June 19, 2019

Empirical Findings Inform Different Approaches to Discovery Reform

One of the principal goals of the Colorado Civil Access Pilot Project (CAPP) is to streamline the discovery process and thereby reduce the cost of litigation. Ultimately, CAPP’s success in reducing total litigation costs depends on how big of a problem the discovery process actually is. Suffice it to say, there is not agreement on this point, as best illustrated by the differing empirical findings of the Federal Judicial Center and the Institute for the Advancement of the American Legal System.

The Federal Judicial Center (FJC) is the education and research agency for the federal courts. The FJC surveyed more than 2,000 attorneys of record in federal civil cases terminated in the last quarter of 2008. 1 The FJC found median litigation costs, including attorney fees, of $15,000 for plaintiffs and $20,000 for defendants. It also found a strong correlation between the stakes of a case and total litigation costs. Specifically, all else being equal, if the stakes in a case double, litigation costs increase by 25 percent. Finally, the FJC found that the median percentage of total litigation costs accounted for by discovery was 20 percent for plaintiffs’ attorneys and 27 percent for defendants’ attorneys. The FJC researchers suggest that “before any further amendments to the discovery rules are proposed in the name of reducing costs, more effort must be made to define the problem that such rule amendments are supposed to address.” 2

The Institute for the Advancement of the American Legal System (IAALS), headquartered at the University of Denver, helped develop CAPP and is currently tracking its progress. IAALS surveyed the impressions of thousands of American College of Trial Lawyers Fellows nationwide. IAALS found that survey respondents overwhelmingly believed that the costs of litigation were not proportionate to the value of a case. Those surveyed also indicated that cases involving less than $100,000 are not cost effective to litigate. 3 Finally, the IAALS study found that the median estimate of the percentage of litigation costs attributable to discovery in cases not going to trial was 70 percent. 4

The differences in findings are stark. The FJC found that litigation costs are generally proportionate to the stakes in litigation; IAALS found the opposite. But perhaps the largest contrast is the share of litigation costs attributable to discovery. If the FJC is correct that the discovery process only accounts for 20 to 27 percent of total litigations costs, we would need to temper our expectations for CAPP’s goal of reducing total litigation costs. If, however, discovery accounts for 70 percent of total litigation costs, then we might remain optimistic that CAPP will significantly decrease costs and thereby improve access to the civil justice system.

In my humble opinion, if there is a problem to be solved by CAPP, it’s that cases with relatively little at stake can cost so much that they are not cost-effective to litigate. While I find the FJC’s empirical results more persuasive than its IAALS counterparts, the FJC findings do indicate that litigation costs are more of a problem for cases with less at stake. 5 I believe that CAPP, if respected by attorneys and strictly enforced by judges, can reduce the overall costs for cases with less at stake (i.e., approximately $100,000 or less). 6 This may not be the far-reaching result that the CAPP creators envisioned, but it would certainly constitute progress.

Notes:

  1. For an in-depth summary of the differing empirical findings in this area, see Emery G. Lee & Thomas E. Willging, Defining the Problem of Cost in Federal Civil Litigation, 60 Duke L.J. 765 (2010). Unless otherwise indicated, all statistics in this blog are taken from this article.
  2. Id. at 768.
  3. A History and Overview of the Colorado Civil Access Pilot Project, available here.
  4. To clarify, the IAALS survey inquired only about cases not going to trial, while the FJC study included all cases. Lee and Willging do not discuss this difference in their article, but given the very low percentage of cases that go to trial (according to the article cited in footnote 3, the district court civil trial rate in Colorado is 1 percent), I would not expect it to significantly affect the statistical outcome or the ability to accurately compare the FJC and IAALS numbers.
  5. See Lee & Willging, supra note 1, at 788 figs. 1 & 2.
  6. I will concede that CAPP’s effectiveness in this regard may be somewhat muted by the existing availability of CRCP 16.1. However, everything I have read indicates that Rule 16.1 is sparingly used. As CAPP is mandatory, it will most likely have a stronger impact on reducing costs.

Michael Ley is an associate at Brosseau Bartlett Seserman, LLC and concentrates his practice on insurance, commercial, and civil litigation.. He contributes to the CBA’s SOLO in COLO blogwhere this post originally appeared on November 8, 2012.

