The practical turning point is when a reasonable person in your position would expect a lawsuit. That moment has real legal A business dispute becomes litigation long before anyone files a complaint.
The practical turning point is when a reasonable person in your position would expect a lawsuit. That moment has real legal consequences for how you handle your documents, your communications, and the dispute itself. For established Georgia companies, what happens in those first few weeks often shapes the outcome more than anything that happens later in a courtroom.
Two obligations start running immediately. Most business owners do not know about either one.
Your duty to preserve evidence starts before you are sued
Most business owners assume they can keep running their normal document retention practices until a lawsuit actually lands. In Georgia, that assumption is wrong.
Georgia law treats spoliation as the destruction or failure to preserve evidence necessary to contemplated or pending litigation. Under the Supreme Court of Georgia’s decision in Phillips v. Harmon, the duty to preserve is triggered when litigation is reasonably foreseeable to the party holding the evidence, not when that party receives a demand letter or gets served. Constructive notice is enough. Even negligent destruction can qualify.
The exposure here is rarely a shredder. It is routine automation:
- Email retention rules that purge after 90 days
- Text threads on a project manager’s phone
- Video recordings that overwrite on a 30-day loop
- A job file that gets archived when the project closes
If a dispute is heating up, those systems need to be paused deliberately and documented.
What spoliation can cost you
The penalties for spoliation of evidence in a lawsuit can be severe. A party can be ordered to pay fines or attorney’s fees, or even have their case dismissed by a judge.
Courts also have discretion to instruct a jury that it may presume the missing evidence would have hurt the party who lost it. That instruction is often more damaging than the evidence itself would have been.
Assume every message you send becomes an exhibit
Once a dispute is live, internal email, text messages, and Slack threads are all discoverable. The instinct to vent in writing, or to explain your side in a long unguarded message to the other party, almost always costs more than it gains.
There is a specific Georgia reason to be deliberate here. Under O.C.G.A. § 13-6-11, a party who specially pleads for them may recover attorney fees and litigation expenses where the other party acted in bad faith, was stubbornly litigious, or caused unnecessary trouble and expense.
Georgia courts have held that the bad faith prong looks at conduct in the underlying transaction, not at how someone behaves once the case is filed. In practice, the written record you create while the dispute is still preliminary is the record a jury may later examine on that question.
It works both ways, which is why carefully documenting the other side’s conduct matters as much as watching your own tone.
Talk to someone before the position changes
If a dispute at your company has reached the point where litigation feels possible, get counsel involved now, not after a complaint arrives.
Ron Debranski represents established companies and entrepreneurs throughout Cherokee County and Georgia in business and contract litigation, partnership and shareholder disputes, and the transactions underneath them. Contact Debranski & Associates to discuss the status of your matter.
This article is provided for general informational purposes only and does not constitute legal advice or create an attorney-client relationship. Laws change and every situation is different; consult a qualified attorney about your specific dispute.