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Civil Litigation Histories and the Hiring Practice

civil litigationSince Edward Snowden became a household world, people are becoming more aware of background checks. Anyone with more curiosity is also learning what components make up the typical background check. Criminal convictions, driving records, credit histories and drug testing are some of the areas investigators are interested in knowing about. There’s still one item that isn’t often understood, except by lawyers. The power of civil litigation histories for employment purposes.

Civil litigation histories are usually not understood by layman and often even businessmen. While criminal convictions, driver’s license checks and credit reports can be easy to spot based on information such as date of birth, social security number and physical description, civil litigation histories don’t contain any of these normal identifiers.

Define “Civil Lawsuit”

A civil lawsuit is simply a concern between two people, or parties, where one individual claims wrongdoing against someone else. Civil lawsuits run the range from dog bites to car accidents to evictions. Wrongful death claims can also be tied up in civil lawsuits.

As civil disputes are between two parties, they usually don’t involve anything that would effect public policy. The disputes tend to be between the two parties involved and may end up being a matter of public record. It is up to the investigator looking into civil filings to tell whether any civil lawsuits are pertinent to the company’s hiring practices.

A Brief History of Litigation Screenings

In the past, the decision to investigate litigation histories started with banks who wanted to determine if a person to whom they were interested in lending money was litigious. If the recipient of the loan was found to be litigious, then the bank was concerned that their money was at risk of being attached by a third party who was engaged in a civil suit with the borrower.

As this was going on, the law community felt that this research was also important to lawyers who wanted to determine the “litigation posture” of either a potential client or opponent. This eventually evolved into a very important part of the Due Diligence process. From there, businessmen started scrutinizing litigation records when they were involved in business related dealings such as acquisition, sale of a business or before taking a privately held company public. From there it grew to be included in the screening process of job candidates.

Understanding the Costs

Since the normal identifiers, birth dates, social security numbers and the like, are not usually available in civil litigation files, the cost and confusion has risen. If a lawsuit is discovered that involves a party with the same or similar name as the proposed job candidate, then extra effort must be made to either include, or exclude, the potential new hire. The challenge became bigger with the Gramm-Leach Bliley Act and other statues and this has driven up the cost of a legitimate suit. To hold down costs, most searches now consist of two parts:

1. The index search which identifies all suits attached to the name in question.

2. The second is the file review and retrieval process which will authorize the researcher to get a copy of the file to read for the purpose of determining if any information contained refers to the subject in question.

Part one is billed on a per unit basis and part two is billed on either a per unit basis or an hourly basis, depending on the jurisdiction.

The Bottom Line

With the plethora of screening tools available, civil litigation checks should be used wisely and performed by research firms that thoroughly understand what information is being searched for and for what intended purpose. Civil litigation histories should only be used as one tool in the screening toolbox of a business seeking to hire a candidate.

An attorney experienced in business law should be consulted for further information on how to avoid minefields as well as cut related costs.

© 2012 Leon Jacobson, Esq., all rights reserved
Bukh Law Firm P.C., 14 Wall St, New York NY 10005

New York commercial litigator Leon Jacobson, Esq - logo

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