Causes of Increased Litigation Costs

Gregory Joseph published an article entitled Federal Litigation--Where Did it Go Off Track? in the Summer 2008 issue of the ABA's Litigation magazine that helpfully lists a number of reforms to the Federal Rules of Civil Procedure (and their interpretation) over the past 25 years that have had the effect (intentional or not) of substantially increasing the cost of federal litigation. These include the expansion in the applicability of Rule 11 sanctions, the increased reliance on motions for summary judgment, new opportunities to challenge the admissibility of expert testimony, new rules governing class actions, new rules governing electronic discovery, and a re-statement of Federal pleading requirements (discussed below in my post of May 23, 2007).

Mr. Joseph believes that these changes have made a federal forum more desirable for defendants, and less desirable for plaintiffs. I would agree that these changes have made federal litigation more expensive, but I think the effects are not limited to creating a federal court advantage for defendants and a disadvantage for plaintiffs.
First, the effects of these changes are not limited to federal court. State practice also tends to follow the federal rules, whether by legislative enactments, judicial interpretations, or the translation by practitioners of federal customs and practices from federal courts to state courts. Therefore the effects of increased opportunities for procedural maneuvering in federal court trickle down to the state courts, and are increasing the cost and complexity of civil litigation everywhere.

Second, I think that plaintiffs have the ability to take advantage of rule changes as well as defendants. In some cases, it may be to the plaintiff's advantage to increase the cost of litigation, and to the extent the rules enable parties to do that, parties will take advantage of those opportunities.

What we ought to consider, in dealing with the next quarter century's proposals for procedural reforms, is whether it is possible to reverse this trend. We ought to pay more attention to whether new rules or their interpretation will have the effect of either streamlining or increasing the costs of litigation, and think hard about whether the system can bear additional procedural complexity. We ought to be trying to reduce the opportunities for wasteful and unnecessary motion practice. We should be trying to reduce the cost of discovery. We should be trying to create opportunities for litigants either to settle their disputes, or to try them expeditiously.

(photo from freedigitalphotos)