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What is a litigation hold?

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Overview

Simplify legal hold management and mitigate risk with OpenText™ Core Legal Hold

Litigation hold, also known as a “legal hold” supports a legal duty to preserve potentially relevant data and is the process by which companies instruct their employees to preserve specific data as well as take steps to suspend normal document retention and destruction policies relating to anticipated or pending litigation, regulatory investigation, or other legal proceedings.

Read on to learn more about the litigation hold and legal hold processes and how you can use legal hold software to optimize activities and mitigate against any risks.

Litigation hold

Is there a difference between a litigation hold and a legal hold?

The terms litigation hold and legal hold are generally used interchangeably. Legal hold is a broader term that encompasses the duty to preserve potentially relevant documents and data whenever there is a reasonable anticipation of litigation, regulatory investigation, or other legal proceedings.

This can be triggered by various legal matters beyond just litigation, including investigations, regulatory requests, and audits. Litigation hold is more specific as it refers to the preservation duty that arises when litigation is reasonably anticipated, pending, or active. It is essentially a subset of legal hold that applies to civil litigation proceedings with the goal of preventing evidence spoliation and ensuring preservation for discovery.

Why is a litigation hold necessary?

Litigation hold obligations are essential, when litigation matters are anticipated or pending, to ensure evidence remains available and defensible in court—and to prevent evidence destruction or tampering. By implementing a litigation hold, organizations have greater certainty that critical steps are taken to ensure evidence remains unaltered and available for scrutiny. The defensibility of the litigation hold process helps to verify that data was handled properly, and preservation obligations were adhered to.

When does a litigation hold occur?

A litigation hold is triggered when litigation is reasonably anticipated, or when parties receive notice of potential claims or threats of legal action. More broadly, legal holds are often initiated for internal investigations, regulatory proceedings, or other complaints where evidence needs to be preserved. 

What are the risks of failing to comply with a litigation hold?

Failing to implement a proper litigation hold can have serious ramifications. Non-compliance with a litigation hold can lead to accusations of intentional destruction of relevant evidence. Courts may impose sanctions for spoliation of evidence (the destruction or alteration of evidence), which can include adverse inference instructions to juries, monetary penalties, or even, in severe cases, default judgments. Proper management of the legal hold process will reduce compliance risks and ensure integrity in data handling activities.

Who issues a litigation hold?

A litigation hold notice is typically issued by the in-house legal department but may also come from IT, HR, compliance, or other teams. The notice is a formal document communicating the obligation to preserve potentially relevant evidence pertaining to a case or matter.

Who receives a litigation hold?

A litigation hold notice is typically issued to custodians—people responsible for the maintenance and custody of documents. Custodians may include employees, executives, IT personnel, records managers, or any individual with control or access to the information. In some cases, litigation hold notices may also be issued to third parties who possess relevant data or records, such as external vendors, service providers, or former employees who may still have access to relevant information. These third parties are similarly expected to comply with the litigation hold directives.

Can legal holds be issued without notifying custodians?

In certain scenarios, specifically prevalent in investigations, IT may be instructed to implement a “silent” legal hold on a custodian’s data (without their knowledge) when there is concern that notification may actually lead to evidence destruction. These steps may be necessary to support the initial phases of sensitive matters—such as fraud investigations, regulatory inquiries, or whistleblower allegations—where there is a need to safeguard data before custodians become aware of an investigation, to reduce the risk of intentional or inadvertent evidence destruction.

What is in a litigation hold notice?

The litigation hold notice serves as a legally binding directive, and custodians who receive it are obligated to comply with its instructions. The notice will likely specify the issues of the matter and the need to preserve potentially relevant data with specific instructions as to the type of data that may need to be preserved along with other instructions to custodians. Relevant data includes all types of relevant information, such as documents, emails, and electronically-stored content tied to the case.

What are the key steps in the legal hold process?

The legal hold process involves a series of steps to maintain compliance. Understanding these components helps organizations develop robust procedures that meet legal requirements while simultaneously minimizing disruption to business operations. This preservation duty continues until the matter is resolved through settlement, judgment, or when all appeals are exhausted.

Identify custodians and assess the scope

The first step for any legal team facing threats of litigation or other preservation triggers is to identify the custodians—the key individuals with access and control over data—with a preservation obligation. Identifying the custodians and data sources is the foundation for a successful legal hold.

Notify custodians

Once data custodians and relevant data types are determined, the legal team will issue a notice to the custodians. These notices inform those individuals of their duty to preserve and will be accompanied by specific instructions not to delete, alter, or modify data in their possession. These will also specify what to retain. Custodians should acknowledge that they received the notice and confirm they understand and will comply with the obligations.

