How long should documents be kept? It depends. Most causes of actions in Texas are governed by a limitations period of two or four years, depending upon the nature of the claim (although certain claims have periods which are longer, and others shorter). Your company should have a formal document retention policy that addresses the universe of documents received and generated in the usual course of business and the length of time certain classes of documents should be retained.
The failure to retain certain documents is termed ‘spoliation,’ and can give rise to an adverse instruction from the Court where the jury is entitled to presume that the destroyed documentation was damning to your case. In order for a party to be entitled to a spoliation instruction they must first establish prejudice to their case; that is, the missing evidence somehow hinders their ability to present their case. The primary focus of the prejudice inquiry for a spoliation instruction is the relevancy of the destroyed evidence. The more relevant, the more harm the spoliator should suffer from its destruction.
In determining prejudice, the trial court must consider whether the destroyed evidence was cumulative of other competent evidence the party can use and whether the evidence supports a key issue in the case. In making the determination of harm or prejudice, the court should also look at the availability of other evidence to take the place of the missing information. The non-spoliating party is simply not prejudiced if it has other evidence available to it that contains the same information as the evidence that was destroyed. If, however, there is no other evidence available to the non-spoliating party the instruction will likely issue.
If your company does not have a formal document retention policy in place – develop one now. Then abide by it. Your future may depend upon it.