Notice of Litigation Definition

A Notice of Litigation is a formal notification sent to inform a party about pending legal action or a lawsuit against them, providing details about the legal proceedings.

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The definition of a Notice of Litigation is that it’s a legal document that informs the recipient of an impending lawsuit. The notice instructs the recipient to preserve certain business information for use during the lawsuit. 

Notice of Litigation Benefits

In 2022, much of a business’s information is electronically stored. Naturally, electronically stored information (ESI) is easy to destroy. This is a huge disadvantage for business owners or other parties preparing for a lawsuit. One of the Notice of Litigation advantages is that the sender legally requires the recipient to preserve certain evidence for future use. Many cases rely on business documents generated by the opposing party to prove their case. 

Notice of Litigation Considerations

Although a Notice of Litigation is not sent directly from the court, it is still an official document.  One of the Notice of Litigation disadvantages is that it’s not foolproof. In other words, if the opposing party chooses to disregard the notice, the sender may be out of luck and have to seek sanctions through the court. Additionally, what you do with a Notice of Litigation depends on whether you are the sender or the recipient. A recipient of a Notice of Litigation should:

  • Discontinue regular destruction of records
  • Preserve any new records received or generated
  • Preserve records in their original electronic form
  • Preserve hard copies of records

You’ll need to do all of the above until you receive notice that the matter is resolved. Always be sure to contact an attorney if you are unsure of a directive in a Notice of Litigation. If you need to send a Notice of Litigation, make sure that you do so as soon as possible. Delaying can cause vital evidence to be destroyed. 

Other Names for Notice of Litigation

Notices of Litigation have a few other commonly-used names. Some other names include:

  • Litigation Hold Notice 
  • Litigation Hold Letter
  • Preservation Letter
  • Stop Destruction Requests
  • Spoliation Letter

Regardless of the difference in title, they all describe the same legal document.

Notice of Litigation: Examples of When It’s Necessary

Depending on your business, there may be many scenarios that cause a party to initiate a lawsuit and send you a Notice of Litigation. For example, if your company recently had an accident occur on its property, there may be an incident report. You may also take subsequent remedial measures to correct whatever defect on the property caused the injury. Any documentation regarding these actions would need to be preserved once the notice is served.

Another example is if your company’s products caused someone injury. You may create discoverable business records by retesting the product to discover how an injury could have occurred. All of this information is discoverable if the injured party decides to file a lawsuit.

Summary

A Notice of Litigation is a legal document that directs a potential party to preserve business records, whether hard copy or electronic. The recipient must comply with the terms of the Notice of Litigation and cease the destruction of records immediately. 

We Can Help

We offer many business services to help small business owners start and run their companies. And we offer a Registered Agent Service to receive all of your important legal documents — like Notices of Litigation — on your behalf. We strive to make the paperwork and compliance details of running your company a breeze. This frees up your time and energy, so you can spend it where it matters most: running and growing your company.

Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.

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Written by Team ZenBusiness

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