A litigation hold letter is a written notice directing someone to preserve documents, communications, and electronic data that could be relevant to an actual or anticipated legal dispute. The letter runs in one of two directions. An organization’s legal team sends an internal version to its own employees to stop routine deletion and lock down relevant records. An attorney sends an external version — sometimes called a preservation letter — to an opposing party or third party to put them on formal notice that litigation is coming. Either way, the letter does not create the duty to preserve. That duty attaches the moment litigation becomes reasonably foreseeable. The letter documents it.
When the Duty to Preserve Begins
Preservation obligations do not wait for a filed complaint or a letter in the mail. They begin as soon as litigation is “reasonably anticipated.” Common triggers include a workplace accident likely to generate a claim, a demand letter from opposing counsel, word that a former employee has retained an attorney, or notice of a government investigation. Once any of these happens, the clock is running whether or not a formal hold has been issued.
Courts expect counsel to treat preservation as an active, ongoing responsibility. A single instruction to “keep everything” does not discharge the duty. Lawyers are expected to identify all sources of potentially relevant information, issue written hold notices, follow up with custodians who have not acknowledged them, and monitor compliance for as long as the matter is open. Gaps in any of those steps are where sanctions trouble usually begins.
Internal Holds Versus External Preservation Letters
The two documents share a name and a purpose but have different audiences, and conflating them causes mistakes.
An internal litigation hold is a directive from an organization’s legal department to its own employees — the people who create, manage, or store information that might be relevant. It tells them to stop deleting files, preserve specific categories of data, and suspend routine document destruction. The audience is your own team, and the goal is to keep your organization from inadvertently destroying evidence it has a legal duty to keep.
An external preservation letter goes the other way. An attorney sends it to the opposing party or a third party to put them on formal notice that litigation is anticipated. Receiving one does not create new legal duties, because the duty to preserve already exists once litigation is reasonably foreseeable. What the letter does is remove any later argument that the recipient didn’t know. If evidence goes missing afterward, the letter is strong proof that the destruction was at least negligent.
If you receive an external preservation letter, treat it as confirmation that your internal hold should already be in place. If it isn’t, put one in place immediately. Responding in writing to acknowledge the letter and briefly describe the steps you’re taking is a practice courts look favorably on, though no rule strictly requires it.
What a Litigation Hold Letter Should Include
Whether internal or external, a hold notice needs enough specificity that the recipient knows exactly what to do. Vague instructions invite both over-preservation, which is expensive, and under-preservation, which is dangerous. A well-drafted notice generally covers:
- A description of the dispute with enough context for the recipient to understand what information might be relevant, without disclosing privileged strategy.
- The relevant time period. A contract dispute originating in 2023 does not require preservation of emails from 2018 unless those earlier communications are somehow connected.
- Specific categories of information — emails, text messages, financial records, personnel files, reports — rather than a blanket instruction to keep “all documents.”
- An explicit instruction to suspend auto-delete policies, email retention limits, and scheduled data purges for the covered information.
- A named contact for questions, so custodians can ask when they are unsure whether a particular document falls within scope.
- For internal holds, a request that each custodian confirm in writing that they received the notice and understand their obligations.
A hold notice that doesn’t identify specific custodians or data sources leaves too much room for employees to guess wrong about what matters.
What Information Must Be Preserved
A litigation hold covers both physical documents and electronically stored information, commonly abbreviated ESI. The digital side is where most of the complexity sits.
ESI includes emails, text messages, instant messages, voicemails, calendar entries, and documents stored on hard drives, network servers, and cloud platforms like Google Drive, SharePoint, or Dropbox. Social media posts and direct messages are in scope when they are relevant. Metadata — the data showing when a document was created, modified, or accessed — must also be preserved. Changing a file’s format or moving it in a way that strips metadata can itself be spoliation. Physical records count too: paper memos, logbooks, printed reports, handwritten notes, and photographs.
Personal Devices and BYOD
Employees using personal phones and laptops for work has created a preservation headache. Courts have held that when an employer directs employees to use personal devices for business purposes, the employer has “control” over work-related data on those devices and must include them in a litigation hold. Even without a formal bring-your-own-device policy, if employees routinely use personal phones for work texts or emails, courts have found the employer responsible for preserving that data. Any internal hold notice should explicitly instruct employees to preserve work-related messages on personal devices.
Third-Party Platforms and Cloud Services
Data stored on third-party platforms like Slack or Microsoft Teams adds another layer. The organization using the platform — the workspace owner — is generally responsible for exporting and preserving its own data. Under federal law, providers like Slack are actually prohibited from disclosing communication contents to third parties based on a civil subpoena alone, which means the workspace owner needs to run its own data export to meet preservation obligations.
