When a Litigation Hold Is Received, What Must Management Do?

When a litigation hold is received, management must take immediate, documented steps to preserve potentially relevant information and prevent its routine destruction or alteration. This generally includes identifying the scope of the matter, determining relevant custodians and data sources, issuing or implementing the hold, suspending applicable deletion and disposition processes, monitoring compliance, and maintaining records of preservation activities.

A litigation hold—also called a legal hold—is used when litigation is pending or reasonably anticipated. The exact preservation obligations depend on the facts of the matter, applicable law, and the organization’s legal counsel. A hold should be appropriately scoped rather than treated as an instruction to preserve every piece of information in the organization.

In short: when a litigation hold is received, management must stop relevant information from being routinely destroyed, communicate preservation requirements, identify where relevant information resides, and maintain a defensible process until the hold is formally released.

What Is a Litigation Hold?

A litigation hold is a directive requiring an organization and appropriate custodians to preserve information that may be relevant to pending or reasonably anticipated litigation. It can apply to paper records as well as electronically stored information (ESI), depending on the scope of the matter.

Managing relevant documents becomes particularly important when information exists across email, shared drives, cloud applications, collaboration platforms, databases, mobile devices, and other business systems.

A litigation hold is one type of legal hold. The purpose is to prevent routine retention and deletion practices from destroying potentially relevant information after a preservation obligation has arisen.

When Is a Litigation Hold Triggered?

A litigation hold may be appropriate when litigation is pending or when litigation is reasonably anticipated. The precise trigger and scope should be determined with appropriate legal guidance based on the circumstances of the matter.

The Sedona Conference describes the preservation obligation as requiring reasonable and good-faith steps to preserve potentially relevant electronically stored information once litigation is reasonably anticipated. It also emphasizes that preservation should be appropriately scoped rather than requiring organizations to freeze all electronic information.

Why Is a Litigation Hold Important?

A litigation hold helps an organization preserve potentially relevant evidence and demonstrate that it took reasonable steps to comply with its preservation obligations.

• Preserves potentially relevant information: Reduces the risk that relevant records are destroyed through routine processes.
• Reduces spoliation risk: Helps prevent inappropriate destruction or alteration of potentially relevant evidence.
• Creates accountability: Clearly communicates preservation responsibilities to custodians and responsible teams.
• Supports defensibility: Documentation can help demonstrate what preservation steps were taken and when.
• Improves coordination: Legal, records management, IT, compliance, and business teams can work from a defined process.

Failure to preserve potentially relevant information can create significant legal risk. The consequences depend on the jurisdiction, facts, applicable rules, and the nature of the preservation failure.

What Does Management Do When a Litigation Hold Is Received?

Management should treat receipt of a litigation hold as a trigger for a controlled preservation process rather than simply forwarding an email to employees.

1. Confirm the Scope of the Hold

First, determine what the hold covers. The scope may include:

• Specific claims or legal issues
• Relevant date ranges
• Specific business functions
• Relevant employees and other custodians
• Relevant documents and records
• Email and other electronically stored information
• Shared drives and cloud repositories
• Collaboration platforms and messaging systems
• Business applications and databases
• Mobile devices or other relevant data sources

Scope matters because preservation should focus on information that may be relevant to the matter rather than indiscriminately freezing every corporate record.

2. Identify Custodians and Data Sources

Management should work with legal and relevant operational teams to identify the people and systems that may possess potentially relevant information.

A custodian can be an employee, contractor, former employee, executive, or another person with relevant information in their possession, custody, or control.

Data sources can extend beyond corporate email. Depending on the matter, they may include:

• Email mailboxes
• Shared network drives
• Cloud storage
• Microsoft Teams or other collaboration platforms
• Business applications
• CRM systems
• Financial systems
• Mobile devices
• Text or messaging applications used for business
• Paper records

3. Issue or Communicate the Litigation Hold Notice

The organization should communicate the preservation obligation to the appropriate custodians and explain what they must preserve.

A useful litigation hold notice normally identifies the matter, explains the preservation obligation, describes the categories of potentially relevant information, identifies who can answer questions, and provides instructions for preserving information.

Current legal-hold workflows commonly include issuing notices, tracking acknowledgments, sending reminders, and documenting compliance.

4. Suspend Applicable Deletion and Disposition Processes

When a hold applies to information that would otherwise be deleted or disposed of, the organization should suspend the applicable routine processes for that information.

