through aggressive use of technology, including key- words or concept search. The goal is to reduce the amount of data for counsel to review. Electronic dis- covery is a process, which can offer cost-predictability. While it may be difficult for counsel to provide a good cost estimate for the case overall, (due to the unpre- dictability of litigation), an electronic discovery vendor can usually provide a reasonably reliable estimate.
Upon receipt of an electronic discovery estimate, the initial legal reserve may be set. The benefits of setting an early reserve cannot be understated, as sometimes this initial estimate appears to be higher than the value of the case, promoting initiation of settlement discus- sions. When defense counsel renders its estimate of the defense of the case through trial, this number should be added to the electronic discovery estimate. The com- bined estimates will constitute the legal reserve. As the electronic discovery and litigation process continues, the estimate may have to be revised if more data is col- lected or the universe of documents does not decrease
as anticipated.
As the case approaches settlement or trial, the core documents will be separated from the rest of the data and reviewed for relevance and privilege. As reviewers make determinations for either privilege or relevance, an audit trail should be preserved so that documents may be retrieved at any time. Finally, the documents are produced to the other side and the case will close once there is payment.
Traditionally, information from the discovery process revealed potential liability or shed light on additional facts. But today, electronic discovery also reveals in- formation about the cost of the case. In large security class action disputes, for example, the cost of litigation, including electronic discovery costs, could erode the primary policy limits. Early assessment of discovery costs is important to ensure the insured is not left re- sponsible for defense costs it could have avoided or at least expected.
Like any other information related to claims, the in- formation gathered about the insured’s electronic discovery processes and readiness is (or should be) 38
shared back with the underwritingpolicy, com- pleting the circle.
The information also enables the underwriting department to explain why defense costs are so high, and to help motivate the insured to be pro- active and tighten up its processes. The result is better decisions by all, hopefully, a better rate for the insured.
Electronic discovery is a critical part of the litigation process. Sanctions, preservation, and meet-and-confers present risk, require prepa-
ration, and demand preparedness. Insurance carriers covering defense costs in any claim now frequently include electronic discovery in their coverage analysis. The rising costs of electronic discovery not only will increase defense costs but will also affect the handling and resolution of a covered claim, but, as al- ways, planning and proactive steps can reduce cost and risk for all involved.
Jennifer Rothstein is an attorney and Insur- ance Discovery Consultant with ACT Litigation Services, one of the country’s oldest and most successful complex litigation automation firms. She advises insurance carriers, brokers and their insureds on litigation and discovery. She can be reached at
jrothstein@actlit.com.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68