Inefficient Electronic Discovery Management Can Cost Clients

On December 14, 2005, the Delaware Chancery Court reduced recovery of plaintiffs’ attorneys’ fees in a securities case by nearly $1.2 million, in large part for inefficiently managing electronic discovery. Specifically, the Court pointed out the "obvious inefficiencies" in plaintiffs’ decision to print digitally produced documents onto paper and copy that paper for distribution and review.

In the shareholder class action In re Instinet Group, Inc. Shareholders Litigation, Consolidated C.A. No. 1289-N, 2005 Del. Ch. LEXIS 195 (Dec. 14, 2005), plaintiffs’ counsel applied for over $1.6 million of fees and costs after the court approved a stipulated settlement. Plaintiffs claimed nearly $125,000 of costs for photocopying and related services (most of which was spent converting several hundred-thousand pages of documents from electronic to paper format), and they also claimed attorneys’ fees for "a very large amount of time" to review the converted documents.