What Is Spoliation of Evidence?

After an accident, evidence can take a variety of forms, from audio recordings or malfunctioning equipment to data or supplier records. When evidence that pertains to a claim or legal case is compromised, altered, damaged, or destroyed - whether intentionally or negligently - it's called evidence spoliation, and it can have costly repercussions for either side.

Spoliation of evidence can occur in all types of scenarios, not just physical mishaps. Evidence can include:

• Digital information. Emails, text messages, digital photos, videos, cell phone or voice recordings, data, and electronic records fall under digital evidence.
• Physical records. Maintenance and repair documents, inventory records, safety inspection checklists, incident reports, and written statements fall into this category.
• Equipment or physical items. Vehicles, devices, railings, rugs, or other items involved can all be used as evidence for a claim or legal case.
  
  

Who Is Responsible for Evidence Preservation?

After an incident, the duty to preserve evidence falls to the allegedly responsible party, often the insured. In the aftermath of a data breach, for instance, an organization that doesn't practice preservation of digital evidence may be unable to protect itself from liability. Claims adjusters may be forced to settle the claim for a higher amount than if the critical evidence has been preserved.

If the claim makes its way to court, the insured could be sanctioned, a plaintiff may use a spoliation defense, and/or the judge could ask the jury to consider whether the missing evidence would have been unfavorable to the insured. This shift in the burden of proof can cause a devastating outcome for an organization, one that could have been mitigated through proper evidence handling procedures.

Real-World Examples of Spoliation of Evidence

The lack of evidence preservation became a core issue in each of these cases:

• Slip and fall case. A customer alleged that they slipped and fell on a wet floor. When the case went to trial, video of the incident was unavailable as it had been recorded over. The judge advised the jury that they couldn't consider the missing video evidence, and the organization lost the case.
• Sauna timer case. An individual was found unresponsive in a sauna and later passed away. A claim was filed against the organization that managed the sauna, alleging that although the person had fallen asleep, the sauna's timer was faulty - leading to his death. The organization replaced the timer before it could be inspected, leading to a multimillion-dollar settlement.
  
• Disposal of an Inflatable. A child was injured on an inflatable bounce house. The organization disposed of the bounce house after the notice of the claim. A motion was filed against the organization for sanctions and a partial motion for summary judgment based on destruction of evidence.

Best Practices for Retention of Evidence

When determining which evidence to keep after an accident, always err on the side of caution. Comprehensive evidence preservation can potentially avoid costly judgments, so it's essential to have clear evidence handling procedures in place.

Here are some guidelines to build an evidence retention policy to avoid the pitfalls of spoliation of evidence:

• Create incident response policies. Include clear rules around retention of evidence and communicate these to your entire team, including how to complete reports, which items should be preserved, how to preserve evidence, such as video and data, and where these items should be stored.
• Educate your team about surveillance systems and cameras. Relevant team members should know how long video recordings will be available before they're erased or recorded over and how to obtain recording copies for an incident file. It's usually best to immediately retain the necessary video and double-check that the information was copied and stored in a safe place.
• Thoroughly document incidents, even if they don't seem serious at first. For instance, if someone slips and falls in your building but declines medical treatment and leaves quickly, an incident report should still be completed. This written documentation, as well as video footage, should be preserved in case the individual obtains medical treatment and submits a later claim.
• Secure physical items involved in an incident. These should be kept intact and never leave your organization's premises. If there is damaged equipment related to the incident, for instance, include a documented inventory with descriptions of the items and their location. Advise your team to not dispose of damaged equipment or components.
• Consider the timeline of repairing evidence. If repairs must be made to faulty or damaged equipment or infrastructure, consult your insurance agent or claims adjuster beforehand. Keep thorough records of the repair, including time stamps and before-and-after photos.
• Keep digital documents in a secure incident file. This incident file should be as comprehensive as possible and accessible to relevant members of your team.

Bottom line: Having post-accident protocols in place can be as key to mitigating loss as pre-incident risk management - and help you avoid the consequences of spoliation of evidence, including costly liability. If you have questions, don't hesitate to reach out to your agent, risk management consultant, or claims adjuster for additional guidance.

To find out more about PHLY's Risk Management Services, contact us at PHLYRMS@phly.com.

_{IMPORTANT NOTICE - The information and suggestions presented by Philadelphia Indemnity Insurance Company are for your consideration in your loss prevention efforts. They are not intended to be complete or definitive in identifying all hazards associated with your business, preventing workplace accidents, or complying with any safety related, or other, laws or regulations. You are encouraged to alter them to fit the specific hazards of your business and to have your legal counsel review all of your plans and company policies.}