Advancements in technology and communication have presented an overpreservation conundrum for forward-thinking companies determined to protect their reputations in the event of litigation. For example, at a recent conference on preservation and sanctions, a company that had no litigation pending, but anticipated such a dispute, noted that it had no adverse party with whom to negotiate regarding the scope of its preservation obligations. Still, the company reported spending $5 million on preservation and an additional $100,000 per month to separate and preserve information in the event that litigation ensues.1 The company described another matter for which it estimated the amount in dispute to be less than $4 million, but nonetheless felt compelled to preserve documents from 57 custodians, resulting in expenditures on preservation alone of $3 million.2

The proliferation of electronic communication and electronically stored data has made such no-win situations commonplace for actual and prospective litigants. Should a potential litigant continue to pay $100,000 per month to preserve information for a litigation that may never happen? When is it safe for the client to stop paying to preserve the data? If the client does not continue to preserve the data, might it be branded a "spoliator" and subject itself to sanctions?

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