3 Legal Hold Blind Spots Organizations Commonly Miss

Legal hold blind spots occur when organizations fail to identify, preserve, and collect data properly during litigation. These gaps may cause serious legal and financial problems, including court sanctions, adverse inference instructions, and spoliation penalties. In addition, mishandling legal holds may increase litigation costs, harm your company’s reputation, and, in some cases, lead to default judgments.

These blind spots often happen when organizations rely on outdated data preservation approaches, decentralized data storage, and manual processes as digital communication grows rapidly. These gaps frequently appear where modern technology, such as cloud apps and mobile devices, meets traditional, delayed legal hold processes. Keep reading to learn more about legal hold risks and how organizations often miss critical data due to these blind spots.

1. When Critical Data Goes Missing in Communication Tools

Legal hold blind spots frequently occur when people fail to capture, delete, or overlook important data during litigation. These gaps typically arise from reliance on manual processes, decentralized data storage, and the rapid rise of new team collaboration tools.

Some common examples where people fail to capture critical data include social media and emails containing hyperlinked documents. Temporary messaging apps are some of most challenging blind spots, and here is why:

• Signal: The app automatically deletes messages on user devices, and because it leaves no central server records, legal teams must rely on difficult, device-specific methods to prevent data loss.
• WhatsApp: Its ephemeral messaging features, end-to-end encryption, and decentralized storage across personal devices make it incredibly easy for evidence to be deleted or lost.
• Microsoft Teams: Messages, edits, and file links are scattered across multiple back-end repositories (like Exchange and SharePoint), and features like disappearing messages or threaded replies make capturing a complete, unaltered conversation trail extremely difficult.
• Slack: It features a sprawling web of group channels, disappearing messages, thread edits, and third-party integrations that make it incredibly difficult to isolate a single “custodian”.

Although organizations use these platforms for daily business communications, they often exclude them from legal hold risk policies. For example, keeping the email alone does not ensure preservation of the specific version of the document that a person shared at a specific time. This failure could create gaps in evidence, which is why Illuminate is the ideal solution to address legal hold blind spots.

2. Overlooked and Decentralized Data

When people store data across multiple locations, such as personal devices, cloud storage accounts, and local desktops, they often miss important information when focusing on data on centralized servers, resulting in legal hold blind spots. Also, if organizations do not stop automated routines, such as “auto-delete” for emails, texts, or Slack messages, these processes could remove critical evidence. People frequently overlook data that third-party vendors, consultants, or contractors control, even though organizations maintain possession and control over it.

3. Vague Hold Notices Are Not Enough To Prevent Missing Data

Misunderstood or vague hold notices contribute to missing data. If a legal hold notice does not clearly describe which types of data or date ranges employees or custodians must preserve, they may keep less critical information than necessary. Another issue arises when organizations fail to quickly identify all relevant people. If an organization cannot locate every custodian, especially when communication involves complex or unusual methods, people with vital information may not receive the hold instructions.

Real World Case Study: Waymo LLC v. Uber Technologies, Inc.

In Waymo LLC v. Uber Technologies, Inc., the legal hold dispute is remembered as a landmark case study on spoliation of evidence and the misuse of ephemeral messaging apps. U.S. District Judge William Alsup ruled that Uber failed to meet its legal hold obligations by not preserving and producing critical evidence.

According to court records, Uber actively used Wickr and other “ephemeral” messaging apps to discuss stolen trade secrets and evade discovery. Uber was severely penalized for withholding the severely damaging “Jacobs Letter” that claimed the company used specifically designed technology to thwart legal discovery. Facing this significant legal hurdle, Uber ultimately settled with Waymo for $245 million in equity.

How Hanzo Tools Help Reduce Legal Hold Blind Spots

Hanzo Illuminate addresses legal hold risks and blind spots by providing automated, defensible, and comprehensive capture of otherwise missed dynamic cloud-based data. Our AI-powered software tackles challenges that modern collaboration platforms and complex websites pose by reducing gaps that occur because of temporary or disappearing data. Let us take a closer look at Illuminate’s powerful capabilities:

• In-Place Preservation and Context Retention: Illuminate captures conversations, threads, attachments, edits, deletions, and emojis exactly as they appeared to the user, safeguarding full custodial context in real time.
• Targeted Collection: Illuminate avoids over-collection practices by focusing legal holds and collections on specific spaces, custodians, and channels, limiting exposure and reducing storage costs.
• Single-Point Management: Our platform bridges the gap between IT and legal by enabling legal teams to initiate or release holds and preview communication sources without pulling entire systems offline.

Connect with a Hanzo representative to learn how our tools could help reduce litigation costs.

Identify Your Legal Hold Blind Spots and Important Missing Data

Missing critical data may increase your legal hold blind spots. That is why your company could benefit from exploring Hanzo’s AI-powered software solutions. We provide e-discovery, digital investigations, and data archiving and management software that focus on these challenges.

Our advanced tech-based solutions help lawyers manage data from social media platforms and dynamic websites, such as those where organizations commonly miss critical data.