The knowledge that evidence is relevant to pending or likely litigation gives rise to a duty to preserve that evidence. Failure to comply with this duty may result in sanctions.

One of the more potent sanctions a court may impose for spoliation of evidence is an adverse inference instruction, which may permit or require the jury to conclude that the destroyed evidence would have hurt the party that destroyed it and helped the opposing party. At the very least, it calls attention to the fact that the spoliating party engaged in bad conduct during the litigation, potentially damaging the jury's view of that party. One state supreme court recently likened an adverse inference instruction to the "death penalty" for the spoliating party's case.

As several recent cases highlight, courts around the country disagree about the level of intent with which spoliation must have occurred for there to be an adverse inference instruction. Some courts require intentional destruction of evidence before permitting an adverse inference, allowing only lesser sanctions for less culpable mental states. Other courts hold that ordinary negligence may warrant an adverse inference.

Attorneys and their clients should comply with their preservation obligations. Still, if a client encounters spoliation issues, knowledge of the relevant case law may help counsel minimize the cost to the client.

The federal courts remain split over the level of intent required for an adverse inference instruction.

For example, two federal district courts imposed adverse inference instructions for negligent spoliation earlier this month. In each case, the defendant intended to preserve evidence but inadvertently failed to do so. Despite the absence of any bad faith or malicious intent, each court granted the plaintiff's motion for an adverse inference instruction. (Clemons v. Corrs. Corp. of Am., Nos. 1:11-CV-339, 1:11-CV-340, (E.D. Tenn. July 14, 2014); Osberg v. Foot Locker, Inc., No. 07-CV-1358 (KBF), (S.D.N.Y. July 14, 2014).)

Three days later, another federal district court held that an adverse inference instruction requires a showing that the non-moving party destroyed evidence in bad faith. Finding that the facts showed no more than negligent destruction of documents, the court denied the defendant's request for an adverse inference instruction. (Chapman v. BOK Fin. Corp., No. 12-CV-613-GKF-PJC, (N.D. Okla. July 17, 2014).)

These decisions demonstrate the persistence of a long-standing split among the federal circuit courts about the state of mind required for an adverse inference instruction. For a discussion of this split and a summary of each circuit's law, see Spoliation Sanctions by US Circuit Court Chart.

The split is not limited to the federal courts, as recent decisions from Texas and New York show. State courts around the country have reached different conclusions about when an adverse inference instruction is a proper spoliation sanction.

Parties must preserve all information relevant to a potential or actual litigation when litigation is reasonably anticipated. Implementing appropriate procedures to preserve relevant information fulfills that obligation and also reduces the risk of sanctions resulting from unintended spoliation. For resources that can help attorneys and their clients preserve, gather, request and produce relevant evidence for threatened and pending litigation, see Practical Law's:

Practical Law's Records Management Toolkit collects resources that can help in-house counsel manage their business's documents before disputes arise, including Standard Document, Document Retention Policy.

If a client does encounter spoliation issues, counsel must be aware of the different legal rules in different state and federal courts, and consider these differences when counseling clients and when making or defending sanctions motions. Practical Law's Practice Note, E-Discovery Case Tracker: Sanctions and Spoliation Sanctions by US Circuit Court Chart can help attorneys stay current on the law governing spoliation sanctions.