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Changes Ahead For E-Discovery Rules?

As IT and corporate counsel struggle with the financial, technical, and legal burdens of e-discovery, efforts are under way to lighten those burdens by modifying federal rules. But others say changes aren't necessary.

A task force from the American College of Trial Lawyers and the Institute for the Advancement of the American Legal System aims to propose major amendments to the Federal Rules of Civil Procedure (FRCP).

Two years ago this December, FRCP rules were amended to clarify the role that electronically stored information (ESI) plays in civil litigation. But those changes dramatically increased the cost of litigation.

How expensive? While costs vary by case, Verizon developed an internal benchmark and found it cost the company $5,000 to $7,000 per gigabyte to process and produce ESI. Given that corporate litigation routinely results in hundreds of gigabytes of data, e-discovery alone can cost millions of dollars. IDC predicts the e-discovery industry will generate revenue of $21.8 billion by 2011, up from $9.7 billion in 2006.

"A system where costs are so prohibitive that only a small fraction of society can afford to litigate is not the system we are intended to have," says Justice Rebecca Love Kourlis, executive director of the Institute for the Advancement of the American Legal System. Kourlis is a former state Supreme Court Justice of Colorado.

The problem is vast stores of information have been opened to scrutiny without accounting for several critical factors. Those factors include lax or nonexistent information management practices within many enterprises, poor understanding by counsel and the judiciary of the technological challenges of making information accessible, and a lack of guidelines for what constitutes a reasonable discovery effort proportionate to the case at hand.

Kourlis says the task force created by the American College of Trial Lawyers and the institute is deliberating a set of proposed principles that would essentially rethink the notion of discovery.

She says the underlying assumption today is that everything is discoverable. But when you're dealing with ESI, says Kourlis, "it's like counting to infinity."

"We are working on ways to contain discovery in a way that produces the primary relevant documents but is also cost-effective and doesn't spin out of control."

That's good news for beleaguered IT executives and internal counsel as they grapple with the current e-discovery rules. But enterprises shouldn't expect the cavalry to ride over the hill any time soon. Kourlis says she'd like to see pilot projects at the state level in the next 12 to 18 months. However, changes to the federal rules, if they happen, could easily be six to eight years away.

Others in the legal profession argue that changes to FRCP aren't required. "The rules provide the teeth necessary to limit discovery and to limit costs to reasonable levels," says Thomas Smith, a partner at K&L Gates and a founding member of the firm's E-Discovery Analysis and Technology group. "My question is, will courts enforce those rules?"

"I'm not blaming the judges," says Smith. "They can't be expected to pore through the nuances of e-discovery rules and understand the nooks and crannies of a party's information systems. Counsel has to understand all that, and be ready to clearly articulate its position to the court."

Whether the rules change or not, e-discovery compels IT executives to take information management seriously, and that's a good thing. Aligning the organization's information management practices to make discovery as efficient and defensible as possible can pay dividends in other areas as well, including making e-mail systems more efficient, reducing storage costs, and better organizing information so that employees can quickly find what they need to be more productive.

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