Legal hold order for records
The purpose of this advice is to identify the procedures to be followed to ensure an agency's obligation to retain records and information for litigation, or potential litigation, is satisfied (see also Records Management Advice No 4 - Producing records as evidence in legal proceedings).
In the event of legal proceedings involving the agency (or anticipated legal proceedings (1)), it is essential that destruction of records or information (2) that could be relevant to litigation be suspended, even if there is a current records disposal schedule (3) authorising destruction of records, or if the material in question is eligible for destruction by following normal administrative practice (4).
Note: Agencies involved in litigation, or possible litigation, need to seek legal advice and act in accordance with such advice with respect to particular matters or production of information. A failure to do so could be prejudicial to the interests of the Territory. Any concerns about particular legal advice received by an agency should be raised with the Director of Litigation at the office of the Solicitor for the Northern Territory.
As stipulated in Records Management Advice No.4 - Producing Records as Evidence in Legal Proceedings, records (or documents (5)) may be required for legal purposes in several contexts. They may be required to obtain legal advice on behalf of an agency, for the purposes of “discovery” to other parties involved in litigation in which an agency is a party, or for production in court by an agency whether or not the agency is a party to the proceeding.
In his Report on Document Destruction and Civil Litigation in Victoria, Professor Peter Sallmann (6) states:
- It is important for the proper and fair resolution of civil justice proceedings that material relevant to those proceedings be available to the court. This is a very basic feature of our civil justice system. Serious issues arise if such material is not available, especially if it has been destroyed by a party to the proceedings. Even more so if the destruction is deliberate, with the idea of making things difficult, if not impossible, for the other party to the case.(7)
High profile legal cases such as McCabe v British American Tobacco in Victoria (which led to Professor Sallmann's report), and Enron/Arthur Andersen in the United States, have revolved around the destruction of documents that may have been relevant to litigation (8).
In order to ensure that the NT Government can protect its position and defend itself in court where necessary, it is vital that all records and information relevant to this process be preserved. This can be ensured by the issue of a legal hold notice.
Steps to follow
An agency's internal legal unit, or outsourced legal service provider, are usually responsible for advising all business units and employees of actual or potential litigation that will or may necessitate the preservation of relevant evidence and/or the suspension of relevant disposal activities.
Regardless of the source, if an agency is informed of litigation, or is made aware of potential litigation, to which it may be a party, the following steps need to be followed:
- Seek legal advice, either internally or from the agency's legal service provider, if this hasn't already happened. If necessary, contact the office of the Solicitor for the Northern Territory.
- Identify all sources of corporate information that may be relevant to any litigation, either pending or anticipated (9).
- Cease disposing of any records or information that may be related to litigation or pending litigation as soon as either eventuality is reasonably foreseeable (10), even though a disposal suspension may not have yet been formally instituted.
- Issue a formal notice to all employees, authorised by the chief executive (or delegate), suspending disposal action upon all records and information relevant to any litigation or pending litigation. This legal hold notice could take the form of a broadcast email, a message on the agency's intranet, a hard-copy memo to all employees, or a combination of these methods. (This is especially important for agencies with a dispersed workforce.)
- Inform all employees and organisations responsible for the storage of the agency's corporate records and information of the suspension of disposal action (this includes the records manager, all business unit managers, employees/organisations responsible for managing the agency's information and communication technology infrastructure, database managers, employees in regional areas and secondary records storage providers).
- Cooperate with any request to produce documents and information in accordance with the agency's specific legal advice (see also Records Management Advice No.4 - Producing Records as Evidence in Legal Proceedings).
- Do not resume normal destruction practices on relevant records or information until formal notification has been received from the agency's internal legal unit, or outsourced legal service provider. The legal hold notice must be rescinded by authority of the office holder who issued it.
The legal hold notice, along with all consequent action arising as a result of its issue, needs to be captured into the agency's corporate records management system as a record that the suspension was publicised and acted upon throughout the agency.
The Records Policy Unit is responsible for developing, managing and implementing Records Management Standards for the NT Government. The regulatory basis for records management is the Information Act 2002, Part 9 - Records and Archives Management.
For further information please contact:
Records Policy Unit
ICT Policy and Strategy Section
Department of Corporate and Information Services
The NT Records Service would like to acknowledge the assistance of the following in producing this advice:
- Office of the Solicitor for the Northern Territory
- The concept of anticipated proceedings involves the notion that there is a reasonable probability or likelihood that such proceedings will be commenced - not that they will be but rather that more probably than not they will be. (Australian Competition & Consumer Commission v Australian Safeways Stores Pty Ltd & Ors (1998), 153 ALR 393, pp 424 to 425)
- Record means recorded information in any form (including data in a computer system) that is required to be kept by a public sector organisation as evidence of the activities or operations of the organisation, and includes part of a record and a copy of a record. (Information Act 2002, s 4).
- A disposal schedule is a formal policy document, authorised jointly by the chief executive officer of an NT Government public sector organisation and the NT Archives Service, that defines the temporary or permanent status, retention period and consequent disposal actions authorised for classes of records described in it. See the Northern Territory Archives Service.
- Northern Territory Archives Service.
- A 'document' can be defined as recorded information or object which can be treated as a unit (National Archives of Australia website). For the purposes of this Records Management Advice, the terms 'record', 'document', 'information' and 'corporate information' apply to anything that may be required by any party pursuant to litigation or anticipated litigation.
- Professor Sallmann was commissioned by the Attorney-General of Victoria to examine the current law, procedures and practices of discovery in the conduct of civil litigation in Victoria, with special emphasis on the approach that should be adopted if documents that could be relevant evidence in a trial are destroyed, whether the destruction occurs before or after the actual legal proceedings commence. This followed the case of Roxanne Cowell (representing the estate of Rolah Ann McCabe, deceased) v British American Tobacco Australia Services Limited, applying for special leave to appeal to the High Court against the original Victorian Court of Appeal decision. Professor Sallman's report is titled Report on Document Destruction and Civil Litigation in Victoria.
- Report on Document Destruction and Civil Litigation in Victoria, Sallmann, P., Crown Counsel Victoria, p 12
- In 2001, the US energy firm, Enron, collapsed owing massive debts. US federal authorities had opened a formal investigation and sent Enron a letter that requesting accounting documents. Enron's accounting firm, Arthur Andersen, knowing legal action was “highly probable”, urged employees to follow the company's document retention policy. Andersen's were convicted of witness tampering by informing its employees to destroy documents in the face of pending litigation, although this ruling was overturned on appeal in 2005. Both the Andersen and British American Tobacco cases hinged upon the company's document retention policies and whether they were being properly adhered to. They also highlighted the need for a formal process to be invoked when legal proceedings were anticipated.
- It is essential that a legal hold order be applied to all sources of the agency's information. This would include the records management system, business drive, business systems, ICT back-up tapes, and other unstructured information sources such as individual hard drives on PCs, CD-ROMs, desktops, desks, etc.
- The term 'reasonably foreseeable' is defined to mean the point in time at which an employee initially gains knowledge that any particular record or document may or will be relevant to a legal proceeding, including lawsuits that have not officially commenced.
Last updated: 11 November 2019
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