This can include reviewing:

• Email deletion policies
• Automated purge rules
• Chat or messaging expiration
• Document retention workflows
• Records disposition schedules
• Application-level deletion rules
• Relevant backup or overwrite processes

The suspension should be appropriately scoped to the information covered by the preservation obligation. A litigation hold does not automatically require an organization to stop every records-management activity across the enterprise.

5. Preserve Potentially Relevant Information

Management should ensure that reasonable preservation measures are implemented for information within the scope of the hold.

For example, Microsoft documents that a Litigation Hold can preserve mailbox content, including deleted items and original versions of modified items, depending on the configured environment and hold settings.

The appropriate technical preservation method depends on the systems involved, the nature of the information, and the organization’s legal and IT requirements.

6. Track Acknowledgments and Compliance

A defensible litigation hold process should not end when the notice is sent.

Management should track:

• Who received the notice
• Who acknowledged the notice
• Who has not acknowledged it
• Reminder and escalation activity
• Changes to custodians
• Changes to relevant systems
• Preservation actions taken
• Potential preservation incidents

Automated legal-hold platforms commonly provide notice tracking, reminders, dashboards, and audit trails for these activities.

7. Maintain Documentation

Documentation should show how the organization responded to the preservation obligation. Depending on the matter, records may include the hold notice, custodian list, acknowledgments, reminders, system preservation actions, exceptions, and release documentation.

Documentation creates a clearer record of the organization’s preservation process and can support defensibility if the process is later challenged.

What Happens to Records Management When a Litigation Hold Is Received?

The relevant disposition process is suspended for information covered by the litigation hold. Normal records-management activities may continue for information outside the scope of the hold, subject to applicable policies and legal requirements.

Records-management programs normally include retention and disposition rules. A hold temporarily changes how those rules are applied to information that must be preserved.

For example, the U.S. Department of Health and Human Services describes a records hold as a temporary suspension of normal disposition practices and states that records subject to the hold must be retained while the hold is active.

Litigation Hold vs. Records Retention

The two processes should work together. A well-designed records-management program makes it easier to identify what information exists, where it resides, and what normal disposition rules would otherwise apply.

What Is the Records Lifecycle?

A common records-management lifecycle consists of creation or receipt, maintenance and use, and disposition.

1. Creation or receipt: Information is created or received during business activities.
2. Maintenance and use: The information is stored, accessed, maintained, and used.
3. Disposition: Information is either destroyed according to an approved schedule or preserved as required.

A litigation hold can interrupt the normal disposition stage for information that falls within its scope.

Federal Records and Litigation Holds: What Is the Difference?

Federal-record requirements are a distinct records-management topic and should not be treated as interchangeable with general corporate litigation-hold requirements.

What Is the Definition of a Federal Record?

Under 44 U.S.C. § 3301, a federal record generally includes recorded information made or received by a federal agency under federal law or in connection with public business and preserved or appropriate for preservation as evidence of the agency’s organization, functions, policies, decisions, procedures, operations, or other activities.

This federal definition applies to U.S. federal agencies. Private organizations should not assume that the federal-record classification automatically determines their own records-retention obligations.

What Are Temporary and Permanent Federal Records?

Federal records may be categorized according to approved records schedules and applicable federal records-management requirements. Broadly, records may be temporary or permanent depending on their authorized disposition.

• Temporary records: Records authorized for destruction after the applicable retention period.
• Permanent records: Records determined to have sufficient historical value for permanent preservation.

A litigation or legal hold can require information to be preserved beyond its ordinary disposition point when that information falls within the applicable preservation obligation.

What Are Examples of Records, Non-Records, and Personal Materials?

Examples of Business Records

• Final reports
• Approved policies
• Business correspondence
• Transaction records
• Official decisions and approvals
• Documents that provide evidence of business activities

Examples of Non-Record Materials

Examples may include duplicate copies maintained only for convenience, reference materials, or transitory information that does not document business activity. Classification depends on the organization’s policies and applicable requirements.

Examples of Personal Materials

Personal materials generally relate to an individual’s private activities rather than official business. Whether a particular item qualifies as personal material depends on the applicable records-management framework and the circumstances.

During a litigation hold, employees should follow the organization’s legal and preservation instructions rather than independently deciding that potentially relevant information can be deleted.

What Information May Need to Be Preserved?

Depending on the matter, potentially relevant information may exist in many locations.

The relevant sources depend on the claims, custodians, date range, systems, and preservation requirements for the specific matter.

