Companies and their outside counsel often retain various business consultants to advise on deals, and over the course of the deal, they may direct and oversee the consultants’ day-to-day tasks. But when litigation against the company concerning the deal becomes imminent and the company must take steps to preserve documents, a question may arise with respect to consultant’s documents. Notwithstanding the fact that such consultants are non-parties and separate legal entities from the company that retained them, must the company take steps to ensure that consultants’ documents are preserved? This article explores the current law and proposes considerations to help practitioners navigate the issue.

The Duty To Preserve Party Documents

The duty to preserve a party’s documents is well established under federal law. Actual and anticipated parties to a litigation have a common-law duty to preserve evidence when the party “has notice that the evidence is relevant to litigation or when [the] party should have known that the evidence may be relevant to future litigation.” ComLab v. Tire, 815 F. App’x 597, 600 (2d Cir. 2020) (Summary Order) (quoting Fujitsu Ltd. v. Fed. Express, 247 F.3d 423, 436 (2d Cir. 2001)). This preservation obligation does not require the party to retain “every shred of paper, every e-mail or electronic document, and every backup tape[,]” but it generally extends to the documents of “those employees likely to have relevant information—the ‘key players’ in the case.” Zubulake v. UBS Warburg, 220 F.R.D. 212, 217-18 (S.D.N.Y. 2003). Once the duty to preserve attaches, the party should issue a litigation hold and “suspend its routine document retention/destruction policy.” Id. at 218.