How to Put a Litigation Hold in Place
Speed matters. Any evidence lost during a delay in implementation becomes a potential problem. The steps below should happen quickly and in roughly this order.
Identify the custodians. These are the specific people who possess or control relevant information: the employees directly involved, plus IT administrators, department managers, HR personnel, and anyone who manages the systems where relevant data lives. Cast the net wide at this stage. You can narrow later; you cannot recover deleted data.
Issue the written notice to every identified custodian, with the elements described above. Require a written acknowledgment confirming receipt and understanding. If someone doesn’t respond, follow up and escalate. An unacknowledged hold is barely better than no hold.
Suspend routine document destruction. Many organizations automatically purge emails after a set period, overwrite backup tapes on a cycle, or shred paper files on a retention schedule. Every one of these automated processes has to be paused for the data and custodians covered by the hold. That usually requires coordination with IT to disable deletion scripts and extend retention windows.
Secure the specific devices and data sources that contain relevant information: laptops, smartphones, external drives, server directories. For employees who have already left, preserve their devices and accounts before any routine offboarding wipes occur.
After the notice goes out, many legal teams interview key custodians to find data sources that aren’t obvious from the outside — a shared drive only one department uses, a personal email account that received forwarded work documents, a project management tool IT didn’t flag. These interviews are also a chance to confirm that custodians actually understand the scope and are complying.
A hold is not a one-time event. Litigation can run for years, and employees who preserved diligently in month one may slip by month twelve. Periodic reminders reiterating the requirements and asking for reconfirmation are a straightforward step courts have recognized as evidence of good faith. New employees who take over relevant responsibilities during active litigation should receive the notice as part of their onboarding.
Document every step. Record when the hold was issued, who received it, who acknowledged it, what systems were preserved, and which deletion policies were suspended. This paper trail is the defense if the opposing party later claims you failed to preserve.
Consequences of Failing to Preserve
Destroying or significantly altering evidence when litigation is pending or reasonably foreseeable is called spoliation. Federal Rule of Civil Procedure 37(e) sets out a two-tier framework for sanctions when ESI is lost because a party failed to take reasonable steps to preserve it.
When the Loss Causes Prejudice
If the lost information cannot be restored or replaced through additional discovery and the opposing party is prejudiced, a court may order measures “no greater than necessary to cure the prejudice.”1Cornell Law School. Federal Rules of Civil Procedure Rule 37 – Failure to Make Disclosures or to Cooperate in Discovery Sanctions In practice, that means monetary sanctions: paying the other side’s attorney fees for dealing with the missing evidence, covering the cost of additional discovery, or paying fines. These remedies aim to put the prejudiced party back in the position they would have been in if the evidence still existed.
When the Destruction Was Intentional
The heaviest sanctions are reserved for parties who acted with the intent to deprive the other side of the information. Only upon that finding may a court instruct the jury that it may or must presume the destroyed information was unfavorable to the spoliating party — an “adverse inference instruction” — or dismiss the case entirely or enter default judgment against the offending party.1Cornell Law School. Federal Rules of Civil Procedure Rule 37 – Failure to Make Disclosures or to Cooperate in Discovery Sanctions An adverse inference is devastating at trial because it essentially tells jurors to assume the worst about whatever was destroyed. Dismissal or default judgment ends the litigation outright.
The “Reasonable Steps” Defense
Rule 37(e) only applies when a party “failed to take reasonable steps” to preserve information.1Cornell Law School. Federal Rules of Civil Procedure Rule 37 – Failure to Make Disclosures or to Cooperate in Discovery Sanctions Perfection is not the standard. An organization that issued a timely hold, notified the right custodians, suspended auto-deletion, followed up periodically, and documented its efforts has a strong argument that any data loss occurred despite reasonable preservation. That documented compliance trail — acknowledgments, reminders, IT change logs — is what separates a defensible position from an indefensible one.
When the Hold Ends
A litigation hold stays in effect until the underlying matter is fully resolved: dismissed, settled, or adjudicated through final judgment, including any appeals. Lifting a hold prematurely while a dispute is still active carries the same spoliation risks as never issuing one.
When the matter concludes, the legal team should send a written release notice to all custodians and IT personnel, stating that the hold is lifted and normal retention and destruction policies may resume. Document the release the same way you documented the hold. That prevents confusion months later when an employee wonders whether they can finally clean out that overflowing inbox.
Organizations handling multiple matters at once need to be especially careful. A document covered by one hold may also be relevant to another active case. Before releasing any hold, confirm that the affected data is not subject to a separate, still-active preservation obligation.