• September 22, 2009

    Loss of Evidence Can Lose Your Case Before It Begins

    Most people know that to prove one’s position in a lawsuit, evidence is necessary. But must a party preserve evidence even before a lawsuit is filed? If the party reasonably should know that the evidence is important to the potential lawsuit, the answer is yes.

    In New Jersey, one must preserve evidence when a lawsuit is pending or is likely to be filed. A party who fails to preserve or who destroys evidence (commits spoliation) will, at the very least, be sanctioned by the court. The issue of preserving evidence has recently received renewed attention given the growing demands for the production of electronic data and records, such as e-mails and computer files, which can easily be deleted. In the age of forensic analysis, whether e-mails or electronic files are deleted is easily determined. It therefore is crucial for individuals and businesses to know when there is a duty not to spoliate, or not to destroy, evidence.

    Spoliation arises when a document or other piece of evidence is destroyed or altered in any way. Not only does the destruction or alteration of evidence interfere with the proper course of a lawsuit; it also violates court rules regarding the parties’ rights to discover information from each other. Given the significance of relevant evidence to a lawsuit, a person or business has a duty to preserve evidence when a lawsuit is pending or will likely be filed, when discarding the evidence is likely to harm the other party’s ability to prosecute or defend a lawsuit, or when the evidence is relevant to the litigation.

    For example, in Aetna Life and Casualty Co. v. Imet Mason Contractors, the plaintiff insured a building site that was partially destroyed by a fire that originated in a van. After paying the contractor for the damage, the plaintiff sued the manufacturer and distributor of the van in a subrogation action to obtain reimbursement of the insurance proceeds. Experts for the company that insured the van and for the plaintiff inspected the damaged van and issued reports, but the van was destroyed before the defendants were allowed to inspect it. As a result, the defendants claimed that the evidence had been spoliated. The appellate court found that the plaintiff was aware of the significance of the van to the suit and had a duty to preserve the van as evidence so that the defendants could inspect it. The court therefore affirmed the trial court’s dismissal of plaintiff’s complaint.

    The widespread use of computers has made them prime sources of evidence in many cases. Hard drives and e-mails frequently hold valuable information which may be useful to the parties. Because of the ease with which computer records can be altered or destroyed, it is extremely important that people know to protect such information when a lawsuit is possible. Alteration of digital data or destruction of e-mails, whether accidental or not, can seriously affect the ability to prosecute or defend a claim.

    Thus, when a party possesses or controls documents or items which are likely to be important to a current lawsuit or an expected lawsuit, that party has a duty to preserve the evidence so that all other parties have an opportunity to examine it. Allowing the alteration, disposal or destruction of potential evidence may lead to sanctions including dismissal of the case. Failure to preserve evidence thus can lose a case even before it has begun.

    Jennifer L. Reed is an associate of Hill Wallack LLP in the Princeton office where she is a member of the Litigation Division and the Trial & Insurance Defense and Insurance Coverage Practice Groups. Ms. Reed focuses her practice in the defense and representation of insurance companies and their insureds in complex claims and litigation.