Glossary term
Legal Hold
Subject: Legal, Tax and Reporting, Records and Regulatory Reporting
Also known as: Litigation hold, Preservation notice
A legal hold is an instruction, usually from the legal department, to keep all documents and data that may be relevant to a dispute or investigation and to suspend their normal deletion.
Explanation
A hold begins when litigation, a regulatory inquiry or a criminal investigation is under way or reasonably expected. It is normally an internal notice, not a court order, though a court or regulator may also order preservation. The legal team names the people and systems involved, such as email, chat, shared drives and backup tapes, tells staff what to keep and switches off any automatic deletion. Holds stay in force until the legal team releases them in writing, and they override the usual retention schedule. Failing to preserve material can bring court sanctions, fines or an adverse inference, even if the loss was accidental. Holds are the first step before e-discovery. Courts treat destroyed evidence, after a dispute is foreseeable, as a wrong in its own right, whatever the reason for the loss.
Example
A tech firm gets a letter from a former reseller threatening to sue over a terminated contract. Within a day the general counsel sends a hold to the sales team and IT, who pause the 90-day auto-deletion of email and chat for the staff involved. Months later, those messages become key evidence for both sides.
Not to be confused with
- Records retention
- Retention schedules set routine keep-and-destroy periods. A legal hold overrides them for specific material tied to a dispute.