I referred in a recent post to an article I had read which concerned the shifting of US e-Discovery costs from one party to another, that is, the situation where costs incurred by one side are taxed and payable by the other.

I was puzzled, because I was not aware that this was common in US courts, where they refer to costs recovery between parties as “the English rule”. If one has questions about such things, the man to ask is Craig Ball and, although I did not ask him, it turns out that he has written recently on this subject anyway.

His article Are We Just Makin’ Copies? has as its sub-title It’s time to treat certain e-discovery work as taxable court costs. What we seem to have here is a distinction between legal work and expenses such as (in Craig’s words):

filing, service, transcript, and witness fees. They may also include printing and photocopy costs, and fees of court-appointed officers, such as special masters and interpreters. They’re taxed against the losing party, so called “taxable costs.

What is recoverable varies between state jurisdictions. Their definition pre-dates electronic discovery, and gives rise to Craig’s suggestion that one must distinguish carefully between the two broad types of expenses when recording the costs of running the case.

The article gave rise to a comment by US Magistrate Judge Andrew Peck, and thence to a further comment from Craig Ball, both to be found here.

The subject has yet to be analysed properly in England & Wales, where questions about the costs of a technical expert to handle electronic documents tends to be confused with formal expert evidence e.g. as to authenticity. There is no published report, so far as I am aware, of a formal decision on e-disclosure costs which is of general application. The whole subject of costs recoverability is heading for a shake-up following the Jackson Report on Litigation Costs. You can catch the flavour of Lord Justice Jackson’s discussion on costs recoverability from these extracts

Disproportionate costs do not become proportionate because they were necessary. If the level of costs incurred is out of proportion to the circumstances of the case, they cannot become proportionate simply because they were “necessary” in order to bring or defend the claim. … The fact that it was necessary to incur certain costs in order to prove or disprove a head of claim is obviously relevant, but it is not decisive of the question whether such costs were proportionate. [Para 5.10 on page 37]

and…

In my view, that disproportionate element of the costs cannot be saved, even if the individual items within it were both reasonable and necessary. In other words, I propose that in an assessment of costs on the standard basis, proportionality should prevail over reasonableness and the proportionality test should be applied on a global basis. [Paras 5.12 and 5.13 on page 37].

There is no specific discussion about the recoverability of e-disclosure costs, but these extracts give you a flavour of  a general debate to come about necessity, reasonableness and proportionality.

What is clear is that both the UK and US need clearer guidance than exists already as to the circumstances in which e-discovery costs are recoverable, as a matter quite distinct from general or case-specific arguments about particular heads of expense.

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