The process by which an organization preserves information when litigation is pending or reasonably anticipated is a critical aspect of legal and regulatory compliance. This preservation obligation suspends routine document destruction policies and ensures that relevant data remains available for potential discovery. For example, if a company anticipates a lawsuit related to a product defect, it must implement measures to retain all communications, designs, testing results, and customer feedback related to that product.
Failure to properly execute this preservation can result in severe penalties, including monetary fines, adverse inferences drawn by the court, and even sanctions. A robust strategy demonstrates a commitment to ethical conduct, transparency, and cooperation with the legal process. Historically, this obligation was primarily managed through manual processes, but advances in technology now allow for more automated and defensible preservation workflows.
