In the aftermath of Sarbanes-Oxley, concerns over discovery and spoliation have catapulted to the priority lists of most companies, specifically regarding what is considered pending or potential investigations or litigation. After all, severe penalties, including the possibility of jail time, are at stake for those involved in the destruction of relevant documents. Companies, therefore, must balance such severe consequences with proper management of all records, including electronic ones, during litigation. A central and difficult issue surrounding an otherwise sound retention policy is the
determination of how and what records must be held from destruction, especially when faced with determining what is considered “potential” (or threatened) litigation or investigations as opposed to clear “pending” litigation. This article, thus, identifies a duty to preserve continuum that should provide companies a set of parameters for triggering a “legal hold” on destruction of records subject to pending or potential litigation or investigations.
John J. Isaza, Esq.