As you are likely aware, Litigation Holds are a critical tool that should be used within your organization to prepare and preserve evidence in the event of an accident, incident, or legal dispute. However, few businesses realize that sending a Preservation Notice to an opposing party in a dispute, a potential co-plaintiff, or other interested parties can be a powerful tool for dispute resolution and instigating a settlement.

Litigation Holds and Preservation Notices accomplish the same goal. Whereas a Litigation Hold instructs internal employees and contractors to preserve evidence, a Preservation Notice is sent to third parties to inform them of a claim and direct them to preserve evidence. The use of Preservation Notices with opposing or interested parties can produce several advantages:

1. It helps ensure that such evidence is available for discovery in the event of a trial, either from an opposing party or from a party that will later need to be served with a subpoena;

2. It is used prior to a formal demand letter to put the receiving party on notice of the scope and seriousness of the matter;

3. It is used after a formal demand but prior to filing suit to prompt the receiving party to get senior leaders and their legal team involved;

4. It provides a preview to the recipient of how onerous the discovery process is likely to be if the parties let the matter proceed to trial; 

5. By prompting a response, it can serve to flush out an opposing or interested party’s position; and

6. By tactically providing a preview of how a potential trial will play out, including the revelation of the recipient’s potential culpability and reputational risk, it can often prompt settlement discussions.

So how and when should you use this? Using Preservation Notices in the early stages of incident management, and when your company knows or suspects that it may have a claim against someone or that someone may have a claim against your company can often prompt a settlement, saving the cost, and uncertainty of trial.

At RR&A, we can advise your company about the strategic use of Preservation Notices and administer your Litigation Hold process in the event of an incident, accident, or dispute.