What If Records Are Inadvertently Destroyed After a Litigation Hold?

If potentially relevant information is inadvertently destroyed after a litigation hold, the issue should be escalated immediately to the organization’s legal team and appropriate records or IT personnel.

The organization should document what happened, determine what information was affected, assess whether additional copies or versions exist, and follow counsel’s instructions for remediation and disclosure.

The legal consequences of loss or destruction depend on the applicable rules, the circumstances, the relevance of the information, and whether reasonable preservation measures were taken.

Organizations should avoid attempting to reconstruct or conceal a preservation incident without appropriate legal guidance.

What Happens When a Litigation Hold Is Lifted?

A litigation hold should be formally released when the applicable preservation obligation has ended, based on a determination by the responsible legal authority.

The release process may include:

1. Confirming that the hold can be released.
2. Documenting the release decision.
3. Notifying affected custodians.
4. Informing IT and records-management teams.
5. Updating hold-management systems.
6. Restoring applicable retention and disposition processes.
7. Maintaining required documentation of the hold and release.

Lifting a hold does not necessarily mean that all preserved information should immediately be deleted. The information may remain subject to other retention, legal, regulatory, or business requirements.

Common Challenges in Litigation Hold Management

1. Identifying All Relevant Custodians

Relevant information may exist outside the most obvious employees or departments. Custodian identification should therefore be based on the facts and scope of the matter.

2. Finding Distributed Data

Modern organizations store information across email, cloud platforms, collaboration tools, mobile devices, shared drives, and business applications.

3. Managing Large Data Volumes

Large organizations may have enormous quantities of information, making manual hold administration difficult and increasing the importance of structured workflows.

4. Tracking Employee Acknowledgments

Using spreadsheets and email alone can make it difficult to determine who has acknowledged a hold, who needs reminders, and which obligations remain outstanding.

5. Handling Employee and System Changes

Employees leave organizations, change roles, devices are replaced, and applications are migrated. The hold process should account for these changes.

6. Coordinating Legal, IT, and Records Management

Legal teams may define the preservation requirement while IT, records-management, compliance, and business teams implement technical and operational controls. Clear ownership is essential.

Best Practices for Litigation Hold Management

• Define a clear legal-hold process: Establish responsibilities before a litigation trigger occurs.
• Maintain a custodian inventory: Keep accurate information about employees and relevant systems.
• Map important data sources: Know where business information is stored.
• Automate notifications and reminders: Reduce manual tracking of acknowledgments.
• Document preservation actions: Maintain an auditable history of key actions.
• Review the scope regularly: Update the hold when the facts or matter change.
• Train employees: Make preservation responsibilities clear.
• Coordinate with IT: Ensure applicable deletion and retention controls are addressed.
• Use proportional preservation: Preserve potentially relevant information without unnecessarily freezing unrelated data.
• Document the release: Formally close the hold when authorized.

Automated data identification and processing can help reduce manual administrative work, but technology should operate within the preservation requirements established for the matter.

Litigation Hold Management KPIs

How Technology Can Improve Litigation Hold Management

Legal-hold technology can centralize notices, custodian information, acknowledgments, reminders, preservation tracking, and audit trails.

Modern platforms commonly emphasize:

• Centralized hold management
• Automated custodian notifications
• Automated reminders and escalation
• Custodian questionnaires
• Preservation tracking
• Audit trails
• Role-based access controls
• Integration with enterprise data sources
• Dashboards and compliance reporting

For example, OpenText’s current legal-hold offering highlights notices, acknowledgments, custodian management, preservation, dashboards, audit trails, and role-based controls.

Other legal-hold platforms are also using AI to help identify relevant custodians and data while reducing unnecessary over-preservation.

Can AI Help With Litigation Hold and Records Management?

AI can assist with litigation-hold administration and records governance, but it should support—not replace—legal judgment.

Potential applications include:

• Classifying documents and communications
• Identifying potentially relevant information
• Finding patterns across large data collections
• Helping identify custodians or data sources
• Automating notifications and reminders
• Summarizing preservation activity
• Improving search and information discovery
• Supporting audit and compliance reporting

AI output should be subject to appropriate human review, governance, access controls, and validation, particularly where legal preservation obligations are involved.

How Emagia Supports Intelligent Data and Financial Operations

Emagia provides AI-powered digital finance and data automation capabilities focused primarily on financial operations and enterprise information workflows.

