This week I am reaching out to in-house General Counsel with this simple question – are you spending too much on Legal Settlement costs?
Whether a legal matter goes to trial or settles before trial, the negotiations surrounding the scope of discovery still take place. The Catelas assertion is that the scope of discovery is invariably too broad, because we are not certain about ‘who is involved’ and ‘what actually happened’. So we over-collect. Now, even if the case does not go to trial, the Anticipated Cost of Discovery (ACD) is higher than it should be, creating an artificially high ceiling for a settlement negotiation.
Catelas is holding a webinar series over the next few weeks, starting Tues 8th November at 12pm for 40 minutes to discuss this topic in more detail. Join us by registering here.
We are fast approaching the turning of the fall leaves which means that turkeys are being fattened for Thanksgiving. This is kind of a continuation of my smiley faces rant in that the scope of discovery in a case is invariably “fattened up” before the unsuspecting turkey is placed in the oven.
Here’s the scoop: we know that most litigation cases settle before trial. But, in many cases we over-collect and so we use keywords to negotiate down the Anticipated Cost of Discovery (ACD).
See the problem: over-collection because we have no way of substantiating a narrower scope of discovery. Let’s say a case might initially settle for around $250k, but then we calculate the ACD to be $3M. Guess what, opposing counsel now has a significantly higher “settlement ceiling” to work with. Counsel for both parties then confer and a settlement of say $2.5M is agreed.
In building up the scope and anticipated cost of discovery, opposing council has fattened up the turkey. In some ways Early Case Assessment has become our own worst enemy – we run a number of keyword searches and calculations to get a pretty accurate cost of anticipated discovery.
This is not the defense attorney’s fault, it is simply a consequence of the way we preserve and collect. So again, at Catelas we believe we have the answer: provide a comprehensive and defensible way to limit the scope of discovery. We are able to help counsel to preserve & collect only those custodians that are truly close to the matter. Not by keyword culling, but by actually identifying the relevant custodians.
Bottom line is … don’t get caught in the Early Case Assessment trap by settling for too much!