Empirical Findings Inform Different Approaches to Discovery Reform

by Michael Ley on November 8, 2012

One of the principal goals of the Colorado Civil Access Pilot Project (CAPP) is to streamline the discovery process and thereby reduce the cost of litigation.  Ultimately, CAPP’s success in reducing total litigation costs depends on how big of a problem the discovery process actually is.  Suffice it to say, there is not agreement on this point, as best illustrated by the differing empirical findings of the Federal Judicial Center and the Institute for the Advancement of the American Legal System.

The Federal Judicial Center (FJC) is the education and research agency for the federal courts.  The FJC surveyed more than 2,000 attorneys of record in federal civil cases terminated in the last quarter of 2008. 1  The FJC found median litigation costs, including attorney fees, of $15,000 for plaintiffs and $20,000 for defendants.  It also found a strong correlation between the stakes of a case and total litigation costs. Specifically, all else being equal, if the stakes in a case double, litigation costs increase by 25 percent.  Finally, the FJC found that the median percentage of total litigation costs accounted for by discovery was 20 percent for plaintiffs’ attorneys and 27 percent for defendants’ attorneys. The FJC researchers suggest that “before any further amendments to the discovery rules are proposed in the name of reducing costs, more effort must be made to define the problem that such rule amendments are supposed to address.” 2

The Institute for the Advancement of the American Legal System (IAALS), headquartered at the University of Denver, helped develop CAPP and is currently tracking its progress. IAALS surveyed the impressions of thousands of American College of Trial Lawyers Fellows nationwide.  IAALS found that survey respondents overwhelmingly believed that the costs of litigation were not proportionate to the value of a case.  Those surveyed also indicated that cases involving less than $100,000 are not cost effective to litigate. 3 Finally, the IAALS study found that the median estimate of the percentage of litigation costs attributable to discovery in cases not going to trial was 70 percent. 4

The differences in findings are stark.  The FJC found that litigation costs are generally proportionate to the stakes in litigation; IAALS found the opposite.  But perhaps the largest contrast is the share of litigation costs attributable to discovery.  If the FJC is correct that the discovery process only accounts for 20 to 27 percent of total litigations costs, we would need to temper our expectations for CAPP’s goal of reducing total litigation costs. If, however, discovery accounts for 70 percent of total litigation costs, then we might remain optimistic that CAPP will significantly decrease costs and thereby improve access to the civil justice system.

In my humble opinion, if there is a problem to be solved by CAPP, it’s that cases with relatively little at stake can cost so much that they are not cost-effective to litigate.  While I find the FJC’s empirical results more persuasive than its IAALS counterparts, the FJC findings do indicate that litigation costs are more of a problem for cases with less at stake. 5  I believe that CAPP, if respected by attorneys and strictly enforced by judges, can reduce the overall costs for cases with less at stake (i.e., approximately $100,000 or less). 6  This may not be the far-reaching result that the CAPP creators envisioned, but it would certainly constitute progress.

Notes:

  1. For an in-depth summary of the differing empirical findings in this area, see Emery G. Lee & Thomas E. Willging, Defining the Problem of Cost in Federal Civil Litigation, 60 Duke L.J. 765 (2010).  Unless otherwise indicated, all statistics in this blog are taken from this article.
  2.  Id. at 768.
  3. A History and Overview of the Colorado Civil Access Pilot Project, available here.
  4. To clarify, the IAALS survey inquired only about cases not going to trial, while the FJC study included all cases. Lee and Willging do not discuss this difference in their article, but given the very low percentage of cases that go to trial (according to the article cited in footnote 3, the district court civil trial rate in Colorado is 1 percent), I would not expect it to significantly affect the statistical outcome or the ability to accurately compare the FJC and IAALS numbers.
  5.  See Lee & Willging, supra note 1, at 788 figs. 1 & 2.
  6. I will concede that CAPP’s effectiveness in this regard may be somewhat muted by the existing availability of CRCP 16.1.  However, everything I have read indicates that Rule 16.1 is sparingly used. As CAPP is mandatory, it will most likely have a stronger impact on reducing costs.

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