic documents generated today on a daily basis, organizations face tough challenges in preserving documents in the face of litigation. In Voom HD Holdings LLC v. EchoStar Satellite LLC, Index No. 600292/08, 2012 NY Slip Op 00658 (January 31, 2012), the New York Appellate Division provides some timely guidance on what steps parties should take to preserve documents when faced with the prospect of litigation.

The case involved a contractual dispute where the parties had been engaged in contentious discussions for six months prior to the filing of the lawsuit. The defendant did not implement a litigation hold until four days after the filing.

In the decision, the court discussed two important points.

  1. The duty to preserve documents pre-dates the actual filing of the lawsuit. A hold should be placed as soon as litigation is reasonably anticipated.
  2. A litigation hold that relies upon employee discretion to preserve emails is not acceptable. Discretionary deletion may lead to an adverse inference notwithstanding the litigation hold.

Key Takeaway

While Voom HD Holdings is not a binding precedent in Canada, its teachings regarding preservation of electronic documents should be reviewed by organisations faced with looming litigation in Canada or abroad.

 

* with the assistance of Mike Yuzdepski

contractual dispute document preservation duty to preserve electronic documents emails filing guidance litigation New York Appellate Division

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