Tuesday, April 19, 2011

Use the Preliminary Conference to Save E-Discovery Costs

I found a great article written by Michael B. de Leeuw and Eric A. Hirsch that strikes to the heart of the new ediscovery conundrum put in clear context by Senior U.S. District Judge Sandra S. Beckwith in Moody v. Turner Corp.,that the mere availability of vast amounts of electronic information can lead to a situation of the ESI-discovery-tail wagging the poor old merits-of-the-dispute dog.

Lawsuits are a every day reality for business entities today. The average U.S. company faces 305 suits at any one time; that number jumps to 556 for companies with $1 billion or more in revenue.

With each lawsuit comes the obligation for discovery -- production of evidence for presentation to the other side in a legal dispute. In the past, this evidence consisted primarily of paper records, such as contracts, bills of sale, printed correspondence and so on. However, with the dramatic fall in the price of electronic storage (I bought a 2 TB hard drive for under a $100 yesterday) , 95% of all business communications now are created and stored electronically. That places the focus on e-discovery: finding and managing electronically stored information (ESI)

All too often in today's litigation environment, electronic discovery issues turn into expensive deathtraps that threaten to overwhelm the merits of the actual dispute between the parties. But prepared litigants can and should take measures to avoid the "gotcha" pitfalls attendant to e-discovery long before the terabytes have been put through the thresher.

One of the best strategies for avoiding obvious e-discovery hazards (other than winning an early Twombly motion) is to become fully informed about a client's information technology structure at the outset of a case. By now, sophisticated litigants understand that taking this critical step helps clients comply with their production obligations and avoid spoliation claims. Of course, gaining the same familiarity with the other side's systems is equally important, particularly since doing so early in a case, before discovery requests are served, can lead to a more productive and efficient exchange of information.

The prevailing view in both New York state and federal courts is that parties are free to use discovery devices, such as the deposition of a corporate representative, to explore an adversary's information technology systems to discover the location of potentially relevant documents. But, as we know, formal discovery devices can be expensive and time consuming for both parties and are, therefore, not the most efficient ways to gather information.

While both the New York Uniform Trial Court Rules and Federal Rules of Civil Procedure contemplate that the parties will engage in a frank discussion early in the case about e-discovery, this process is all too often ignored or not fully taken advantage of. And that is a shame. By demonstrating to your adversary at an early stage that you understand your client's IT infrastructure and are prepared to answer basic questions about it on an informal basis, the costly use of formal discovery devices to explore these issues may be avoided.

Such preparedness may also force your adversary into a quid pro quo through which you can learn valuable information about the other side's systems.

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