Why So Many Sanctions? Failure to Enforce Legal Hold Processes

Uncategorized 0 January 17, 2019 2132 Aaron Taylor

For anyone following eDiscovery news through blog sites, newsletters or any of a variety of sources, articles announcing yet another sanction or penalty seem to be an almost daily occurrence. And yet, why is this happening? Sedona Conference has continually provided updated white papers advising on how best to implement legal holds and other methods that supposedly would help ensure more compliance, not the opposite; and attorneys are better-schooled (supposedly, again) in both processes and technology to provide capable guidance in preparing for and presenting relevant documents in litigation or regulatory proceedings; lastly, more corporations and law firms at least seem interested in adding an eDiscovery Manager position, whether in-house or as a contract position, or possibly at least legal hold software to manage all eDiscovery and Legal Hold processes. So, what is not working?

The concept of providing formal legal hold processes made its transition to reality “way back” in the 2003 Zubulake v. USB Warburg ruling. Since then, there have been innumerable court cases related to legal holds and document preservation or production, and sanctions related to lack of such actions; one of the most recent and significant would certainly be Jose Franklin v. Howard Brown Health Center, (N.D. Ill.) Oct. 4, 2018, where the court stated the defendant “…bollixed its litigation hold – and it has done so to a staggering degree and at every turn.” Pretty strong language, with sanctions that were certain to follow.

And of course, eDiscovery organizations, law firms and interested professionals have chimed in with advice, warnings, guidelines and offers of assistance to avert such calamities from happening to “your” litigation, audit or regulatory matter. So, one would assume everyone is making progress, becoming more sophisticated in their approach to managing how they prepare for and conduct eDiscovery through their legal hold processes; perhaps we are, and the actual number of sanctions may be less than they could be – it’s hard to prove a negative. But, for your company or firm, at that one moment, one instance of wrongdoing or misstep is one too many.

Back to the question: What is not working? I propose that there is one glaring problem…or one glaring problem and follow-on problem, stated as: Lack of comprehensive and recurring legal hold training supported by policy, followed by lack of internal enforcement of requirements to follow guidelines and policy.

The existence of legal holds and even eDiscovery seems to have followed a path similar to that painfully endured by what used to be called Records Management, or RIM…another field I am well acquainted with. RIM was seen for far too long as something to be done in ‘someone’s spare time’, if at all. For a long time, there were no guidelines, no consistent methodologies, and certainly no policies to enforce, or enforcement processes, for that matter. Slowly, RIM rose to the surface in corporate mindsets, mostly due to the herculean efforts of ARMA; corporations started to get wise because of an age-old business illness – pain in the financial regions of the corporate body. Loss of, or inability to find documents when needed became critical, especially due to the growth of ESI, or Electronically Stored Information. Companies simply had to do something, and they did. So it is with eDiscovery.

We are now certainly at the point where legal holds are seen as the primary source of and main tool for managing litigation or regulatory demands. But, once again, companies are simply not “biting the bullet”, “taking the bit in their teeth” or “reins in their hands” – please add your own favorite saying here – by investing the time, staff and resources to provide meaningful training. A simple onboarding speech and pointer to the eDiscovery policy (which everyone has, right?) or at least Information Management policy (again…?) is not enough. There must be structured training at all levels – employee, management, C-level, technical, and often-forgotten contractor/third party levels. And it must be ongoing – at least yearly refresher training is a must; more litigious companies may want to consider focused training at least semi-annually for those groups most likely to be involved in litigation, audit or regulatory requests. And, as opposed to (at least some) popular opinion, attorneys and corporate legal groups must be included in this training…perhaps them most of all. It is a fatal error to assume that all attorneys (especially transaction attorneys) are up-to-date on all legal hold processes and requirements; they must have access to, and reliance on some source that will help them remain current on those requirements, and quality training, by competent and knowledgeable trainers, is one great way to do so.

Then enforce that training, even though that can be a challenging task. One requirement is to hammer home the fact that anyone…anyone…who does not abide by legal hold requirements will face repercussions. The company/firm must clearly and emphatically state, within its eDiscovery policy and in all training sessions that violators, whether through negligence or willful malfeasance, will face punishments up to and including immediate removal from the company. Because litigation is such a serious issue, everyone involved must be thoroughly trained in their responsibilities and knowledgeable of the contents of a legal hold; and the company or firm is equally responsible to provide accessible and knowledgeable support personnel to competently answer all questions and/or concerns that any employee, officer or contractor may have regarding a specific legal hold or the process itself.

So, to lessen or remove the possibility of facing an irate and vengeful court because you or your company personnel failed to follow proper legal hold requirements, embed this rule for everyone: “Ask not what’s wrong with the court, ask why we didn’t train and support our own people.” Or something…anything…that will spur your company or law firm to get strong legal hold training processes in place, for everyone.

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