Rickety Ladders and Other Artifacts: Always Preserve the Evidence
By Julie Lambeth, J.D., executive vice president, PartnerSource
“Your Honor, we were just informed by a former employee of the hotel that for the past two years he has been in possession of the ladder at issue in this matter. He has the ladder with him and he is here today to testify as to the condition of the ladder at the time of the incident.”
Needless to say, this was a startling revelation. I guess you could say this is as close as I will get to a “Perry Mason” moment.
In 1996, I was acting as the corporate representative for a client in litigation on a Texas injury benefit plan case. The suit involved an employee who alleged he was standing on a ladder while in the process of hanging a canoe in a sports bar when he injured his back.
The claim did not seem to be significant at the time; however, the claimant did allege that the ladder was “rickety.” The client did not memorialize the condition of the ladder at the time of the incident, nor remove it from use.
It only took a few months before a letter of representation arrived. Even still, the client did not secure the ladder nor preserve documentation related to its condition. Unfortunately, the ladder then disappeared -- only to reappear at trial.
Other than the word of the former employee, there was nothing to substantiate that he, in fact, had the actual ladder at issue. Nevertheless, the judge allowed the jury to view the ladder, which for the past two years had been sitting outside in the elements. The jury found for the plaintiff and awarded him more than $200,000 in damages. The important lesson learned from this case…always preserve evidence.
When Does a Duty to Preserve Evidence Arise?
The Texas Supreme Court identified in Brookshire Bros., Ltd. v. Aldridge, 438 S.W. 3d 9 (Tex. 2014) that a duty arises when a party knows or reasonably should know that there is a substantial chance that a claim will be filed. The Court explained that a substantial chance is more than an abstract possibility or unwarranted fear that litigation will ensue. Moreover, the evidence has to be material and relevant to the claim.
The receipt of a formal complaint, a subpoena or letter of representation places a party on notice of a duty to preserve evidence. A failure to preserve evidence once a duty has been established may result in the filing of a motion for spoliation and sanctions.
Now more than ever, letters of representation incorporate preservation language. This is, in large part, due to the concern for potential loss of electronic data, which can move quickly and be deleted before we understand its relevancy. Generally, notices will include a laundry list of information and materials they are directing be preserved, such as video footage, training records, incident reports, logs, maintenance records and equipment.
Who Determines if Spoliation Has Occurred?
The trial court – not a jury -- determines if a party spoliated evidence. The court’s process is to determine 1) whether a duty existed to preserve evidence and 2) did the party intentionally or negligently breach its duty by failing to preserve the evidence. The remedy afforded the nonspoliating party is dependent upon this determination.
What Remedies Are Available to the Nonspoliating Party?
The court has broad discretion in the assessment of a remedy, as long as the remedy directly relates to the culpability of the spoliating party and the degree of prejudice suffered by the nonspoliating party. (Id. at 23-26). The court will view a negligent failure to preserve evidence much less harshly than if the act was intentional. It can be assumed that the evidence withheld was unfavorable to the spoliating party if the act was intentional. Possible remedies/sanctions available to the court include:
- an order prohibiting further discovery
- award of attorney’s fees and costs
- dismissal without prejudice
- striking pleadings
- default judgment
- jury instruction
The use of a jury instruction is a last resort sanction. The instruction would direct the jury to view the spoliated evidence as unfavorable to the spoliating party. Therefore, the jury can assume that the spoliating party withheld the evidence because it was damaging to its case. A jury instruction would only occur if the court determined that the spoliation was intentional. However, there is a small caveat that a jury instruction may be justified if the failure to preserve was due to negligence and that act of negligence so unfairly prejudiced the other party that a claim could not be made or a proper defense asserted.
What about Retention Policies?
If a party has a duty to preserve evidence but fails to do so citing its document retention policies, the court can view that act as negligent or intentional. Regardless of internal retention policies, if a duty exists, all material and relevant evidence must be preserved.
Understanding the Impact on Your Organization
Corporate safety and risk understand the importance of preservation, but if the locations do not understand that a duty exists, the ramifications of failing to preserve a piece of equipment, maintenance records or video can have significant consequences in the outcome of litigation, regardless of whether a spoliation claim is made.
As part of their liability investigation, the Third Party Administrator should also be aware of when to instruct locations to preserve evidence. They should work closely with their client’s Risk Management team in the event the evidence needs to be stored or placed out of operation to ensure minimal disruption in the client’s business. And always, always obtain a copy of any video prior to, at the time of, and after the incident.
Keep in mind that while it may appear that a preservation duty exists only for defendants, the duty to preserve runs both ways: A plaintiff also has a preservation obligation that includes documents, social media posts, text messages and voicemails.
Take Notice of Preservation Seriously
In conclusion, PartnerSource recommends that clients take a notice of preservation seriously and secure all evidence that that is material and relevant to a work incident.
If a piece of equipment is involved and is in good working condition, memorialize that fact with photographs so that it can be placed into use. Train location managers on the importance of preserving records and equipment. Make sure your Third Party Administrator is coordinating with corporate risk and local management.
Preserving evidence not only is a good practice to avoid a claim of spoliation, it will also help you to better assess the incident, be proactive, and minimize the risk of potential litigation.