Cost of E-Discovery

Cost of E-Discovery

In “E-Discovery: Opt For Major Changes Rather Than Tinkering At The Edges of the Rules,” a recent interview in The Metropolitan Corporate Counsel, Beth Rose, a Member at Sills Cummis & Gross P.C., discusses the costs of e-discovery—both monetary and the effect they have on litigation.

As there is what Rose calls a “renewed focus on litigation budgets and controlling costs,” firms are looking for the reasons behind e-discovery costs in an effort to reduce spending. Rose cites notice pleading as a key reason for high costs. She states, “Notice pleading rules allow plaintiffs to make very broad allegations.” This wide scope makes it difficult for the defendant to “[resist] broad e-discovery demands on the grounds that the information is not relevant.”

Along with notice pleading, a possible future culprit for the widening scope of e-discovery is H.R. 4115, which is currently pending in the House of Representatives. According to the article, H.R. 4115 “…prohibits a federal judge from dismissing a case unless it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim.” Rose states that this will “open the flood-gate for meritless claims,” causing “ever increasing and out-of-control e-discovery costs.”

 With e-discovery costs on the rise and the scope of discovery broadening, it is important to question whether or not the costs are justified by the relevant information e-discovery uncovers. Unfortunately, Rose states, “No. My experience has been just the opposite.” She cites a case in which Rule 803(18) prevented large portions of documents from being presented to the jury during trial. As the documents were not even used in the case, the large price tag on e-discovery seems even more daunting and unreasonable.

Empty pockets are leaving many to wonder how to reduce e-discovery costs. Rose credits the decisions in Twombly and Iqbal, namely Twiqbal, with giving “federal judges the ability to insist on factually plausible pleadings before discovery costs are incurred.” Although these decisions help to limit the scope of discovery, Rose cites four recommendations from the White Paper Reshaping the Rules of Civil Procedure for the 21st Century as a means to reducing e-discovery burdens. She states:

The White Paper made four recommendations for changes in the federal rules, namely the implementation of the pleading standards in Twiqbal; limitations on the scope of discovery; explicit guidance on the preservation of information; and approaches to reducing discovery costs.

Narrowing the scope of e-discovery through regulations can greatly reduce costs. Although, however reasonable this solution sounds, it seems a long way off. In the meantime, firms can control e-discovery costs by making smart choices when choosing keyword filters and de-duping the data set. 

The seemingly extreme burden of e-discovery costs and the concern associated with them leaves the fate of litigation in unknown hands. Are fewer cases brought to trial because of the fear of e-discovery costs? According to Rose, “Even before the advent of e-discovery, the number of cases tried was on the decline.” However, she does mention, “…the costs of e-discovery can be staggering and in certain cases, those costs may be part of a party’s evaluation regarding whether or not a case is defended through to verdict.”

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