Companies Cannot Destroy Records When They Should Know a Lawsuit is Probable

New Georgia Law on Destroying Evidence

This week the Georgia Supreme Court issued a ruling in Phillips v. Harmon, 297 Ga 386 (2015) regarding spoliation, i.e. the destruction of evidence or the failure to preserve evidence, that will benefit plaintiffs in all kinds of personal injury cases. Plaintiffs are often at a huge disadvantage in terms of gathering evidence to prove their case because the evidence they need lies in the hands of the large corporate defendants they are suing. The Court’s holding helps to level the playing field in this regard. The Court basically said if the injury is a big deal where it's normal to expect litigation down the road, you are on notice that you should preserve critical evidence regardless of whether the plaintiff actually asks you to in writing. 

Proof of spoliation can lead to serious consequences for the spoliating party. However, the problem for plaintiffs historically is that in order to pursue a remedy for spoliation, the spoliating party must have been under a duty to preserve the evidence at issue and that duty began when they had actual knowledge of a possible claim. This created an incentive for defendants who might face a claim for negligent conduct to destroy evidence as soon as possible before getting a spoliation letter or some other type of actual notice from a plaintiff or their attorney to preserve the evidence. Under this system, the defendants could claim they were not under a duty to preserve any evidence, so their destruction of the evidence should not result in any negative consequences.

Fortunately, the Court’s recent ruling takes a broad view of when a defendant’s duty to preserve evidence begins. Certainly, such notice can still come through actual knowledge of a letter sent by plaintiff’s counsel to preserve various pieces of evidence. In addition, the Court held that such knowledge can be constructive, meaning that a defendant’s duty begins if or when the defendant should have reasonably foreseen that the plaintiff is contemplating litigation. This is a highly fact intensive inquiry, but looking at the defendant’s conduct following an incident can demonstrate that the defendant should have known that litigation was a possibility. Such conduct can include the initiation and extent of internal investigations, the reasons for notification of attorneys and insurance carriers, or communications that the defendant was anticipating litigation. While the trial courts still have broad discretion in applying sanctions for spoliation, this new decision makes it far less difficult for plaintiffs in personal injury cases to pursue these kinds of remedies.

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