Florida E-Discovery Rules Being Fast-Tracked

After six years of study Florida is now fast tracking an e-discovery amendment to its rules of civil procedure.

Though technology is meant to streamline tasks, the way in which the resulting electronically stored information, also known as e-discovery in litigation, is stored, collected and produced has proven frustrating to many involved in the process.

“Most of the issues around e discovery — the cost of preserving, collecting and pressing through this vast amount of data ends up being more than what a case is potentially worth in terms of the lawsuit itself. And so, while the federal courts are still wrestling with this, so are e discovery service providers, and attorneys, and insurance companies with litigation and budgets,” said Dennis Hall, CEO of the South Florida-based Credence Corp., an e-discovery management company.

In 2006, Congress approved a change governing how e-discovery should be handled in federal cases. According to Hall, prior to 2006 the rules of discovery had not addressed electronically stored information.

“As a matter of fact, one of the 2006 federal rules was just to introduce electronically stored information as a form of discovery,” Hall said.

“That would include emails as well as Microsoft Word documents, Office documents, and over the course of time the definition has grown to include everything from voicemail. You can get audio that’s involved in these conversations now, as well as everything that’s on a hand held device, a PDA, a smartphone, etc.,” said Hall.

Even though there was no specific timetable set for the changes to be made, approximately two-thirds of the states have adopted some form of these rules governing electronically stored information, Hall said.

According to Hall, the specific rules centered on e discovery deal with legal provisions relating to pre trial conferences and methods of disclosure, failure to make disclosures, inadvertent destruction of evidence, production to opposing counsel and limiting scope in terms of proportionality and cost.

“So it really tried just to address these issues surrounding discovery that was in an electronic format,” he said.

“There was a subcommittee that was born out of the [Florida] bar, that’s leading the charge, if you will, with respect to adoption of what looks to be now the vast majority of the federal rules with the exception of the mandatory meet and confer conference, which is a conference between opposing parties to get together before any work is done with respect to electronically stored information to have a conference about its scope as well as how it would be collected, preserved, collected, processed, reviewed and produced,” said Hall.

When Florida attorneys and litigants can expect this change is still up for debate.

“What has been put forth at this point in time is that they’re looking for both committee wide, as well as bar wide acceptance. The next date that everybody has on the calendar is June. It’s anybody’s guess. I think there are a number of sources that you can follow and there’s no one reporting anything other than fingers crossed,” Hall said.

The impact of these rules on insurers and others involved in lawsuits largely lies in how the electronic information is stored and the costs associated with collecting, storing and producing the information.

“There are a couple of issues. There’s overwhelming support for adoption. But what you find is, in the two camps, there’s an argument that the rules bring about more requirements for both the companies involved with respect to potential litigation as well as the knowledge that the attorneys must have,” Hall said.

“Ultimately, if you’re driving up costs associated with litigation and the duty to preserve what ends up being, with most computers and electronic sources of information, vast amounts of information then how much of that information is potentially relevant? And then, how much of that potentially relevant information has to be reviewed?” Hall said.

“The opposing argument…to kind of give both sides is that basically you can’t stick your head in the sand with respect to the voluminous amounts of e discovery and the rules actually speak to the fact that both attorneys and judges need to become more proficient in understanding these sources,” he said.

Federal Court Sanction Concerns

The rules are especially important in the wake of several federal court sanctions that have been handed out to both attorneys and non-complying businesses specifically centered on e-discovery preservation, Hall said.

“There’s a number of…federal court sanctions that have been handed down. Some of them are monetary in nature and others are adverse instances with respect to cases, all the way up to just flat out dismissal of cases due to failure to follow the guidelines. Those sanctions exist in the federal court system today. As a matter of fact, there’s even a body that tracks the number of sanctions that take place with respect to e discovery since the new rules. And, from a percentage perspective as I mentioned earlier, the vast majority of those, two thirds or more usually deal with preservation, the issues revolving around preservation of evidence,” Hall said.

A study published by the Duke Law Journal of sanctions relating to e-discovery handed down prior to 2010 found that the number of sanctions is increasing, appearing in all courts on all types of cases. In addition, the study found that defendants were three times more likely to be sanctioned for e-discovery violations, a trend that has held firm for the past 10 years. Failure to preserve e-discovery was found to be the most frequently sanctioned conduct.

Hall said that until the new rules take effect in Florida, if the information is relevant, it must be produced if requested, regardless of whether it is electronically stored.

There are ways insurers can manage the increased costs associated with abiding by e-discovery rules as states put them into effect.

“These synergies that are being created at the federal and state level create economy of scales that insurance companies that operate in multiple states can leverage. So, trying to understand what that means is understanding the existing system first, which is dis separate lawyers with dis separate rules throughout the country operating their review in a very non efficient manner, so not leveraging technology, and doing what we typically call the linear based review — literally looking at every document,“ Hall said.

According to Hall, in the e discovery world of cost typically the largest expense is the attorney review expense.

Insurers can avoid inefficient handling of e-discovery by taking more control and leveraging technology, Hall said.

Instead of having individual attorneys throughout the country using individual technologies, review platforms and data reduction strategies on a case-by-case basis, Hall recommends insurers handle that in house, using an outside firm to leverage technology and infrastructure at their level, and then disseminating it out. This, he said, ultimately reduces attorney review time and saves money.

Hall said that new methodology is changing the face of e-discovery from a service provider perspective. In the past, the focus was at the case level resulting in individual pricing.

Now, there are fixed price methodology models, like the kind Hall’s company uses. Akin to a SaaS or a cloud based model, Hall said insurers and other companies can leverage technology on all cases and create cost predictability by having a fixed flat fee.

According to Hall, while courts are trying to determine the relevance and accessibility of electronically stored information, technology is allowing others to weigh the value of a case against “the spend” — the cost of pulling the information and reviewing it.

“We can leverage infrastructure and technology to create efficiencies to reduce cost and create cost predictability is something new in e-discovery and something that you’ll hear more and more about as time goes on,” Hall said.