The phrase “spoliation of evi- dence” invokes thoughts of dis- carded pipes and compromised fire scenes. Even the greenest
of first party adjusters and subrogation
professionals are quick to ask an insured
if the physical artifacts related to a loss
are still available. Given that most documents and communications are now
transmitted and stored electronically, the
potential for spoliation of evidence exists
not only with physical artifacts, but also
with the preservation of documents and
electronically stored information (“ESI”).
In order to prevent a claim or defense al-
leging the spoliation of evidence, adjust-
ers and subrogation professionals should
be implementing litigation holds for all
claims where subrogation is pursued.
What is a litigation hold?
A litigation hold is a directive that relevant
documents and electronically stored information be preserved so that the documents and ESI remain available should
they be needed during future litigation.
The hold is intended to prevent the unintentional or intentional destruction of
information. Often times, litigation hold
directives are sent to adverse parties to
ensure that they do not destroy potentially
relevant information. However, the duty
to preserve is mutual and subrogation professionals should be mindful of the duty to
preserve all relevant documents and ESI as
soon as a subrogation claim is anticipated.
When should a litigation
hold be implemented?
Most jurisdictions require the parties to
take affirmative steps to preserve potentially relevant information as soon as litigation is anticipated. From a defendant’s
perspective, the obligation to implement
a litigation hold is often triggered by a
notice of claim letter, or formal service
In the subrogation context, the precise
date that litigation is anticipated may be
more difficult to ascertain. Adjusters often initiate subrogation investigations as
a matter of course, and even the involvement of a subrogation professional may
not necessarily indicate that litigation is
anticipated. It may take days or weeks to
determine whether a potential subrogation claim exists. As such, the precise
date on which a litigation hold should
be implemented is often a fact intensive
inquiry that is determined on a case by
case basis. A good practice is to implement a litigation hold no later than the
date that liability insurance information
is requested or formal notices of claim
are sent to potentially adverse parties.
Hold on to Your
Recoveries so They
By Jessica M. Skarin, Esq.