discoveryoccurred,butestimatesinotherreportsconfirmthehighcostofdiscoveryincasesinwhiche‐
discoveryispursued.
4
Reformisclearlyneeded.Adiscoverysystemthatrequirestheproductionofafield fullof“ haystacks”
ofinformationmerelyonthehopethattheproverbial“needle”mightexistandwithoutany
requirementforanyshowingthatitactuallydoesexist,createsasuffocatingburdenontheproducing
party.Despitethis,courtsalmostneverallocatecoststoequalizetheburdenofdiscovery.
Companiesarespendingbillionsofdollarsyearlyonlitigation.Litigationtransactioncosts,
independentofjudgmentsawardedindisputesorsettlementsreachedbetweenparti es,con stitutea
significanteconomiccostofdoingbusinessintheUnitedStates.
5
Amongthe36surveyparticipantswho
respondedtothisquestion ,thetotalaggregatespendonlitigationin2008was$4.1billion.
Thereisnodoubtthat asignificantdriverofthehigherU.S.costsistheproceduralanddiscoverycosts
associatedwithourjusticesystem.Variousstudiesfindthatroughly60percentofU.S.tortcostsare
consumedintransactioncosts,withonly40percentbenefiting theactualclaimant.
6
Thesestudies
4
SeeInstitutefortheAdvancementoftheAmericanLegalSystem,ElectronicDiscovery:AViewfromtheFront
Lines3‐4,25(2008)(e‐discoverycostsareabout$3.5millionforatypicalmid‐sizelawsuit).SeealsoOracleCorp.v.
SAPAG,2008U.S.Dist.Lexis88319,at*4‐5(N.D.Cal.2008)(courtrefusestoorderdiscoveryof165document
custodiansatcostof$16.5million,apartfromotherdiscoverycostsfromsearchesofcentralizedrepositoriesand
targetedsearches,nottomentionlayandexpertdepositionsandinterrogatories);InreFannieMaeSecurities
Litigation,552F.3d814,817
(D.C.Cir.2009)(“Thetotalamount[nonpartyagency]spentontheindividual
defendants’discoveryrequestseventuallyreachedover$6million,morethan9percentoftheagency’sentire
annualbudget”.);Medtronicv.Michelson,229F.R.D.550,557‐8(W.D.Tenn.2003)(costsofprivilegereview$16.5
millionto$70million);MurphyOilUSAv.FluorDaniel,Inc.,2002WL246439,*2(E.D.La.2002)(indecidinga
motiontocompelandcostshift,courtconsideredcoststoproduceESIwhichincludedover$6.2millionforvendor
restorationofbackupemailtapes).
5
TheU.S.tortsystemcost$260billionin2004,or$886perperson.TillinghastTowers‐Perrin,U.S.TortCostsand
Cross‐BorderPerspectives:2005Update3(2006),availableat
http://www.towersperrin.com/tp/getwebcachedoc?webc=TILL/USA/2006/200603/2005_Tort.pdf.U.S.tortcosts
exceedthoseofotherindustrializednationsbyasubstantialmarginwhenmeasuredbyaratiotoeconomicoutput
(measuredbyGDP).Id.at4.TheU.S.hada2.2%ratiooftortcoststoGDP,comparedwithGermany(1.1%),Japan
(0.8%)andtheU.K.(0.7%).Id.AsidefromItaly(1.7%),theothercountriesexaminedhavetortcosts(relativeto
economicoutput)comparabletolevelsobservedintheU.S.inthe1950sand1960s.Id.6tbl.3(U.S.tortcostsasa
ratiotoGDPwere0.62%in1950,1.03%in1960s,and1.34%in1970).
6
SeeA.MitchellPolinsky&StevenShavell,TheUneasyCaseforProductLiability,123Harv.L.Rev.1437,1470
(2010),citingTillinghast‐TowersPerrin,U.S.TortCosts:2003Update17(2003),availableat
http://www.towersperrin.com/tillinghast/publications/reports/2003_Tort_Costs_Update/Tort_Costs_Trends_200
3_Update.pdf(tortclaimantsreceive46centsofeverydollarpaidbydefendants);JamesS.Kakalik&NicholasM.
Pace,CostsandCompensationPaidinTortLitigationixtbl.S.3(1986)(tortclaimantsgenerallyreceive46centsto
47centsperdollaroftortsystemexpenditures);JamesS.Kakaliketal.,CostsofAsbestosLitigationviitbl.S.2
(1983)(findingthatasbestosclaimantsobtain37centsofeverydollarpaidbydefendants);StephenJ.Carrolletal.,
AsbestosLitigation104(2005)(asbestosclaimantsobtain42centsofeverydollarpaidbydefendants);PatriciaM.
Danzon,LiabilityforMedicalMalpractice,in1HandbookofHealthEconomics1339,1369(A.J.Culyer&J.P.
Newhouseeds.,2000)(medicalmalpracticeclaimantsreceive40centsforeverydollarofdefendants’liability
insurancepayments);PeterHuber,Liability:TheLegalRevolutionandItsConsequence151(1988)(medical
malpracticeclaimantsandproductliabilityclaimantsreceive40centsforeverydollarpaidbydefendantsfor
liabilityinsurance);JoniHersch&W.KipViscusi,TortLiabilityLitigationCostsforCommercialClaims,9Am.L.&
4