Virginia Creates Duty to Preserve Potential Evidence
On March 21, 2019, Governor Northam signed Senate Bill 1619 into law, changing what remedies are available to a court faced with a potential litigant or a party who has recklessly deprived another party of evidence. The new statute provides:
A party or potential litigant has a duty to preserve evidence that may be relevant to reasonably foreseeable litigation. In determining whether and at what point such a duty to preserve arose, the court shall include in its consideration the totality of the circumstances, including the extent to which a party or potential litigant was on notice that specific and identifiable litigation was likely and that the evidence would be relevant.
If evidence that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, or is otherwise disposed of, altered, concealed, destroyed or not preserved, and it cannot be restored or replaced through additional discovery, the court (i) upon finding prejudice to another party from such loss, disposal, alteration, concealment, or destruction of the evidence, may order measures no greater than necessary to cure the prejudice, or (ii) only upon finding that the party acted recklessly or with the intent to deprive another party of the evidence’s use in the litigation, may (a) presume that the evidence was unfavorable to the party, (b) instruct the jury that it may or shall presume that the evidence was unfavorable to the party, or (c) dismiss the action or enter a default judgment.
SB 1619 (emphasis added).
While there has always been a duty to preserve evidence that may be relevant to foreseeable litigation, the new statute changes what options the court has to address the failure to preserve evidence. Before this statute was enacted, the Virginia Supreme Court had held that in order for an adverse inference instruction to be given, which allows the jury to infer that the evidence loss would have been favorable to the other party, the evidence “must support a finding of intentional loss or destruction of evidence in order to prevent its use in litigation[.]” Emerald Point, LLC, et al. v. Hawkins, et al., 808 S.E.2d 384 (Va. 2017) (emphasis added). The new statute lowers the bar: under the new statute, it is not necessary to show that a party or potential party intended to destroy or hide evidence. Instead, it is only necessary to show that the party or potential party acted recklessly with respect to its obligation to preserve evidence.
It is also important to note that where the loss of the evidence is unintentional, rather than reckless or intentional, the court is limited to “measures no greater than necessary to cure the prejudice.” Accordingly, a potential litigant who is accused of having lost or destroyed evidence may be able to respond by two means: 1) by arguing that litigation was not yet reasonably foreseeable when the loss occurred; and 2) even if litigation was reasonably foreseeable, the loss was not reckless or intentional, and therefore the court should be limited to measures no greater than necessary to cure any prejudice.
Under this new statute, it will be important for attorneys and clients to ensure that potentially relevant evidence is being preserved as early as litigation becomes reasonably foreseeable. It is also important, as always, for clients to establish and follow concrete document retention policies. When litigation becomes reasonably foreseeable, it is important to suspend any auto-deletion policies that may be in place and to carefully preserve any documents, electronically stored information, or physical evidence that may be relevant in litigation in order to avoid the harsh consequence of an adverse inference instruction.