Litigation Hold vs. Retention Hold

Attribute	Litigation Hold	Retention Hold
Definition	Legal hold placed on documents and data relevant to a specific legal case or investigation	Hold placed on documents and data for a specified period of time for business or regulatory purposes
Purpose	To preserve potentially relevant information for legal proceedings	To retain information for compliance, business, or operational reasons
Trigger	Legal action or investigation	Regulatory requirement or business policy
Duration	Until the legal matter is resolved	For a specified period of time as per policy or regulation
Scope	Specific to the legal case or investigation	Applies to all relevant documents and data within the organization

Definition

Litigation hold and retention hold are both legal processes that involve preserving certain documents and data for potential future legal proceedings. Litigation hold is typically implemented when a company is facing litigation or anticipates litigation in the near future. It requires the preservation of all relevant documents and data that may be used as evidence in the case. Retention hold, on the other hand, is a broader process that involves preserving documents and data for a specified period of time, regardless of any pending litigation.

Scope

One key difference between litigation hold and retention hold is the scope of the preservation requirements. Litigation hold is more specific and targeted, focusing on preserving only the documents and data that are directly relevant to the pending or anticipated legal proceedings. In contrast, retention hold applies to a wider range of documents and data, often encompassing all records within a certain category or time frame. This broader scope can make retention hold more challenging to implement and manage, as it requires a more comprehensive approach to document preservation.

Timing

Another important distinction between litigation hold and retention hold is the timing of their implementation. Litigation hold is typically put in place as soon as litigation is anticipated or initiated, requiring immediate action to preserve relevant documents and data. In contrast, retention hold is often implemented as part of a company's regular document retention policy, with documents and data being preserved for a predetermined period of time before being disposed of. This difference in timing can impact the level of urgency and resources required for each process.

Legal Requirements

Both litigation hold and retention hold are subject to legal requirements and regulations that govern the preservation of documents and data. Litigation hold is specifically tied to the legal proceedings at hand, with courts often issuing orders or guidelines for the preservation of evidence. Failure to comply with a litigation hold order can result in severe legal consequences, including sanctions or adverse inference instructions. Retention hold, on the other hand, is more closely tied to a company's internal policies and procedures, although it may also be subject to industry-specific regulations or guidelines.

Costs and Resources

Implementing and managing litigation hold and retention hold can both be costly and resource-intensive processes for companies. Litigation hold requires the identification, collection, and preservation of specific documents and data that are relevant to the legal proceedings. This can involve significant time and effort from legal and IT teams, as well as potential costs for external consultants or e-discovery services. Retention hold, while less targeted, still requires ongoing monitoring and management of documents and data to ensure compliance with retention policies. Companies may need to invest in document management systems or other tools to facilitate the retention hold process.

Risks and Consequences

Failure to properly implement and manage litigation hold and retention hold can have serious risks and consequences for companies. In the case of litigation hold, failure to preserve relevant documents and data can result in spoliation sanctions, where the court penalizes the party for destroying or failing to preserve evidence. This can severely impact the outcome of the legal proceedings and damage the company's credibility. Similarly, failure to comply with retention hold requirements can lead to legal and regulatory risks, including fines or penalties for non-compliance with document retention policies. Companies must carefully consider the risks and consequences of both processes and take proactive steps to ensure compliance.

Conclusion

In conclusion, litigation hold and retention hold are both important processes for preserving documents and data in the context of legal proceedings. While litigation hold is more specific and targeted, focusing on evidence relevant to pending or anticipated litigation, retention hold is a broader process that applies to a wider range of documents and data. Both processes have legal requirements, costs, and risks associated with them, and companies must carefully consider the implications of each when implementing document preservation strategies. By understanding the differences between litigation hold and retention hold, companies can better navigate the complexities of document preservation and ensure compliance with legal and regulatory requirements.