In June 2015 the Georgia Supreme Court made significant changes to spoliation in the State of Georgia. In its decision in Phillips v. Harmon, 297 Ga. 386 (2015), the Court rejected the bright line test formerly relied upon by trial courts in the state when determining when a duty to preserve evidence begins. The unanimous decision broadly expanded the scope of a potential defendant’s duty to preserve evidence and changed how courts in Georgia will treat parties who have failed to preserve evidence under the new standards. This decision represents a dramatic shift in the law and will no doubt have dramatic effects on record-keeping and management in the business sector.
Spoliation refers to the destruction, or failure to preserve evidence that is necessary to contemplated or pending litigation. With this principal, trial courts have the authority to dismiss cases when a party fails to properly preserve necessary evidence over which they have control. “The policy underlying this inherent power of the courts is the need to preserve the integrity of the judicial process in order to retain confidence that the process works.” Bridgestone/Firestone North American Tire, LLC v. Campbell, 258 Ga. App. 767 (2002). Courts have been free to, and have routinely, sanctioned parties which have failed to preserve important evidence according with the rules for doing so upheld by the court.
The general rule for determining whether evidence must be preserved has been that if the evidence at issue is necessary to litigation and if there was “contemplated or pending litigation.” See Padgett v. Kroger, 311 Ga. App. 690 (2011). It has been held in the past that “potential for litigation,” was not the standard. Even when the courts specifically used that phrase, it has been consistently held that litigation must be actually contemplated or pending in order to put a potential defendant on notice that they must preserve evidence. See Silman v. Assoc. Bellemeade, 286 Ga. 27 (2009). Even the fact that someone is injured “is not notice that the injured party is contemplating litigation sufficient to automatically trigger the rules of spoliation.” Kitchen v. Brusman, 303 Ga. App. 703 (2010).
However, the Georgia Supreme Court’s decision in Phillips last year has changed those standards. In Phillips, the Court took up the issue of the duty of a party when litigation is pending or “reasonably foreseeable to that party.” In addressing this issue the Court held that a party’s own actions could be relevant in making the determination. It was found that notice of a plaintiff contemplating litigation can be actual or constructive, however, the defendants actions after an event “may demonstrate constructive notice.” Specifically, the Court held that it may be appropriate to consider
“what the defendant did or did not do in response to the injury, including the initiation and extent of any internal investigation, the reasons for any notification of counsel and insurers, and any expression by the defendant that it was acting in anticipation of litigation.”
Additionally, the court identified a number of other circumstances from which it might be reasonably inferred that the plaintiff is contemplating litigation. These include the type and extent of the injury, the extent to which fault for the injury is clear, the potential financial exposure if faced with a finding of liability, the relationship and course of conduct between the parties, including past litigation or threatened litigation, and the frequency with which litigation occurs in similar circumstances.
This landmark decision marks a significant change in the requirements of companies operating within the State to maintain records following a significant event. While it is unclear what the long term effects of Phillips will be, it is clear that clients need to be more cautious in preserving potential evidence. Should one fail to do so, they may face the potential for a spoliation charges ranging from inference to default. Where a bright line used to exist from which our clients could gauge their duty to preserve evidence, the triggers for initiating one’s duty are now more subtle. Careful consideration of a business’ evidence retention policy should be reviewed whenever an unexpected event occurs or a professional relationship begins to become strained. Until the trial courts across the state are able to determine exactly how to administer the law under the Court’s new decision it is in a corporation’s best interest to carefully review their own policies so as not to run afoul of the court for spoliation in future litigation.