By: Ryan M. Helgeson, Esq.
Businesses should be making early, proactive arrangements regarding e-discovery in anticipation of litigation to ensure cost-effective results. Electronic discovery ("E-discovery") is an emerging field in litigation. Due to the extent with which companies use computer technology to communicate and perform other necessary business functions, e-discovery can involve the culling through of hundreds of thousands or even millions of documents - this can clearly be very time consuming and expensive for the company. It is imperative that companies are aware early on in a dispute (even before litigation has begun) that electronically stored information may be at issue and may need to be reviewed to find relevant information.
In a recent Illinois federal court case (Life Plans, Inc. v. Security Life of Denver Insurance Co.), the court drastically cut the costs sought by the prevailing party, noting that a cooperative discovery plan, formed early in the litigation, would have limited both parties' expenses.
Often, the party that wins in litigation can seek to recover their costs and fees spent in that litigation. These costs and fees can include expenses involved with the taking of depositions, filing fees, and costs for copying documents. In this recent case, Security Life of Denver ("Security") sought to recover $117,130.66 in expenses, including over $95,000.00 for documents produced to Life Plans during discovery. However, Security was seeking recovery for costs for documents produced, whether those documents were produced in hard copy or in electronic format. The court concluded that Security could not recover the costs associated with locating and processing the electronic files because that was not considered to be "making copies" and, thus, was not a recoverable cost. Security was awarded $34,876.50, more than $80,000.00 less than they requested.
The court noted that even though the parties anticipated that e-discovery would be necessary and designated the format for such electronic production, the discovery plan did not discuss the cost of discovery. The court concluded that the case should serve as an example to "highlight the importance of parties focusing early in the case on the cost of e-discovery" and that the parties should come up with a discovery plan that included sharing of costs.
If you have any questions regarding electronic discovery or how your business can prepare itself for potential litigation, Attorney Ryan Helgeson is happy to help. Ryan can be contacted at Wessels Sherman's St. Charles office at (630) 377-1554 or via email at firstname.lastname@example.org.