Owning a business involves being prepared for several potential issues. Depending on the type of Florida entity you have, and its organization, you may be a sole proprietor, limited liability company or partnership member, or corporate shareholder. Regardless of your business structure, it’s always possible that another party could sue your enterprise. Before another party files suit, you might receive something called a litigation hold notice. If you are unfamiliar with this type of document, you need to know: What is a litigation hold notice?
What is a Litigation Hold Notice?
A litigation hold notice is a letter that a party can send to another party, letting them know that there may be a future lawsuit and instructing the recipient to maintain certain records and information. If you receive this type of communication, you should contact an experienced Florida business attorney as soon as possible to review the matter. Likewise, if you believe it’s possible that you will need to sue another person or entity, you should consult with an attorney before drafting this type of document and sending it out.
What Should be Included in a Litigation Hold Notice?
The purpose of a litigation hold notice is to let another party know there may be a lawsuit and to help ensure that relevant documents and records are not deleted before the case is filed.
This type of notice should be specific and reasonably detailed. However, it’s possible for a litigation hold notice to be too broad or unclear. When a litigation hold notice is not written correctly, it may result in relevant documents being destroyed or lost. If you receive or need this type of notice, you should review the matter with an experienced business attorney as soon as possible.
Why do Litigation Hold Notices Matter?
Litigation hold notices are there to help potential litigants preserve evidence and ensure that the parties don’t intentionally or inadvertently dispose of or destroy relevant evidence.
These notices matter because:
- they help ensure that important records remain intact, and
- that parties are reasonable and fair with one another.
When a party receives a reasonable and appropriately worded litigation hold notice, it creates a record of them being placed on notice not to dispose of certain records. If that party disregards the notice, they could be viewed as acting in bad faith. Further, in Florida, when a party fails to comply with a litigation hold, the other party may be able to seek spoliation sanctions. Sanctions due to spoliation can be significant for the offending party.
What Should be Preserved?
Once a party is on notice of potential litigation, it is required to preserve data it knows or should know is relevant or is reasonably calculated to lead to the discovery of admissible evidence, is reasonably likely to be requested during discovery, and/or is the subject of a pending discovery request.
If you believe you need to prepare a litigation hold notice or are in receipt of this type of document, you should consult an experienced Florida business attorney as soon as possible to evaluate your situation and determine your options.
Contact an Experienced Florida Business Attorney
When you are a member of a Florida limited liability corporation, a partner, or a corporate officer or shareholder, understanding fiduciary duties is crucial. Attorney Richard Sierra at the Florida Small Business Center assists clients like you with business and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent small business clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.