Minimizing Discovery Costs

Sunday, April 3, 2011 - 01:00

Editor: What are some preemptive practices and policies one can use to avoid conflict and minimize discovery costs when disputes arise? Are companies incorporating these concepts in their contracts?

Dreier: Enter into contracts with a view that the unexpected does happen, and you may need to cut losses. Start with the contract itself. Spend some time with your attorney to preserve your rights in unambiguous terms. Cover topics such as: (1) clear duties on both sides with costs allocated; (2) warranty and damage limitations; (3) choice of law and forums; (4) permitted remedies; (5) periodic performance reporting and audits; (6) required open documentary exchange and examination during the contract period; (7) mandatory negotiation, mediation and arbitration, with limited discovery; and (8) mediators and arbitrators pre-chosen from those known to you or selected from respected organizations such as AAA, CPR, JAMS. You can even provide for early case assessment, discussed later. Remember that mediation avoids decisions imposed by others, and arbitration means no runaway juries and costly appeals and retrials.

Choose attorneys similarly committed and who reject warfare litigation. Surgically focus on the actual dispute without demonizing the adversary. Concentrate on the future best interest of the company, not punishment for past wrongs. Remember that the cost of protracted litigation usually means that both sides lose in the end. Although many attorneys may not want to go into an arbitration "flying blind" and want extensive depositions, be willing to risk a limitation of depositions to those absolutely necessary, if any. E-discovery beyond usual email searches and exchanges is extremely expensive and is usually unnecessary. Curb this. Also limit the constant motion practice engaged in by some attorneys. You are the client. A simple telephone call can prevent many motions. As has been recently urged by the president and CEO of AAA, help hold down costs and speed up the process.

Editor: What situations are most likely to benefit from early case assessment?

Dreier: Early case assessment is a newer concept that has been sparingly used by the ADR community. It takes two forms: (1) a single mediator who assesses the problem for both sides and helps resolve it, and (2) a private assessor who consults with a single party and who may then meet with a similar representative of the other side, but will not represent the party as an advocate in litigation or arbitration. It is the equivalent of a non-binding early arbitration or evaluative mediation with or without counsel. In theory, it should be the least expensive way to settle disputes between receptive adversaries. If attempted before or in conjunction with traditional facilitative mediation, the assessor(s) can work in an atmosphere of cooperation.