May 25, 2012 Articles

The Risks of Electronic Data Over-Preservation

Many are reluctant to throw electronic data out and risk spoliation sanctions, but saving everything to avoid sanctions is not an insurance policy; to the contrary, it increases risk.

By Anne Kershaw and Shannon Spangler

Picture this: You’re the risk-management partner for an AmLaw 200 law firm. Sheila, leader of your litigation team, comes to you for advice. A year ago, she won a defense verdict in federal court for a corporate client. After the verdict, the case settled quickly for waiver of costs. Because the company and Sheila reasonably believed this was a one-off case, your firm advised the client that it could dissolve the legal hold and manage its documents and data pursuant to its usual retention policies. The client appropriately disposed of many of the electronic documents that were produced in the first case.

Three months ago, a different plaintiff filed a nearly identical lawsuit, proving Sheila and her client wrong about the likelihood of repetition. The client issued a new, but nearly identical, legal-hold notice for the second lawsuit. Predictably, the plaintiff served the same document requests that were served in the first case. You know that the advice regarding dissolving the legal hold and returning to normal document retention policies was sound and well documented, and the legal hold for the second case was timely issued.

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