Federal Rule of Evidence 502 was enacted this past year to help alleviate the costs of electronic discovery. One of the most expensive aspects of any document review is the privilege review but the importance of preserving the attorney-client privilege and other privileges prohibited attorneys from conscientiously skimping on the privilege review process.
Rule 502 was enacted in response to the increasing costs brought about by the review of electronic documents with the intent of relaxing the rules when it comes to waiver of any privilege due to the inadvertent production of privileged documents. Here, you can view the notes associated with Rule 502.
The fact is that cases were no longer being decided on their merits. A company was forced to look at the cost of identifying relevant information, collecting that information, processing the information into a format sufficient for review, reviewing that information, conducting a privilege review, and then producing those documents to the opposing party. This cost often exceeded the value of the case itself or was such that the case was not worth bringing or defending. In short, cases were being decided based on the cost of discovery rather than the merits themselves.
FRE 502 was enacted to alleviate these costs. Congress figured that if it could reduce the often harsh federal common law in regards to the waiver of privilege it would allow for the decision of more cases on their merits.
At its most basic, the rule provides that the production of a document does not waive any associated attorney-client or work product privilege if the production was inadvertent, reasonable precautions to protect privilege were made, and the party took reasonable steps to rectify the error.
The importance of this new rule to small and mid-sized businesses cannot be understated. Some studies have shown that the average work computer holds 32 gigabytes worth of information. It could easily cost in excess of $10,000 per gigabyte to process, review and produce electronically stored information. Do the math and look at the number of employees in your business. Obviously, any rule that reduces these costs is beneficial.
But how are courts across the country actually employing the rule? Has it done anything to change the standard operating procedures when it comes to electronic discovery in such a way that it makes a discernable impact on how parties chooses to analyze their case?
I’m interested in your opinion and as the week goes on I’m going to look at many of the cases that have applied Rule 502 since its enactment last year to see just how courts are applying the rule.
