Do you remember Arthur Andersen? Once the gold standard of auditing firms, it collapsed almost overnight due to its role in the Enron scandal. Its shame was epitomized by stories of Arthur Andersen employees burning the night oil to shred incriminating documents. Ultimately, a federal grand jury indicted Arthur Andersen for obstruction of justice based on its intentional destruction of evidence.
While it may not always amount to a federal offense, destroying evidence is serious business. In lawyer talk, “spoliation” refers both to active destruction of evidence as well as passive, but negligent, failure to preserve it. If a Judge determines that a party to a lawsuit has intentionally destroyed evidence (whether paper, digital, or otherwise) or even that the party was merely careless in its failure to preserve the evidence, the court has broad authority to impose penalties ranging from monetary fines to summary adjudication of the claims in favor of the offending party’s opponent.
So what does this have to do with everyday business operations? It means that as part of good practice, businesses should try to do the following:
In its most extreme, spoliation of evidence can quite literally bring down your organization. Even in less serious cases, it can create a major distraction and expense. Take the time to educate your workforce and implement procedural safeguards upfront. You’ll be glad you did.