The duty to preserve evidence starts the moment you reasonably anticipate litigation, not when a complaint is filed. Once it kicks in, you have to stop routine destruction of any records, data, or physical items that could be relevant to the dispute. Ignore it and a court can order you to pay the other side’s fees, bar you from using certain evidence, tell the jury to assume what you destroyed would have hurt your case, or in serious situations enter judgment against you outright.
When the Duty Begins
Courts apply an objective test. The question is not whether you personally expected a lawsuit, but whether a reasonable person in your position would have foreseen one. The claim does not have to be certain or even probable in a statistical sense. It just has to be more than a remote possibility given what you knew or should have known.
Federal Rule of Civil Procedure 37(e) frames the standard around information that “should have been preserved in the anticipation or conduct of litigation.”1Legal Information Institute. Federal Rules of Civil Procedure Rule 37 – Failure to Make Disclosures or to Cooperate in Discovery Judges look at the totality of the circumstances. The duty can attach well before anyone drafts a complaint, and both a party and its attorneys are expected to recognize that moment and act.
Your own paperwork can raise the bar. If your document retention policy says records must be preserved when litigation is foreseeable, a court will hold you to that language. Continuing to destroy records under a routine retention schedule after you knew a dispute was brewing has been found to constitute gross negligence.2United States District Court for the District of Nebraska. Litigation Holds: Ten Tips in Ten Minutes
Events That Trigger the Duty
Some events leave no room for argument. A demand letter is the clearest, because it states a legal claim or an intent to sue. A cease-and-desist letter or a formal cure notice carries the same weight. Being served with a complaint or summons is even more obvious, though by then you are already behind if you haven’t started preserving.
Serious incidents trigger the duty on their own, without any letter. A workplace injury, a product malfunction that hurts someone, a chemical spill, or a significant vehicle accident are all situations where a reasonable person would expect a claim to follow. Equipment, samples, and physical items connected to the incident have to be set aside from the moment it occurs, not after someone thinks to send a letter.
Lower-key situations can also cross the line. Specific threats of a lawsuit during a negotiation, a pattern of complaints about the same product defect, or a terminated employee’s statement about suing all move things past speculation. Specificity is what matters. Vague unhappiness from a customer probably does not trigger the duty. A written statement identifying a specific harm and demanding compensation almost certainly does.
Administrative Complaints and Investigations
You do not have to wait for a civil lawsuit. An EEOC charge of discrimination triggers the employer’s preservation duty no later than when it receives the charge.3U.S. Equal Employment Opportunity Commission. Chapter 5 Agency Processing of Formal Complaints The same goes for filings with state civil rights agencies. Regulatory inquiries, audits, and internal investigations into financial or compliance issues also put you on notice that enforcement or litigation may follow.
What You Have to Preserve
The scope covers anything that could be relevant to the anticipated dispute. It splits into two broad categories: electronically stored information and physical evidence.
Electronically stored information includes emails, text messages, voicemail, word processing and spreadsheet files, social media content, data on phones, computers, thumb drives, and cloud platforms, plus the metadata showing when files were created and modified and by whom.4U.S. Department of Justice. Recommendations for Electronically Stored Information (ESI) Discovery Production in Federal Criminal Cases Metadata often tells a story the document itself does not, so preserve the underlying file rather than just a printout.
Physical evidence includes paper records, logbooks, equipment involved in an incident, product samples, surveillance footage on physical media, and any tangible object connected to the dispute. The sanctions rules for physical evidence differ from those for electronic data, which matters when things go wrong.
Identifying who holds relevant data is as important as identifying what data exists. These custodians are the people who created, received, or control the information. Mapping them early prevents gaps.
Slack, Teams, and Other Auto-Delete Tools
Modern messaging platforms create a specific trap. Slack, Microsoft Teams, Signal, and Google Chat often have auto-delete features on by default. The Federal Trade Commission has said messages on these platforms are subject to the same preservation obligations as email and paper documents.5Federal Trade Commission. Slack, Google Chats, and other Collaborative Messaging Platforms Have Always Been and Will Continue to be Subject to Document Requests Once the duty is triggered, automatic deletion has to be turned off, and in some situations you may need to stop using certain apps altogether. The obligation can extend to employee-owned devices if those devices hold relevant messages.
