The Real Cost of E-Discovery and Rising Nuisance Settlement Values

When an organization is sued by a former employee and their lawyer sends a “preservation notice” or begins to demand copies of email exchanges that span the globe, whether or not the case has merit, if the suit passes Rule 11 muster and can survive a motion to dismiss for failure to state a claim, the nuisance value to settle that case is going to be higher today than it was a year ago.

Bad email habits and ineffective policies have produced corporate cultures that retain everything. The confluence of increasing email volume and de facto permanent retention has created a massive information management crisis across all industries and businesses, including government. As a direct result of these circumstances, the cost of culling through and producing electronically stored information for discovery is sharply increasing defense and the baseline nuisance value to settle cases. There is no indication of meaningful changes to this trend in the near term.

How will courts will reconcile allowing a litigant’s right to have reasonable access to discovery in the interest of justice and the cost of producing information in a corporation that has does little to rationalize the way it manages information?


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