A legal hold, or litigation hold, is a legal action that involves an organization retaining records and documents for possible investigations or legal matters.
This legal procedure is designed to ensure the information relevant to a specific legal case is not altered, lost, or destroyed. Once a legal matter has been resolved, the legal hold ends and the organization no longer has to secure relevant records for that particular legal instance.
This legal procedure is necessary because it's unreasonable for legal teams to immediately collect relevant information from an organization and preserve it. The need to quickly seize and retain large volumes of information would require a legal team or department to employ dozens of legal and IT personnel. Furthermore, the immediate search and seizure of relevant records would be a massive, and possibly unnecessary, disruption to the affected organization. Not only would the physical actions of capturing records be disruptive, but the actual retention of information could be problematic if the legal matter ends up being resolved without further action.
In essence, a legal hold is a compromise that allows a legal team to work at a reasonable pace while minimizing disruptions for the organization in question. It ensures that relevant records are preserved without placing an unreasonable burden on the organization being investigated.
The Legal Hold Process
A legal hold is generated by some type of triggering event. This event could be an employee sustaining an injury on the job, a breach of contract, or a party seeking compensation for damages.
When the decision is made to issue a legal hold, a written notification is sent from a legal team or department to the appropriate custodians within an organization. This could be executive leadership, the human resources department, the IT department, or other company personnel. Because receiving parties may not have much legal training, the legal hold notice should be easy to understand. Many legal teams and departments use standard templates that avoid misunderstandings and steer clear of sophisticated jargon.
A typical legal hold notice instructs custodians to preserve a specific set of records in such a way that they cannot be modified, corrupted, or destroyed. Records typically include emails, digital documents, paper records, and logbooks. Relevant records also may include business-related text messages, company web pages, and social media posts. Some companies routinely destroy old records and documents. A legal hold stops this routine for records related to the potential legal action.
By law, the legal team or department that issued the hold must be notified by the custodian when the document has been received and read. Custodians must also inform the legal team that they have agreed to comply with the legal hold. If a confirmation is not issued, the legal team or department should follow up and potentially escalate the situation until a proper response is received.
Documents could be placed under a legal hold for days, weeks, months, or years. The legal team that issued the hold typically sends occasional reminders to ensure the records are being properly secured.
Sometimes, the scope of a legal hold will grow larger or smaller. If the legal team feels like a change in scope must happen, it will issue update notices that outline the new scope so that custodians can comply appropriately. Once the matter is resolved, the legal team should release the hold so that the custodians can move forward with their records as they see fit.
Legal Holds are a Common Challenge
Legal holds occur quite frequently, especially within large companies. It's not unusual for a large business to have dozens, or even hundreds, of ongoing legal holds. As you can probably imagine, complying with these legal holds in a large company is more than a full-time job and it typically requires multiple people. Paralegals or others who are trained on legal discovery matters are often responsible for managing a company's legal holds. This responsibility typically does not call for in-depth legal education.
An internal team responsible for managing legal holds often coordinates with the human resources and IT departments, as these department's typically hold records related to legal matters. This requires significant coordination among those involved.
Personnel managing various legal holds should document every action taken for each hold. Any changes to holds should also be recorded. Strong documentation can protect a company if the legal dispute proceeds to a courtroom.
Ultimately, legal holds are a protective measure for parties on both sides of potential litigation. The party being subjected to the hold simply needs to remain in compliance and keep proper documentation related to the hold.
MirrorWeb Can Be Your Legal Solutions Provider
At MirrorWeb, we understand the importance of a legal hold situation and have developed our record retention solutions with this importance in mind. If your company is looking to upgrade or adopt a compliant archiving solution, please visit our homepage to schedule a consultation.