Spoliation of evidence Featured

7:00pm EDT November 25, 2008

Spoliation is the intentional or negligent withholding, hiding or destruction of relevant evidence in a legal proceeding.

“Corporate officers need to be cognizant of spoliation issues from the time they become aware of a potential claim,” says Irena Leigh Norton, a partner in the litigation department at Shulman Hodges & Bastian LLP. “Waiting until a suit is filed is often too late.”

Smart Business talked to Norton about the impact and consequences of evidence spoliation.

What types of evidence are most susceptible to spoliation claims?

Spoliation occurs when a company has lost or destroyed evidence that it knew — or should have known — to preserve for a lawsuit. Awareness of potential litigation imposes a duty on the manager or the corporate officers to preserve evidence that may relate to that lawsuit.

The evidence in question might include electronic records like e-mail, personnel files and physical objects. In the case of electronic evidence, specific federal laws address the preservation of backup materials and e-mail correspondence. Sometimes it’s not even enough to preserve an electronic copy of e-mail. In discovery, the opposing counsel may want to examine the computer hard drive — and if you have failed to preserve that, you may have created a potential spoliation issue.

What sanctions might be imposed by a court?

Generally, spoliation of evidence is something that is proven by way of a motion or declaration to the court. One party in the lawsuit requests a sanction be imposed on the party that cannot provide pertinent evidence.

The scope of that sanction depends on a determination of why the evidence is missing. Is it missing because it was accidentally destroyed through no fault of the defendant? Was it purposely destroyed? You will face a much higher level of sanction in the latter case.

Sanctions could be anything from having an evidentiary presumption imposed against your side or not being able to dispute certain issues all the way up to striking an answer and imposing a default judgment. Sometimes monetary sanctions are awarded, as well.

Can you cite an example of evidence spoliation?

In an employment case alleging sexual harassment, there may be an issue about whether certain communications between a manager and the plaintiff employee were preserved.

In one instance, the hard drive crashes and pertinent e-mails are unable to be resurrected. Nothing intentional was done. If that complainant tries to seek an evidentiary sanction, he or she will have a really hard case to make. In all likelihood, a court will not impose evidentiary sanctions.

In contrast, if the exchange of e-mail is deleted from the system by the manager, then there may be a presumption that it was done purposely. The jury will be informed as such, and the defendant will be barred from making certain evidentiary and testimony objections. Depending on the severity of the event, the defendant may have a liability finding against him or her. There is not an assumption of guilt, but it’s an issue that courts take testimony on, and there may be a full hearing with expert testimony on how the materials were deleted and why no backup is available.

For instance, if deleting information from a server is a four-step process that requires a supervisory password, then evidence suggests that a corporation or officer purposely ordered the information to be deleted, because it’s not something that could be done by accident.

A judge is not likely to impose sanctions for vagaries of electronics breaking down or for accidents. But there are likely sanctions for purposeful acts, and there may be substantial repercussions.

Are spoliation claims subject to separate causes of action?

Under California and federal law, there is generally not a separate cause of action for spoliation of evidence.

If you are under criminal investigation, however, criminal liabilities may arise because the standards are different. Additionally, if your company does business in other states, there may be case law supporting a separate claim for spoliation or destruction of evidence in that jurisdiction.

What steps can a company take to discourage spoliation of evidence?

Every company should have policies and procedures in place regarding the preservation and destruction of its business records. High-level officers should be aware when potential claims arise and immediately take steps to preserve all potential evidence.

Instruct employees to maintain not only computer-based information but also physical devices — like computer hard drives — that would have potential relevance to a lawsuit. Even if you cannot foresee a lawsuit, as soon as you’re served, those steps must be taken.

Most importantly, take every precaution to assure that courts have access to all information — bad facts as well as good facts — so you have the best opportunity to represent your company’s interests.

IRENA LEIGH NORTON is a partner in the litigation department at Shulman Hodges & Bastian LLP. Reach her at inorton@shbllp.com or (949) 340-3400.