Pillage, plunder, despoil. These words conjure up images of Conan the Barbarian robbing and destroying whole villages. “Spoliate” is a less bloody but similarly archaic word.
Spoliation has a unique position in the law and, when proven, can lead to severe consequences. In its general sense, spoliation means the destruction of evidence, whether intentionally or by negligence. It can also mean the changing of evidence, such as by adding language to a document or substituting a false original.
There have always been instances where a party, either prior to or during litigation, decides to shred paper. In my practice, I have been given explanations by opposing counsel, which ranged from “the documents were disposed of using our company’s standard document retention policies,” “we had a flood/fire/disgruntled ex-employee,” “we don’t know what happened to those documents,” and “the pig ate ’em” (this was truly said!). Whatever the truth behind these statements may be, the fact is that evidence that once existed vanished through the intervention or negligence of a party to litigation.
With the advent of copiers, intentional spoliation became chancy. There was always a possibility that an extra copy of the document still existed in someone’s files. With computers, the ability to erase fully all vestiges of communications, contracts, memoranda, etc., becomes even more problematic. Now there is an additional explanation to add to the above list: my computer crashed.
The question then asked is what should a judge do when spoliation has been unearthed.
It may be fair to say that most expert reports go through revisions (corrections, additions) before they are submitted as a final product. Typically, experts will destroy their prior drafts. Why? The interim drafts may represent interim assessments and were never intended to represent the opinion of the expert. There are also instances where the expert’s final product was influenced by direction from counsel or the client. None of these circumstances necessarily indicates evil intent when the drafts are discarded.
Of course, opposing counsel would very much like to gain access to the interim reports to probe why and when opinions were modified.
When the expert drafts his report on computer, instead of drafting by hand or typewriter, his report is electronically updated. There are ways, not possible with handwritten or typed reports, to retrieve the altered information by getting into the computer memory and reconstructing the interim products.
In one case, the expert report stated that my client’s installation was of marginal quality. The earlier draft (stamped “Do Not Copy,” by the way) was recovered from a former employee, and it referred to the installation as “state of the art.”
Regardless of whether a computer is used in drafting, court decisions have held that the destruction of interim reports may be wrongful spoliation.
And the concept is not limited to documents. In a recent New Jersey case, a building owner, while litigation was proceeding, replaced allegedly defective materials that were installed by the contractor. The materials were leaking windows, but for the purposes of this discussion, they could have been electrical devices, cable, splices or switchgear.
The court found it compelling that the owner did not notify the contractor in advance of the replacement work. By removing the windows, evidence concerning the quality of the materials and techniques used in the original installation were lost/destroyed. The contractor argued convincingly that its ability to defend itself had been compromised since it had not been given an opportunity to assess the removal method and the condition of the windows and exposed surfaces after removal.
If a party is responsible for the destruction of evidence, it raises some very fundamental issues regarding fair trials. There are cases where the courts impose monetary sanctions to punish the wrongdoer. The party may be ordered to drop a claim, or a witness may be excluded from testifying. The courts may also presume negative inferences—e.g., that the destroyed evidence would have been adverse to the party who destroyed it. In extreme cases, the entire lawsuit may be dismissed, or a party’s defenses to a claim may be precluded.
There are no clear rules on this problem. As a result, the courts list “considerations” to be taken into account before sanctions are imposed. This list includes the following:
1 Whether the destruction was “willful” or intentional
2 The identity of the spoliator (clerk vs. vice president)
3 Prejudice to the other party/significance of the lost evidence
4 Whether alternative sources of information can be used to reconstruct the destroyed evidence
5 The manner in which the destruction took place (shredding vs. a fire)
“[For] determining remedies in the construction litigation context ... courts [should] consider the culpability of the spoliator, the importance of the evidence destroyed, the prejudice to the other party, and the availability of sanctions less severe than dismissal.” Robertet Flavors Inc. v. Tri-Form Construction, N.J. Sup. Ct (2010).
As a practical matter, when evidence is lost or destroyed, there is always a suspicion of ulterior motive. When destruction of evidence occurs within the ambit of litigation, there is almost always a presumption of intent.
There will be instances where a disaster destroys records. In my experience, I have confronted paper files destroyed by a flood in Tennessee, a tornado in Indiana and an intentional fire to a field trailer in Louisiana. Similar events have led to the destruction of electronic files. In almost all instances, the information was reassembled through secondary sources.
In each situation, the company suffering the loss documented the loss event. There were insurance claim forms, police reports and IT invoices establishing that the loss was not willful and was beyond the control of the company. Many contractors have at least one set of backup records. Field files, for example, may be copied to a home office on a regular basis.
Where claims or litigation appear to be likely, many contractors begin making duplicate claim files, which is a good idea, aside from the possibility of loss or destruction. It is simply easier to sort records by category during the job than to begin sortation at the end.
Physical evidence is also worth preserving. Photographs of damage caused by others on a job preserve the evidence, as do field reports. Where accusations are being made about faulty workmanship, preservation of the physical evidence itself can be useful and perhaps required. For example, for a claim of faulty welding of a subcontractor, the contractor preserved the removed welded pieces so that they could be tested by experts from both sides and used as evidence in court.
If claims are made against your company for defective workmanship, and the owner or contractor intends to make the repairs, demand to be notified in advance so that you can observe and document the repair efforts.
Once litigation begins, to the extent feasible, you should consider making a complete copy of all project files. Equally important, you should determine whether your employees have kept their own project files and ensure those records are copied, with a tag for the name of the employee. It is not uncommon for an employee to have a one-of-a-kind document. When preparing a witness to testify, it is always helpful when the witness has his own file as a starting point.
In a volatile construction market, it is common for key employees to leave or be discharged at the end of a project. Ensure all records kept by that employee, including diaries, are turned over and preserved.
It may be a rare construction project where no documents are lost or items destroyed. The law does not require perfection in record-keeping. Greater care, however, is expected where litigation has begun or appears likely.
The courts do not demand that all potential evidence be kept with such security that loss becomes impossible. For that reason, the imposition of sanctions will only arise where the “considerations” listed in this article are satisfied.