Cost-Shifting in Insurance Litigation Discovery: Where We Are and Where We've Been

Now more than ever, discovery is driving litigation like the tail wags the dog. Aggressive plaintiffs' attorneys are using discovery as a weapon to drive up defense costs and generate settlement leverage, while aggressive defense attorneys are using discovery disputes to stall cases and generate leverage of their own. This is causing an explosion of costs related to discovery, especially in the context of electronically stored information, where there is an entire cottage industry dedicated to taking a slice of legal defense budgets in the form of document hosting, tagging, and preparation of production. This trend is especially pronounced in insurance coverage and insurance defense litigation, where plaintiffs' attorneys often try to drive up defense costs as high as possible in order to push insurers into settling.     

Due to the rapidly-increasing costs being expended in discovery, the ability to shift a percentage of discovery costs onto the opposing party has never been more important. Insurance companies tend to be especially diligent about keeping records and electronically stored information, which only increases the volume of potential production. This makes cost-shifting particularly important in the insurance context, as it provides a powerful disincentive for requesting parties to engage in "litigation by attrition." 

We all know the long-standing general rule that a party must ordinarily pay its own costs to respond to discovery, but effective December 1, 2015, Rule 26 of the Federal Rules of Civil Procedure was amended to expressly address cost-shifting in discovery, a practice that has already been employed in many states and federal districts. While this rule-change may not usher in a new era where the requesting party is routinely expected to shoulder a portion of production costs, it coincides with a nationwide judicial trend toward acceptance of the concept of cost-shifting, and provides express authority that may prompt courts to be even more willing to consider cost-shifting orders.    

This course, presented by William Murray, a partner and seasoned trial attorney with Gordon & Rees, along with his forward-thinking associate Steven Zakrzewski, provides an overview of the case-law addressing discovery cost-sharing and recent changes to the Federal Rules directly addressing cost-sharing. The presenters give their assessment of development trends in cost-sharing, and also share real-world examples from their own litigation experience and practical tips to assist attendees in setting up and utilizing cost-sharing motions as another element of their litigation arsenals. 

Learning Objectives:

I.    Explore pre-2016 case-law addressing requests for cost-sharing in discovery

II.    Review the recent changes to the Federal Rules of Civil Procedure addressing cost-sharing in discovery, and related changes to the Federal Rules that took effect in the past eight months

III.   Assess developing trends in discovery cost-sharing and the likely effects of the recent amendments to the Federal Rules

IV.   Gain practical tips and examples to help insurance practitioners assess when and how to seek cost-sharing