March 2006 Should you be concerned about spoliation? What is spoliation? It is not the condition of overly ripe fruit. In the nautical context, it is the seizure of neutral vessels at sea by a belligerent power in time of war. However, for most persons far from the ocean the term "spoliation" only will arise in a legal setting. As a legal term, spoliation is the intentional or reckless destruction or alteration of evidence potentially relevant in litigation. Once litigation is commenced, the parties have a duty to preserve information relevant to the issues in the lawsuit, whether contained in documents or in an electronic format. This duty also extends to preservation of information even before a lawsuit is commenced if the party knows or is on notice that the information may be relevant. A Federal Judge in Colorado has stated the obligation to preserve evidence for litigation in terms of whether "the party knew or should have known [the evidence] was relevant to pending, imminent, or reasonably foreseeable litigation." Of course, a court uses hindsight to determine whether a party should have known certain evidence was relevant to pending or not-yet-filed litigation. It is easily understood that a party who intentionally destroys incriminating evidence should suffer sanctions or penalties in the lawsuit as a consequence. However, courts also have imposed sanctions in situations where relevant evidence was destroyed unintentionally or as part of a company’s document retention/destruction policy. Sanctions the trial court may impose for spoliation can include dismissal of the offending party’s claims or defenses, entry of a default judgment, exclusion of testimony or application of the "adverse inference rule." The adverse inference rule permits the jury to draw the inference that the evidence destroyed would have been of use to the other party, which in some cases can be a significant factor in the jury’s decision. The Colorado Supreme Court recently affirmed a trial court’s sanctions against the Union Pacific Railroad Corporation for destruction of documents by the company in compliance with a document retention/destruction policy. An employee of Union Pacific was injured when he tripped on a loose rubber mat while descending the interior stairs of a locomotive. Within a week of the accident, the employee’s attorney notified UP that a personal injury claim would be filed. The documents reflecting UP’s investigation of the accident were inadvertently destroyed at the expiration of the company’s statutorily required 92-day document retention period. At trial, the court instructed the jury that it could draw an inference that the evidence contained in the destroyed documents would have been unfavorable to UP. The jury returned a verdict in favor of the employee for six million dollars. The adoption of a document retention policy is generally advisable. However, care must be taken to avoid destruction of documents or information in conformance with the policy that may be relevant in a pending or future legal proceeding. If relevant documents are destroyed, it then may rest with a court to decide whether destruction of the documents should result in sanctions. The consequences may be dire indeed if the court determines that you are guilty of spoliation.
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