Today, a legal hold is one of the most important measures to protect companies in the event of impending or ongoing legal disputes. The structured process ensures that relevant documents and data are not deleted, changed or overlooked. In this way, legal retention obligations can be fulfilled, evidence secured and legal risks effectively reduced.
What Is a Legal Hold (Litigation Hold)?
A legal hold is an internal instruction within a company not to delete or change certain data and documents because they could be relevant to ongoing or anticipated legal proceedings.
Legal Hold Definition
Normally, company data is subject to automatic deletion periods or archiving rules. However, if a legal hold is activated, these routines are temporarily suspended. All relevant information must be retained so that it can be used as evidence at a later date.
Typical triggers are
A legal hold ensures that a company fulfills its obligation to provide evidence and retain documents .
Although the term “legal hold” originally comes from US law (pre-trial discovery), the concept is just as critical for German companies. In Germany, the preservation of evidence is particularly relevant in the context of the Code of Civil Procedure (ZPO) and compliance with the GoBD (principles for the proper keeping and storage of books, records and documents in electronic form). A legal hold ensures that companies comply with their procedural obligations to cooperate and do not risk sanctions for obstructing evidence.
Difference Between Legal Hold and Litigation Hold
In practice, the terms legal hold and litigation hold are often used interchangeably. However, there is a slight difference in the focus of the two terms.
| CRITERION | LEGAL HOLD | LITIGATION HOLD |
|---|---|---|
| Meaning | Generic term for measures to secure relevant data in legal matters | Specific form of legal hold in connection with court proceedings |
| Area of application | Broader: also for compliance audits or official investigations | Narrower: mainly for ongoing or anticipated legal proceedings |
| Goal | Ensuring that relevant data is not deleted or changed | Protection of evidence for specific proceedings |
In short, a litigation hold is a special form of legal hold that is directly linked to court proceedings.
What Is a Legal Hold Notice?
A legal hold notice is the official notification with which a legal hold is initiated within a company.
This message informs employees that certain data may not be deleted or changed because it may be relevant for legal proceedings.
It usually contains:
This ensures that everyone involved knows what information needs to be protected.
Who issues a legal hold notice?
In most companies, a legal hold notice is created and sent by the legal department .
Typical responsible persons are:
The legal department often works closely with the IT department, as technical measures are required to store data securely.
Who Receives a Litigation Hold Notice?
The recipients of a litigation hold notice are all persons within the organization who may have relevant information. Executives, IT administrators, project managers and employees with a direct connection to the subject matter of the dispute also receive a notice. Former employees or external service providers may also be affected if they had access to relevant data.
When Is a Legal Hold Necessary?
A legal hold becomes necessary as soon as a company can reasonably expect a legal dispute or becomes aware of an official investigation. The triggers can be many and varied: unfair dismissal claims, patent disputes, antitrust investigations or compliance violations. Even the credible threat of legal action or the receipt of an official inquiry can trigger a legal hold.
Analyses by ComplexDiscovery show that the rapidly growing volumes of digital data are presenting companies with completely new challenges in the eDiscovery and data retention process. A professional legal hold process is therefore no longer a “nice-to-have”, but a business-critical necessity.
The Most Important Steps in the Legal Hold Process
A structured legal hold process consists of several clearly defined phases. These help companies to systematically secure data and fulfill their legal obligations.
Identification of Relevant Data and Documents
The first step is to identify potentially relevant information. This requires a systematic analysis of all potentially relevant data sources, including emails, contracts, business correspondence, electronic files and physical documents.
Notification of the Employees Concerned
Once relevant data sources have been identified, the relevant employees must be informed.
The Legal Hold Notice contains clear instructions, such as:
Many companies also require a confirmation of acknowledgement in order to document the process in a comprehensible manner.
Backup and Storage of Data
The identified data must be backed up immediately and protected against modification or deletion. This includes the deactivation of automatic deletion routines, the creation of backup copies and the implementation of access controls. Electronic data should be preserved in its original form with all metadata.
Monitoring and Documentation of the Legal Hold
A legal hold is not a one-off process, but must be continuously monitored.
This is documented:
Complete documentation is crucial if the process is later reviewed in court.
Lifting of the Legal Hold
As soon as the proceedings are completed or there is no longer a legal obligation, the legal hold can be lifted. This step is referred to as a legal hold release. This ends the special status of the data and the regular retention and deletion guidelines come back into force.
Challenges in Legal Hold Management
Many companies underestimate the organizational and technical challenges of a legal hold.
Legal Hold Software
Modern legal hold platforms automate and simplify the entire storage process considerably.
These specialized software solutions offer central management functions for the creation and distribution of legal hold notices, the tracking of acknowledgements of receipt and the monitoring of compliance. Automatic reminders, escalation mechanisms and comprehensive reporting functions reduce manual effort and minimize sources of error.
Manage Legal Hold Efficiently with DiliTrust Matter Management
A structured legal hold process becomes much easier when companies use a central platform for their legal processes. This is exactly where DiliTrust Matter Management comes in.
The solution is part of the DiliTrust Suite and supports legal departments in managing legal processes, documents and tasks in one central location.
For legal hold management, the platform offers, among other things:
This structured administration enables legal departments to organize legal holds efficiently, document processes better and reduce compliance risks.
