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Why is the Discovery Process So Expensive?
Cindy Khin  |  April 26, 2011

Question:  Why is the discovery process so expensive?



Cindy KhinAnswer:  Discovery is typically the most expensive part of the pre-trial process.  During discovery, most of the case’s information is collected and reviewed in preparation for trial.  The process of collecting information—accomplished through initial disclosures, interrogatories, admissions of fact, requests to produce, and depositions—is expensive because it involves the production of substantial amounts of data.  Each party is allowed to discover any information that is relevant to the case, typically amounting to a mass of paper and electronic documents.  Once collected and prior to production to the opposing party, each document must then be reviewed by an attorney, further adding to the discovery bill.

Information that is "discoverable", or which may be sought by the opposing party during discovery, includes both paper and electronic documents.  In fact, counsel has the obligation to locate all sources of potentially relevant information, whether in paper or electronic form.  The collection of electronic information from computers and network servers can be an onerous process for a company, often requiring the assistance of a third-party vendor that specializes in electronic discovery.

Preparing key witnesses for depositions and conducting the depositions themselves can also be an expensive part of the discovery process.  The information obtained in depositions can significantly impact a case, so witnesses must be prepared carefully.  Companies incur the legal costs associated with such preparation.  During depositions, a court reporter and attorneys for both sides of the case are present, also adding to the costs.  Finally, cases involving medical products almost always include depositions of expert witnesses, which are often very expensive to obtain.

Insurance companies typically do what they can to reign in discovery costs.  For example, Medmarc requires attorneys to receive prior approval for expenses, because we want to encourage them to think about the direction of their cases and focus on what needs to be done to resolve them.  We also ask defense counsel to outline discovery plans, taking the most cost-efficient course necessary to implementation.

Cynthia Khin is the Chief Claims Officer for Medmarc Insurance Group.  She provides claims administration and litigation management to over 1000 drug and medical device companies.