by Tom Turner
Large corporations are used to facing legal holds on a regular basis. Despite this, most corporations do not know when they can legally return to their normal policy. It’s especially confusing if the corporation doesn’t have a data retention policy to return to.
The safest time to return to normal policy is when your in-house or outside counsel tells you to do so. The question then becomes: how do they determine when a legal hold can be removed?
Custodians can be released from a legal hold individually. Two things must happen before a custodian is released from a legal hold. First, all of the requested data must have been preserved and collected. Second, there must be no ongoing obligation to produce new information from that custodian. Any time there is an ongoing obligation or active investigation or inquiry, the legal hold cannot be removed.
Corporations can also remove legal holds for all custodians involved in a matter when the litigation or inquiry is complete or has been fully responded to. For example, if a case settles you may be able to remove the legal hold.
Many corporations struggle to release custodians from legal hold in a timely manner. This typically occurs when they are attempting to manage all of their legal holds through Microsoft Excel and Office and do not have an easy way to track cases or notify custodians that the legal hold is over.
This becomes a serious problem in corporations that have a group of custodians that is constantly under legal hold. There may be days, weeks or even months when a custodian does not have an obligation to hold their data, but the custodian won’t be notified before another legal hold begins. This means the corporation misses an opportunity to delete that custodian’s data. We call this resting liability or liability laying in wait. For example, DSi has a client that has at least 40 TB of resting liability. Some of it is appropriately on hold, but a lot of it is still on hold because they have not kept good records about when and why the data was collected. An audit is needed to determine what they can delete.
Like our client, most large corporations struggle with resting liability. It is costly for several reasons: 1.) the cost to retain the data, 2.) the risk that data that could have legally been deleted will now be collected and used against you in litigation, and 3.) the cost to process the data again in future cases.
Legal hold software simplifies this process and makes it easy to track legal holds and release custodians. If your corporation is facing many legal holds, you may forget to ask outside counsel or even your in-house attorneys if it is safe to remove a legal hold. Software with a periodic reporting mechanism will give you a list of all custodians and what matters they are associated with that you can bring to your attorneys to see if it is safe to remove the legal hold.