Granted, losing evidence is (almost) never going to help your case. But that doesn't necessarily mean that your case will be dismissed.
Consider the Appellate Division, First Department's July 23, 2013 decision in New York City Housing Auth. v. Pro Quest Sec., Inc. In that case, the Housing Authority sought to recover damages in the aftermath of a fire at its premises. In the course of its investigation, the Housing Authority's Director of Security reviewed the surveillance video of the building's 6th floor from around the time of the fire, and in that process, edited the video footage, deleting camera views he considered unnecessary.
The Housing Authority discarded or lost the unredacted surveillance video. As a result, the trial court dismissed the Housing Authority's case.
In reversing the trial court's holding, the appellate court noted that while a sanction under these circumstances was certainly warranted, dismissal of the complaint in its entirety was unduly harsh a penalty because the video was not of an area where the fire supposedly began, and even without the video, the defendants would still have viable means of defending the Housing Authority's claims.
To that end, the appellate court stated as follows:
Dismissing an action is "usually not warranted unless the evidence is crucial and the spoliator's conduct evinces some higher degree of culpability" (Russo v BMW of N. Am., LLC, 82 AD3d 643, 644 [1st Dept 2011]). It is a "drastic sanction" and should only be done when a party has destroyed key evidence (Dauria v City of New York, 127 AD2d 459, 460 [1st Dept 1987]; see Sage Realty Corp. v Proskauer Rose, 275 AD2d 11, 16 [1st Dept 2000], lv dismissed 96 NY2d 937 ).
"The record does not support defendants' contention that dismissal is required because the unredacted video is key evidence without which they will be "substantially prejudiced" (Sage Realty, 275 AD2d at 17; see Metropolitan N.Y. Coordinating Council on Jewish Poverty v FGP Bush Term., 1 AD3d 168 [1st Dept 2003]). There are no cameras located inside the cafeteria, and no portion of the saved or deleted film would show exactly how the fire started. Moreover, defendant Pro Quest is not without the means to defend itself, because it could depose the people who were present in the building at the time of the fire, including Saba (see Shan Palakawong v Lalli, 88 AD3d 541, 542 [1st Dept 2011] [denying motion to dismiss because, although spoliation had occurred, there was other evidence available to the moving party]; see also Mendez v La Guacatala, Inc., 95 AD3d 1084, 1085 [2d Dept 2012]). As the security company, Pro Quest should have records of which employees were on duty at the time. Pro Quest also does not claim it has no access to information from other tenants whose employees or visitors might have entered the building during the critical period."
For additional information on this topic, please see "How NY's Courts Decide When to Sanction You For Mishandling Evidence."