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Cost-shifting in E-discovery: Options and Opportunities

September 2, 2014

It is no secret that e-discovery costs can account for a substantial portion of a company’s costs to defend a lawsuit. According to one study, e-discovery costs alone can account for as much as 90 percent of litigation costs. Another study indicates that e-discovery costs for a typical midsize lawsuit run about $3.5 million.

With costs of this magnitude, it's also not surprising that cost-shifting is an important subject for inhouse counsel in charge of e-discovery. There are two routes defendants typically pursue to recoup e-discovery costs: via the federal rules while litigation is pending, and via 28 USC §1920 postjudgment. Regardless of the route, a defendant’s ability to recover costs may be limited. A defendant may be able to recover technical costs associated with producing electronically stored information (ESI), especially if that ESI is considered inaccessible; however, it is less likely that a defendant would be able to recover the costs associated with reviewing that ESI for privilege or relevance, which typically account for the bulk of e-discovery costs.

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