In an age of exploding electronic discovery that has multiplied the cost and scope of document review, litigants in New York’s Commercial Division will soon have the benefit of revised privilege log practice.

Starting September 2, new Rule 11-b, signed Tuesday by Chief Administrative Judge Gail Prudenti, will instruct parties to meet at the outset of the case and afterward to discuss the scope and parameters of privilege review. It also will strongly encourage using categorized designations for documents as opposed to itemized listings to help streamline the process.

Parties who resist the categorized approach may be subject to attorney fees upon a showing of good cause by the other side or a protective order from the judge.

Modeled after guidelines set forth in such jurisdictions as the Southern District of New York and Delaware Court of Chancery, the rule offers “a meaningful way for courts and parties to assess the assertion of privilege,” said David H. Tennant, a partner at Nixon Peabody, who co-drafted the language with Jonathan Lupkin, of Rakower Lupkin. They are members of an advisory group charged with proposing changes to Commercial Division practice to offer a more efficient and cost-effective forum for litigants and their business clients.

“We believe this rule is the most complete and fully articulated version of a privilege log rule embracing categorical designations,” Tennant said, adding that such logs – records parties say are privileged and thus immune from discovery requests – are the “bane of existence for not just lawyers but more importantly, clients who have to spend a lot on legal fees.”

With the proliferation of e-discovery, Lupkin said, “a rule like this is necessary to at least stem the expenses that parties incur by forcing parties to analyze the relative benefits like an item-by-item log.”

The new rule encourages parties to share the costs of hiring a special master to help sort out issues over privilege logs. It also requires them to designate an attorney who can supervise the responsibilities of the privilege review process to create a direct pipeline of information for the court.

“The partner [handling the dispute] may or may not have any familiarity with the nitty gritty [of privilege review],” Lupkin said. “It’s a source of tremendous frustration for the court and ultimately creates a situation of not particularly useful court appearances.”

The Office of Court Administration released the proposed rule for public comment in April. The New York County Lawyers’ Association and New York State Bar Association Commercial & Federal Litigation Section voiced their support.

Jeffrey Simes, a partner at Goodwin Procter who handles complex business litigation, said the rule reflects a fair and balanced approach in addressing the challenges of expensive document review.

“It’s definitely helpful,” he said. “I think this new rule will be welcome because I think it’s easier in courts where there is a more pragmatic approach.”

Lauren Aguiar, a litigation partner at Skadden, Arps, Slate, Meagher & Flom, said if the parties cooperate, the rule will save much money and time. “The categorical log could be the first step in a process of vetting whether the parties’ assertion should hold,” she said.

At the same time, she added, the categorized approach to privilege designations could translate to fewer details about specific documents, making it “more difficult for the challenging party.”

“While I’m hopeful that this is something that will result in greater efficiency and lower costs, I’m not totally convinced in practice that it will provide the detail that is often necessary to have assertions of privilege,” she said. “A lot of times, those details do matter.”