The opinions and views expressed by Featured Bloggers on CBA-CLE Legal Connection do not necessarily represent the opinions and views of the Colorado Bar Association, the Denver Bar Association, or CBA-CLE, and should not be construed as such.

Civil Access Pilot Project: Making Colorado Courts More Efficient?

Earlier this year, we, as attorneys, were blessed by the Colorado Supreme Court’s decision to completely overhaul the procedure for practicing law in Colorado.  Dubbed the Colorado Civil Access Pilot Project, or CAPP for short, its new procedures apply in (1) “Business Actions” (2) filed between Jan. 1, 2012, and Dec. 31, 2013 (3) in Adams, Arapahoe, Denver, Gilpin, or Jefferson counties.

For what constitutes a “Business Action”, see page 8 of Chief Justice Directive 11-02, available here.  Notable exclusions from CAPP include: actions solely for the payment of rent on real property, CRCP 120 proceedings, actions brought by financial institutions solely for the collection of debt, employment actions other than disputes concerning the breach of a non-compete or theft of trade secrets, construction defect claims, negligence actions for physical injuries, and actions involving a statute or rule that contains distinct timeframes for the proceedings.

I have had the opportunity to represent parties in two CAPP cases this year — one as a plaintiff and one as a defendant. Our CAPP plaintiff case was filed in late March.  I don’t have much to report from this case because it settled shortly thereafter, but I did take notice of how quickly we were required to make our initial disclosures.  Under CAPP, the plaintiff is required to file initial disclosures no later than 21 days after service of the complaint.  This felt like a very quick turnaround.  We definitely had to do a little more work on the front end to meet the deadline.  These initial disclosures consist of:

 [A] statement listing all persons with information related to the claims and a brief description of the information each such individual is believed to possess, whether the information is supportive or harmful.  The statement shall also include a certification that the party has available for inspection and copying all reasonably available documents and things related to the claims, along with a description by category and subject area of the documents and things being disclosed, whether they are supportive or harmful.

Again (it was not a typo two sentences ago), these disclosures must be filed with the court and served on the opposing party or parties.

A few things to note here: First, regarding the scope of the initial disclosure statement, the CAPP authors have emphasized that “all documents” means all documents, whether supportive or harmful.  Based on the wording of C.R.C.P. 26(a)(1), I think lawyers were already under an obligation to produce everything, but the CAPP authors seem to think that many attorneys don’t give over the juicy stuff unless asked.  Second, the scope of discovery changed from “relevant to” to “related to.”  Based on my reading, it appears that “related to” is a broader standard.  Third, this initial disclosure statement is somewhat narrow in that no counterclaims have yet been brought.  So the scope of discovery at that point is only documents “related to” the claims in the complaint.  However, if counterclaims are brought, the plaintiff has to file an additional disclosure statement (discussed more below).  Finally, I took note of how different it is to give documents to a defendant who has not yet filed an answer.

The CAPP case where our firm represents the defendant has been much juicier.  That case was filed in early March and remains ongoing.  I’ve observed a couple CAPP pitfalls in this case.  First, file your initial disclosure statement.  The CAPP deadlines are structured such that one deadline begins only after the previous deadline has been met.  Under the CAPP rules, the answer is not due until 21 days after the plaintiff files the disclosure statement.  Technically, if you don’t file your disclosure statement, the defendant doesn’t have to answer.  Second, the CAPP courts are issuing delay reduction orders shortly after the filing of the complaint.  One of the provisions of the DROs is for the plaintiff to set a case management conference within seven days after the last answer is filed.  Note, this deadline is not in the CAPP rules, so watch out for it.

At this point in the case, if I were to identify the biggest difference between CAPP and the Colorado Rules of Civil Procedure it would be that, if counterclaims are filed, the CAPP pleading/initial disclosure stage can take a long time.  As I said, this case was filed in early March, and the final disclosure statement is not due until mid-to-late June.  Time will tell whether the CAPP rules can justify this lengthy pre-discovery period by significantly reducing the length and burden of discovery.  If not, I don’t think the CAPP rules will make litigating any more efficient than under the CRCP.

Michael Ley is an associate at Brosseau Bartlett Seserman, LLC and concentrates his practice on insurance, commercial, and civil litigation.. He contributes to the CBA’s SOLO in COLO blog, where this post originally appeared on July 23, 2012.