Migrated from eDJGroupInc.com. Author: Greg Buckles. Published: 2012-07-11 06:51:07Format, images and links may no longer function correctly.
At the recent ECI event in Chicago, one of the moderators made an interesting observation that 95% of all civil cases end in settlement during the discussion on project managers in eDiscovery. That ratio was a bit lower than the typical discovery assessment metrics from my Fortune 500 clients, but it peaked my curiosity to see if real published study data existed. I found numerous unattributed comments purporting the rate to be 95-97% cases closed via settlement vs. trial, but the best recent study was a Florida Bar Special Committee report on the declining rate of jury trials. Even if you assume that the trial disposition rates below only correspond to the 11th Circuit and the Florida County courts, the trend is obvious. That 95-97% settlement rate was appropriate 25 years ago, but over 99% of all current cases now are disposed without trial. Despite that low trial rate, a much larger percentage of filed civil litigation will require some or full discovery effort prior to settlement. My question is, does the overwhelming settlement rate discourage litigants from investing in a thorough, defensible eDiscovery process?
Florida Bar Study on Trial Rates
Excerpt from Duke Law Study - click to enlarge
After all, the 2010 Duke Law survey of eDiscovery sanctions found less than 100 eDiscovery sanction cases in all 2009 civil matters. Even though sanction rates are growing fast, they are not common or harsh enough to be a realistic concern for most cases. I’m not saying that parties are or should completely disregard proper holds and collections. I am positing that far too many parties are going through the motions of hold notification and allowing custodians to haphazardly self designate collections instead of committing to learning and implementing real best practice for reasonable, defensible eDiscovery. Why should they take the time to really train custodians and to perform periodic compliance checks to ensure that there is not systematic non-compliance? As long as a vague compliance assurance and signature from counsel goes unchallenged, why do the actual hard work?
Beyond the risk of sanctions, if the parties KNOW that every matter will probably settle before trial, then discovery is more about pressure tactics than actual case merits or evidence. The typical non-disclosure clause of settlement agreements keeps us from having any real data, but I would bet that few if any settlement agreements include provisions for eDiscovery costs. So those costs are borne entirely by the defendants or their insurance company (typical disproportionate matter). Without an actual trial verdict, you have virtually no ability to recover your eDiscovery costs, so again there is no incentive to ‘do it right’.
I believe that the only reason that so many corporations are investing in eDiscovery readiness is a realization that the only way to control or recoup those costs is to integrate eDiscovery capabilities into a grander Information Governance business lifecycle. Forward thinking executives can see the need for broader ESI management capabilities and are willing to fund information management technologies like StoredIQ, Recommind, Exterro and others that offer more than network search and retrieval functions. I was shocked at the tiny fraction of cases that actually go to trial. No one wants to deliberately neglect their obligations, but litigation is a cost center rather than a profit center. I have to believe that only the high general level of counsel ethics has kept most corporations from completely ignoring preservation obligations on a cost/risk basis. What do you think? Is there a real business advantage to properly identifying, preserving and reviewing ALL potentially relevant ESI?
eDiscoveryJournal Contributor – Greg Buckles