Irish Court of Appeal Outlines Importance of “Litigation Holds” for Discovery
The Court of Appeal has confirmed that a party to civil proceedings in this jurisdiction must take reasonable steps to preserve relevant documents, clarifying whether and in what circumstances a party should implement (and a party’s solicitors might be obliged to advise) a so-called “litigation hold”. The Court advised that where relevant documentation is lost by reason of a litigant’s failure to take reasonable steps to preserve it, that litigant must, at a minimum, expect to be the subject of criticism.
The proceedings related to the alleged wrongful termination of the plaintiff’s employment at the defendant bank.1 There was a protracted disagreement between the parties in relation to the adequacy of the bank’s discovery. The plaintiff alleged that the bank had failed to preserve some documents central to the proceedings, depriving her of a fair trial of her claim. She sought to compel the bank to make further and better discovery or in the alternative to strike out its defence. The plaintiff was unsuccessful in the High Court and appealed.
Advancing her application in the Court of Appeal, the plaintiff argued there was a duty on the bank to preserve relevant documents in its possession. In response, the bank admitted that no “litigation hold” or “legal hold” had been put in place here and that relevant documents had been destroyed after the commencement of the proceedings, but offered no explanation for the failure to implement a litigation hold. Counsel for the bank submitted that there was no Irish authority on whether or in what circumstances a party might be required to put such a hold in place.
The Court of Appeal refused the plaintiff’s application but considered the preservation of documents and the value of a “litigation hold” for discovery purposes.
Collins J pointed out that the importance of discovery and its potential to assist a court in getting at the truth in contested cases is undermined if potentially relevant documents are destroyed while litigation is contemplated, with this point applying with even more force where litigation is underway.
Referencing other common-law jurisdictions that have expressly recognised a duty to preserve documents in such circumstances such as the United States2 and England & Wales,3 Collins J agreed with the guidance to practitioners in the CLAI Good Practice Discovery Guide (the “Guide”).4 It sets out a number of over-arching principles, including that “[p]arties should take all steps necessary to preserve sources of data as soon as they become aware of a matter which is likely to require discovery.” This is done by way of a legal hold. Collins J went on to say that the Guide makes it clear that this should not be a once-and-for-all process and that the legal hold may need to be modified “if it becomes apparent that the scope of the proceedings and/or all relevant information has expanded or indeed narrowed, (though any narrowing should be done with extreme caution).”
Parties should take reasonable steps
Collins J said litigants are obliged to take reasonable steps to preserve relevant documentation, including electronically stored information ("ESI"), so as to ensure its availability on discovery, and their legal advisors – whether internal or external – have a duty to advise their clients of this obligation.
He noted that what is reasonable will depend on all of the circumstances, including the nature and scope of the proceedings, the extent of potentially relevant documents, the number of potential custodians, the experience and resources of the parties and whether or not they are legally represented.
Whether and to what extent these issues have been addressed in prior correspondence might also be relevant. A party or its legal advisors could write at an early stage in litigation (or even before its commencement) identifying categories of documents likely to be the subject of a discovery request in due course and expressly putting the other party on notice of the need to take steps to preserve such documents. He noted that this is already frequently done in practice.
Citing corresponding English authority, Collins J indicated that a bank might reasonably be expected to have litigation hold procedures in place.
“One expects a major high street Bank in this day and age of electronic records and communication with an in house litigation department to have an efficient and effective information management system in place to provide identification, preservation, collection, processing, review analysis and production of its ESI in the disclosure process in litigation..”5
When does the duty to preserve arise?
As to when the duty arises, Collins J considered that in some circumstances the duty would arise before the formal commencement of proceedings but where the cut-off is to be drawn is likely to be fact dependent.
Collins J concluded that the bank ought to have addressed the issue of preservation in advance of any request for discovery being made and that there had been failures in its processes. However, he declined to strike its defence on the basis that there had been no “wilful default”, finding that the weight of legal authority indicated that some deliberate attempt to avoid the obligation to make discovery must be established before such an order could be made. He left open the question as to whether culpable conduct short of deliberate avoidance could suffice, saying this would require more detailed argument. He also said the plaintiff could revisit the issues around discovery at trial if necessary.
However, the Court also directed the defendant to file a further affidavit sworn by a member of its legal department setting out information on the steps (if any) taken by the bank to preserve documents following the commencement of the proceedings here and dealing with such issues as the bank’s policies or protocols on the issue, with the deponent to be made available for cross-examination at trial.
This decision is significant in setting out a clear requirement to implement and monitor a litigation hold at the outset of a dispute, being the first occasion on which the Irish courts have expressly articulated such a requirement, although practitioners have for some time sought to ensure that clients retain all potentially relevant documentation. While it is particularly important for large organisations to review and update their litigation hold procedures in light of this decision, occasional litigants and participants in regulatory processes should also take care to retain all potentially relevant documents, including ESI, wherever held and to suspend deletion and document destruction once litigation is likely or actually in being.
Also contributed by Emily Cunningham
- McNulty v The Governor & Company of the Bank of Ireland t/a Bank of Ireland Group  IECA 182.
- Zubulake v USB Warburg LLC 220 FRD 212 (2003) (US District Court, S.D. NY).
- Earles v Barclays Bank plc  EWHC 2500 (Mercantile).
- Commercial Litigation Association of Ireland, Good Practice Discovery Guide, v2.0 – November 2015.
- Earles v Barclays Bank plc  EWHC 2500 (Mercantile).
This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.
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