Interview custodians

Custodians are often interviewed or complete follow-up questionnaires to confirm and review where potentially relevant data may reside. These steps help legal teams learn more about what devices they use and where they typically save and store data. Identification of additional key players or other custodians may emerge through this process.

Data preservation and collection

It is crucial to take steps to preserve relevant information. This step involves implementing measures to protect the data from alteration, loss, or destruction. In some instances, data can be preserved in place, and in other cases, steps are taken to collect data in a forensically sound manner.

Suspend retention policies

Organizations should also temporarily suspend routine data management practices that could conflict with the legal hold, such as data deletion, archiving, document destruction, or recycling policies. In this instance, IT and other department leaders, such as record managers, work to ensure that potentially relevant data is not inadvertently destroyed.

Monitor and document legal hold obligations

Legal teams need to regularly monitor and continuously track compliance with legal hold obligations. As part of this process, periodic reminders are distributed to custodians, so they know what data is still subject to the hold and to ensure that data remains unaltered, disregarded, or destroyed. Ongoing monitoring helps address issues promptly and ensures that the necessary information remains protected.

Release the litigation hold

Once the matter or case is completed, the litigation hold is released. This allows the organization to resume managing data in accordance with company retention policies.

What are some of the key challenges associated with legal hold management?

When performed manually, legal hold processes are highly inefficient and error-prone and can increase the risk of evidence spoliation. Organizations relying on spreadsheets, email, and manual tracking often face compliance difficulties. Manual data entry becomes increasingly challenging to manage and maintain accurately. Also, organizations must continuously monitor employment changes, transfers, and departures, updating litigation hold records accordingly. Organizations with high employee turnover or complex organizational structures find this process unduly burdensome and rife with risk.

How does legal hold technology support this process?

Legal hold software automates critical aspects of the legal hold workflow. It helps centralize legal hold management so teams can be more efficient and reduce dependency on risky manual processes—converting time spent on manual, repetitive tasks into productive, higher-value work. Legal hold software offers transformative advantages over manual processes, delivering efficiency, risk reduction, and enhanced compliance.

What are the key benefits of legal hold software?

Automation reduces time to implement legal holds

Legal hold software enables legal teams to create and distribute hold notices to hundreds or thousands of custodians with a few clicks rather than through individual emails. Automated reminders eliminate the need for manual follow-up with non-responsive custodians, freeing legal staff to focus on higher-value activities. Legal hold tools track acknowledgments and questionnaire responses, providing real-time visibility into compliance status without manual data entry.

Integration with other systems mitigates risk

Integration with HR systems enables automatic notification when custodians change roles or leave the organization, ensuring preservation duties transfer appropriately. Complete audit trails document all preservation activities, providing defensible evidence of compliance that can help organizations avoid sanctions.

Improved collaboration between cross-departmental teams

Legal and IT teams can access a unified platform showing the current status of holds, custodian compliance, and preservation activities. This visibility eliminates information silos and facilitates coordinated action when preservation challenges arise. Centralized reporting also enables legal teams to quickly respond to court inquiries about preservation efforts, demonstrating a systematic, defensible approach to evidence preservation.

Enhanced custodian experience to drive compliance

User-friendly interfaces make it easy for custodians to acknowledge holds, complete questionnaires, and understand their preservation obligations. Simplified processes reduce resistance and increase timely responses, while automated reminders ensure obligations remain top-of-mind without requiring constant intervention from legal staff.

Why is litigation hold important in eDiscovery?

Litigation hold is an essential step in the eDiscovery process because, if implemented correctly, it ensures that relevant data is preserved and not lost or deleted once litigation is expected.

This step ensures that key information will be available for collection, review, and production later in the eDiscovery process.

Moreover, any information gathered during custodian interviews and questionnaires can offer additional insight and visibility into other key witnesses or other data sources to pursue for early case assessment in addition to preservation and collection. Review strategies can be formulated with confidence that data is not missing, and this allows for more confidence in the effectiveness of analytics applied against the corpus of data reviewed in eDiscovery solutions.

How does OpenText Core Legal Hold support our customers?

OpenText™ Core Legal Hold is low-cost, cloud-based legal hold software that centralizes and automates the litigation hold process using proven and customizable expert workflows for each stage of the process. It integrates with other enterprise systems to efficiently execute workflows that yield accurate and defensible results—at a fraction of the cost of competitors’ legal hold software.

Key benefits

  • Implementation made easy: start benefiting in weeks, not months, by deploying in a multi-tenant SaaS cloud.
  • Integrate seamlessly with common systems for seamless information transfer. Create a reliable, precise, and automated workflow for managing custodian profiles and transforming employee change management.
  • Achieve cost certainty and lower TCO. Leverage flat-fee subscriptions and reduce dependency on IT resources to manage legal hold software affordably.

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