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Ask U.S. businesses about the country’s legal system, and the primary complaint almost always involves cost. Not far behind is the lament that the high cost of litigation forces companies to offer generous settlement payments, even when the merits of the case suggest that the case should be taken to trial or settled for a much smaller amount. Although lawsuits are likely to remain expensive, the federal judiciary has approved new rules that represent an important assault on runaway costs.

Most of the cost involved in a typical business lawsuit is incurred in pretrial discovery. Although discovery has long been expensive, costs exploded with the introduction—and now near-ubiquity—of electronic data, including emails and databases. In larger cases, the cost of document discovery can easily reach into the millions of dollars per lawsuit. Perhaps more important, because the court rules place little restraint on the tendency of lawyers to search through as much data as possible in the hope of finding something useful, the process is not only expensive but inefficient. One survey of large lawsuits found that for every 1,000 pages of documentation produced in discovery, only one page became an exhibit at trial.

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