This is the fifth column in a series addressing the challenges and opportunities presented by litigating in forums with no e-discovery rules. Read parts one, two, three and four. This column discusses some of the considerations that may prompt your company’s trial counsel to propose a special master for e-discovery disputes.

A judge lacking e-discovery experience, particularly in a forum with no local e-discovery rules or precedents, can be a difficult wildcard for both plaintiff and defendant. When the parties lack any reliable benchmarks to predict how the court will resolve e-discovery disputes, this uncertainty invites litigiousness, delays resolution and increases expense to both sides. One way to address this issue is by a stipulation at the outset of the case appointing an expert in e-discovery as a special master.

The use of e-discovery special masters except for in the largest and most complex cases remains infrequent, principally because of concerns over cost. In this author’s view, the retention of a special master may be cost-effective in any case in which a dispute over the scope or methods of e-discovery could either have at least a six-figure impact on a party’s discovery budget or have a material impact on a party’s ability to obtain key evidence in any case with at least seven figures in controversy.

The risk that a misguided ruling on a discovery motion may impose undue burden, expense and business disruption on your company is an ever-present concern for most general counsel, and yet too many litigants make the “penny wise, pound foolish” decision to forego the relatively modest investment in a special master. After all, it is the parties who control the volume of work submitted to the special master.

If a discovery dispute is worth paying your counsel to brief and argue, then it is worth the relatively modest additional investment to ensure the dispute is heard by someone with the relevant experience to sift through the arguments presented by counsel and reach an appropriate resolution.

Similarly, if the resolution of an e-discovery dispute could make the difference in your company’s ability to obtain “smoking gun” evidence in discovery, then the special master’s fees should be viewed in the context of the resources your company will invest in discovery in the effort to obtain that evidence.

To be clear, the parties’ lack of confidence in the assigned judge’s e-discovery experience is not the only reason to propose an e-discovery special master; the use of a special master is no badge of dishonor for the bench. In especially complex cases, efficient resolution of e-discovery disputes may require a level of engagement by the special master and access to counsel that simply is not possible for a judge, whether because of the court’s work load or simply because of the formality typically required for communications between counsel and the bench.

A skilled special master may help the parties resolve discovery disputes through an iterative process that is best achieved in a series of conferences and informal exchanges, instead of relying solely on the briefing and argument of motions to compel and for protective orders. These objectives for retaining a special master, however, rarely seem sufficiently persuasive for litigants except in the largest and most complex matters.

Another reason that parties often fail to take advantage of special masters is the perception by one party that appointing a special master will be a tactical disadvantage. To avoid this issue, the question of appointing a special master should be raised at the earliest possible point in the litigation, before the e-discovery battle lines have crystalized. Once both sides have formulated their e-discovery strategy, it is probably too late for the parties to reach agreement on appointing a special master because gamesmanship—or the perception of gamesmanship—will impede any consensus.

Special masters have to be paid, and unless the parties reach agreement on payment of the special master’s fees, many courts will be reluctant to impose this burden over the objection of one party. Although the easiest agreement to reach regarding payment of the special master’s fees may be an equal 50/50 split, the benefit of alternative arrangements should be considered. For example, a stipulation that requires the non-prevailing party on a discovery dispute to pay the special master’s fees relating to that discovery issue may provide a useful incentive to both sides to consensually resolve their discovery disputes.

The parties’ stipulated order appointing the special master should specify clearly the scope of the special master’s mandate and the extent of judicial review. In many courts, the parties may waive prospectively any review for error of the special master’s determinations by agreement, and this approach may be necessary if the parties are actually to reap the benefits that motivated retention of the special master in the first place. Otherwise, appointment of a special master may simply add an additional layer of expense and delay to the proceedings.

Negotiating this stipulation may invite a broader discussion about the ground rules, and the parties may be able to reach agreement on other issues to simplify e-discovery, such as stipulating that the special master and the parties follow the e-discovery standing order of a particular federal district court. This author would caution, however, that such negotiations risk disagreements that may polarize the parties and derail the agreed appointment of a special master.

Instead, a better approach is initially to table these discussions and then include in the order appointing the special master a provision for counsel to meet and confer in the manner of a Rule 26(f) conference and to submit an e-discovery plan and report, before their first conference with the special master, but after the special master has been appointed and it is too late for either side to express buyer’s remorse.

In courts that do not divide the functions of presiding trial judge and pretrial case management, a potentially significant drawback to appointing an e-discovery special master is the isolation of the trial judge from the discovery process, loss of opportunities to educate the court through the presentation of discovery disputes, and loss of opportunities for the court to provide the feedback that typically occurs when discovery motions are heard by the court.

One way to address this issue is to very clearly circumscribe the issues heard by the special master to include only the core e-discovery issues, including methods of preservation, search and collection; specifications for production; delineation of what is reasonably accessible and the media to be searched and questions of cost-shifting for electronic discovery. By contrast, the assigned judge could and typically should retain control of the key gatekeeping functions that determine the substantive scope of discovery, such as relevance and privilege.

Dividing responsibility for management of discovery in this manner may be an effective approach to ensure that the assigned judge remains actively engaged in the progress of the litigation while also allowing both the parties and the court to utilize fully the special master’s e-discovery expertise.