Litigation: “Spoliation of Evidence” Where Records Are in the Hands of Service Provider
Posted October 9, 2009 by Bierce & Kenerson, P.C. · 
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Principle decision: A customer’s failure to identify the existence of, or provide, business records held by a service provider constitutes spoliation of evidence and justifies a directed verdict in favor of claimant suing the Customer.
Customers, especially government bodies, can be classic deep-pocket defendants in personal injury tort litigation. If the customer fails to produce records of its maintenance and custody of facilities that it is legally liable to maintain, a court could find that the customer engaged in spoliation of evidence. Such spoliation warranted a decision that the customer inexcusably prejudiced the claimant, and that the customer’s answer to the complaint was stricken, resulting in a directed verdict for the injured claimant.
In a New York decision in July 2002, the court noted that, if the customer (The City of New York) had named the service provider during the discovery phase of the injured third-party claimant’s litigation, the claimant might have been able to sue the service provider or at least obtain records that could be used in suing the customer. In this case, the service provider, an engineering firm, had contracted to manage the City’s traffic control detectors, and the plaintiff alleged injuries sustained while riding a bicycle into a traffic control detector.
Lesson #1:
Customers need to be aware of the contractor’s management of facilities and must disclose, in litigation, the service provider’s role in facilities management. Amankwaah v. The City of New York, ___ NYS2d ___, NYLJ July 1, 2002, p. 31, col. 5 (NY Supreme Ct., 2nd Dept. 2002).
Lesson #2:
If the parties expect that the service provider will have to defend against claims of third parties, in the outsourcing agreement they should allocate the financial and legal liabilities of such claims.
Lesson #3:
The outsourcing contract should also have provisions governing records maintenance and management.
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Filed under: White Paper
Tagged: outsourcing, personal injury tort litigation, Principle decision, records maintenance