Putting a Litigation Hold in Place
A litigation hold is the formal mechanism for pausing normal document destruction. Once triggered, distribute a written hold notice to every custodian who might have relevant information. Make it specific: which types of records, on what topics, from what time periods, in what formats. Instructions like “save anything important” invite inconsistent compliance.
The practical steps mean coordinating with IT to suspend automated destruction. Pause auto-delete on email servers. Disable scheduled overwrites of backups. Make sure cloud platforms retain data that would otherwise roll off. Have every custodian acknowledge receipt of the notice and log the acknowledgments. That log becomes your evidence of good-faith compliance if the preservation effort is later questioned.
Sending the notice and moving on is one of the most common mistakes. Courts expect attorneys to follow up and confirm the hold was actually implemented, send periodic reminders, and update the scope as the case develops.2United States District Court for the District of Nebraska. Litigation Holds: Ten Tips in Ten Minutes Data created after the hold issues can also fall within scope if it relates to the dispute.
Proportionality: How Much Is Enough
The duty is not unlimited. Federal Rule 26(b)(1) requires discovery to be proportional to the needs of the case, weighing the amount in controversy, each party’s resources and access to information, and whether the burden of preservation outweighs its likely benefit.6Legal Information Institute. Federal Rules of Civil Procedure Rule 26 – Duty to Disclose; General Provisions Governing Discovery You have to take reasonable steps, not heroic ones. A small business in a $50,000 contract dispute is not expected to spend $200,000 on forensic data collection. If you took reasonable steps and some information was still lost, you cannot be sanctioned for that loss. Reasonableness is judged on what you knew at the time.
What Happens If You Fail to Preserve
Consequences depend on two things: whether the evidence was electronic or physical, and whether the destruction was intentional.
Electronic Evidence Under Rule 37(e)
Rule 37(e) sets up a two-tier framework for lost electronically stored information. Before any sanctions apply, the court has to find that the information should have been preserved, that it was lost because a party failed to take reasonable steps, and that it cannot be recovered through other means.1Legal Information Institute. Federal Rules of Civil Procedure Rule 37 – Failure to Make Disclosures or to Cooperate in Discovery
- Prejudice without intent, under Rule 37(e)(1). If the other side was harmed but there is no evidence of intentional destruction, the court may order measures “no greater than necessary to cure the prejudice.” That can mean paying the other side’s attorney fees on the motion, precluding certain evidence, or letting the jury hear about the failure to preserve.
- Intent to deprive, under Rule 37(e)(2). If the court finds the party deliberately destroyed information to keep the other side from using it, the available sanctions escalate. The court may presume the lost information was unfavorable, instruct the jury to draw that presumption, dismiss the case, or enter a default judgment.1Legal Information Institute. Federal Rules of Civil Procedure Rule 37 – Failure to Make Disclosures or to Cooperate in Discovery
The distinction matters. Negligent or even grossly negligent loss of data limits the court to remedial measures proportional to the harm. Only intentional destruction unlocks adverse inference instructions and case-ending orders.
Physical Evidence
Rule 37(e) applies only to electronically stored information. When tangible evidence is destroyed, courts rely on their inherent authority to sanction conduct that abuses the judicial process. That inherent power is not bound by the structured framework of Rule 37(e), so courts have broader discretion and can impose harsh sanctions, including adverse inferences and dismissal, without necessarily finding intent to deprive. In some jurisdictions the risks of destroying physical evidence are actually higher than for electronic data.
When the Duty Ends
The duty does not last forever, but it lasts longer than most people assume. Keep preserving until the litigation is fully resolved. That means not just a verdict or settlement, but the exhaustion of any appeals. If the losing party still has time to appeal, the duty remains. If related claims from similarly situated parties are out there, the documents may need to be held even after one case concludes.
Once the matter is truly over, formally release the hold in writing, document the date and reason, and notify custodians that they can resume normal retention practices. Before releasing anything, confirm the same documents are not covered by a hold in another pending or anticipated matter. Prematurely lifting a hold and destroying records that turn out to be relevant to a second claim creates the same spoliation exposure all over again.