A Preservation of Evidence Letter is Not Enough to Protect an Attorney or Their Client From Consequences for Spoliation of Evidence

Author: Roberta E. Nalbandian

Guest Editor: Robert Bernstein

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August 3, 2020 10:13am

A person or entity has an obligation before litigation is filed to preserve all relevant evidence if they know or reasonably should know that they will be sued.  Although most large corporate entities are aware of such obligations a small business owner or individual may not.  If the client and attorney have conducted a reasonable and diligent search of all relevant evidence in the hands of their client early on, they can eliminate or at least minimize sanctions that may be imposed should opposing counsel establish spoliation of evidence.  If the client’s conduct impacted potential evidence before counsel was retained, the attorney needs to know this at the outset, because it may impact the defense of the case. Prudent counsel should start educating their client and managing expectations upon discovery of a potential spoliation issue.

As defined in Williams v. Russ (2008) 167 Cal.app.4th 1215, “spoliation of evidence” is the destruction or significant alteration of evidence, or the failure to preserve evidence for another’s use in pending or future litigation.” This conduct is condemned because it can destroy fairness and justice, for it increases the risk of an erroneous decision on the merits of the underlying cause of action, and can also increase the costs of litigation as parties attempt to reconstruct the destroyed evidence or to develop other evidence, which may be less accessible, less persuasive, or both.  (Williams, supra, 167 Cal.App.4th at p.  820.)

Although there is no tort cause of action for negligent or intentional spoliation of evidence, it is considered an abuse of the discovery process and is sanctionable and subject to a broad range of punishment, including monetary, issue, evidentiary, and terminating sanctions.  (Civ. Pro §§ 2023.010(d), 2023.030 (a-d).   (Cedar-Sinai Med. Ctr v. Superior Court (1998) 18 Cal.4th 1, 12; Williams, supra, 167 Cal.App.4th, at p. 820)

The sanction(s) imposed must be tailored by the Court to the situation at hand.  Discovery sanctions are intended to remedy discovery abuse, not to punish the offending party. Accordingly, sanctions should be tailored to serve that remedial purpose, should not put the moving party in a better position than he would otherwise have been had he obtained the requested discovery, and should be proportionate to the offending party’s misconduct.  (Williams, supra, 167 Cal.App.4th, at p. 1224, citing McGiny v. Superior Court (1994) 26 Cal.App.4th 204, 210-212)

Insurance defense litigation attorneys typically have no control over the preservation of evidence until they are retained. They customarily send out a preservation of evidence letter upon receipt of the file, but they have an affirmative obligation to do more. This obligation to preserve evidence becomes more difficult as technology continues to advance. Even the simplest case can involve evidence storred on and generated by technology – cell phones, emails, texts, Facebook, iPads, Instagram, laptops, blogs, company websites, Twitter, etc.   Insurance defense attorneys need to identify all sources of potential evidence, and take reasonable measures to collect it. Relying on a technologically-challenged client to identify all the emails with limited search terms is potentially not a reasonable and diligent search.  A competent and diligent attorney needs to understand how their client retains documents. They need to  identify custodians, identify physical files and locations, identify all the technological sources, account for archiving, lost equipment, storage facilities, the impact of technology crashes and the logistics of upgrades in equipment.  Working with large corporations can provide an opportunity to develop search terms with their IT department and a plan to ensure a reasonable and diligent search. One can also instruct them to issue a litigation hold and evaluate any prior litigation holds issued by the company. For the individual or small business client counsel may consider having an IT vendor remotely access appropriate email accounts, to pursue agreed search terms.

Takeaway

Failure to conduct a reasonable and diligent search of relevant evidence at the outset of an attorneys involvement in case can negatively impact strength of the case, limit discovery opportunities, and subject the client to a spoliation of evidence claim, which can be raised by the opposing at various points during litigation, including trial. (CACI 204) In addition, an attorney can be subjected to disciplinary proceedings imposed by the California State Bar.  (Business & Professions Code § 6106; Cedar-Sinai Med. Ctr v. Superior Court (1998) 18 Cal.4th 1, 12-13). In the worst situations, there are potential criminal penalties for spoiling or deleting evidence that is relevant to a lawsuit.  (Penal Code § 135.)

The collection of relevant evidence from a client requires an understanding of the client’s resources, business operations, and technological sophistication. Performing this investigation at the outset can critical to the success of a case and should be part of an attorney’s initial investigation and handling activities.

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