For organizations using Emagia alongside broader enterprise governance and legal processes, intelligent document and data processing can help structure information that would otherwise require substantial manual handling.

Its capabilities can support areas such as:

• Intelligent data capture
• Document processing
• Financial information extraction
• Enterprise workflow automation
• Data classification and organization
• Audit-oriented information visibility

Intelligent data capture can help organizations process large volumes of business information more efficiently. However, organizations should use dedicated legal-hold and eDiscovery controls where those capabilities are required.

Emagia’s broader AI-powered Order-to-Cash automation capabilities are focused on financial workflows rather than serving as a replacement for a dedicated legal-hold platform.

Frequently Asked Questions About Litigation Holds

When a litigation hold is received, what must management do?

Management should immediately preserve potentially relevant information, identify the scope and custodians, communicate preservation requirements, suspend applicable destruction processes, monitor compliance, and document the response. The exact steps depend on the matter and applicable legal requirements.

What is a litigation hold?

A litigation hold is a directive requiring an organization and appropriate custodians to preserve potentially relevant information when litigation is pending or reasonably anticipated.

Does a litigation hold mean all records must be preserved?

No. A litigation hold generally applies to information that may be relevant to the matter. Preservation should be appropriately scoped and reasonable rather than automatically freezing every record in the organization.

What happens to the records disposition process when a litigation hold is received?

Routine disposition is suspended for information covered by the hold. Records outside the scope of the hold may continue to follow applicable retention and disposition requirements.

Who is responsible for a litigation hold?

Responsibility varies by organization, but legal teams commonly direct the preservation process while management, custodians, IT, records management, compliance, and other stakeholders carry out their respective responsibilities.

What information can be subject to a litigation hold?

Depending on the matter, potentially relevant information may include email, documents, spreadsheets, databases, cloud files, collaboration messages, mobile-device information, business application data, and physical records.

What should an employee do after receiving a litigation hold notice?

The employee should follow the instructions in the hold notice, preserve potentially relevant information, avoid deleting or altering information covered by the hold, acknowledge the notice as required, and contact the designated legal or records-management contact with questions.

What if a record is accidentally deleted after a litigation hold?

The incident should be reported immediately to the organization’s legal team and appropriate records or IT personnel. The organization should document the event, determine what information was affected, and follow applicable legal and remediation procedures.

How often should a litigation hold be reviewed?

A litigation hold should be reviewed when the facts, claims, custodians, systems, or preservation requirements change and should remain active until the responsible legal authority determines that the preservation obligation has ended.

What happens when a litigation hold is lifted?

Once authorized, the organization should document the release, notify relevant custodians, update IT and records-management controls, and resume applicable retention and disposition processes. Preserved information may still be subject to other retention or legal requirements.

What is the definition of a federal record?

Under 44 U.S.C. § 3301, a federal record generally includes recorded information made or received by a federal agency under federal law or in connection with public business and preserved or appropriate for preservation as evidence of official agency activities.

What are the three stages of a records lifecycle?

The commonly described records lifecycle consists of creation or receipt, maintenance and use, and disposition. A litigation hold can suspend normal disposition for information covered by the hold.

Key Takeaways

• A litigation hold is a preservation obligation related to pending or reasonably anticipated litigation.
• Management should act promptly once the obligation arises.
• The first priorities are scope, custodians, data sources, notice, and preservation.
• Applicable routine deletion and disposition processes should be suspended for information within the hold’s scope.
• A litigation hold does not automatically require preservation of every record in the organization.
• Compliance monitoring and documentation are important parts of a defensible process.
• Legal, IT, records-management, compliance, and business teams may all have responsibilities.
• AI and automation can reduce administrative work, but legal judgment and appropriate human oversight remain important.
• The hold should be formally released when the responsible legal authority determines that the preservation obligation has ended.

Conclusion

When a litigation hold is received, management must respond with a structured preservation process: determine the scope, identify relevant custodians and data sources, communicate the hold, suspend applicable destruction and disposition activities, preserve potentially relevant information, monitor compliance, and document the process.

A strong litigation-hold program combines clear legal direction, records-management discipline, IT coordination, employee awareness, and appropriate technology. Automated workflows can make the administrative side of the process more consistent, while legal counsel and responsible business teams retain oversight of preservation decisions.

For organizations managing large volumes of financial and enterprise information, intelligent data-processing technologies can also help make information easier to capture, organize, search, and govern within the appropriate enterprise controls.

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