• New Federal Rule of Evidence Could Reduce Litigation Costs
  • October 29, 2008 | Author: Matthew E. Hedberg
  • Law Firm: Ater Wynne LLP - Portland Office
  • Parties engaged in litigation in federal courts could see cost savings thanks to a new rule affecting pre-trial discovery. On September 19, President Bush signed into law S. 2450, which adopts new Federal Rule of Evidence 502 concerning discovery of information protected by the attorney-client privilege and work-product doctrine.

    Given the cost of reviewing large volumes of electronic documents, the risk of waiver of the attorney-client privilege or work-product doctrine following inadvertent disclosure has become a hot litigation issue.  New Rule 502 states that disclosure of privileged materials will not be a waiver of the privilege if (1) disclosure is inadvertent, (2) the holder of the privilege took reasonable steps to prevent disclosure, and (3) the holder took reasonable steps to rectify the error.  The rule also states that parties in litigation may enter into an agreement on the effect of disclosure of privileged materials.

    The rule addresses the problem of "subject-matter waiver" by providing that, when a party produces one privileged document, any resulting waiver of the privilege will not extend to other documents, as long as there was no intentional or misleading use of protected information.  The rule will also make federal court orders protecting against waiver enforceable in both federal and state courts, and will make confidentiality agreements between parties that are incorporated into court orders enforceable against nonparties.

    Rule 502 should limit the cost of litigation by simplifying privilege review and preventing discovery disputes over privilege issues.