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Experts: 3 Ways to Cut Construction Litigation Costs

by Petra Pasternak

If the construction industry wants to rein in litigation spend (and it does), a focus on ediscovery is probably the best place to start. Ediscovery expenses can account for up to 70% of overall litigation costs, thanks to the sheer amount of data and specialized formats.

Dollars tied to construction disputes are skyrocketing, according to the latest report from Arcadis. Last year, the average value of construction litigation in North America rose 42% to $42.8 million, a historic high.  

Ediscovery was the subject of Everlaw's first Construction Industry Innovation Forum, where Allensworth partner Tyler T. O’Halloran and Everlaw Strategic Discovery Advisor Chuck Kellner discussed tools and techniques to help optimize the cost and accuracy of the discovery process.

Tyler and Chuck and a lively group of industry participants discussed tips for strategic data gathering, finding key evidence in vast volumes of construction data, and managing data efficiently through the life cycle of a case. 

1. Streamlining Data Gathering by Managing the Number of Custodians

In construction disputes, like many others, the discovery process is where cases can be won or lost. And that process is often extremely data intensive. Construction companies store terabytes of project emails, Zoom and MS Teams A/V recordings and chats, documents such as CAD drawings and blueprints, and contracts - among other varied data types. 

Identifying and gathering it all can be complex and time consuming. Without proper tools, important evidence can be overlooked. This is especially true with mobile devices, which can be hard to access from business people who are often on the move. Remote collection of electronically stored information, or ESI, is an important capability that may require outside consultants. 

“In the construction industry, mobile phones are still the Wild West in data collection,” Tyler said. They’re a key source of potential evidence – where people often say what they really mean, not realizing that an off-the-cuff text will someday be discoverable. “Mobile phone data is a treasure trove; it’s what email was in 1999.” 

Cost Saving Strategies: 

  • Make sure you’re not over collecting data, which may increase costs along the way. Over collecting occurs from gathering the same information from multiple sources.

  • Know the risks associated with version control, and whether your system is set to purge prior versions automatically. 

  • Limit the number of custodians at the front end of a case. Construction project custodians can number in the thousands. Including too many can result in over collection of millions of documents.

“Your job is to get a critical-mass sample size of people who reflect the most important communications and documents possible,” Tyler said. “If you have 50 custodians with responsive information, you should start with five.” You can always add more later.

Andrew Rope, Scaled Operations Manager at Google, Randall Lehner, Deputy GC at Guaranteed Rate, Allensworth partner Tyler O'Halloran at Everlaw Summit.
Allensworth partner Tyler O'Halloran (right) discusses novel data type strategies at Everlaw Summit alongside Andrew Rope, Scaled Operations Manager at Google (left), and Randall Lehner, Deputy GC at Guaranteed Rate (center).

2. Focusing the Data Set to Just What Is Needed for the Case

Legal professionals in the construction industry need easier ways to export data and narrow it down as a case unfolds. Tyler said there are a number of must-haves during the early case assessment, or ECA, step of discovery. 

Data volumes can easily run to terabytes. When you have too much data in various systems that aren’t litigation friendly, some best practices include having access to tools with the ability to: 

  • Smartly deduplicate the data set 

  • Run complex searches in ECA 

  • Safeguard metadata, annotations, and work product

Tyler said that some common enterprise tools with ediscovery functionality added on have significant limitations and shouldn’t be used for anything more than simple searches. This may include custodians and dates. Don’t apply even simple keywords unless they are very specific to the project and uniformly used by the client. “Beyond that, I like to run complex searches within an ECA system.” 

Cost Saving Strategies: 

  • Try to encourage all parties to agree to a shared system – a centralized hub of information – where all project records exist so that there’s one production of the project file that everyone agrees is authentic. “This saves a ton of people a ton of money.”

  • Use data visualization tools for early insight into important people, time periods, and crucial gaps in communications.

“You don’t want to go through six months of discovery before you learn that the communications dropped off and moved to an alternative platform or device,” O’Halloran said.

3. Managing Data Costs Effectively  

Tyler provided tips for using ECA tools effectively in construction litigation. To understand the scope of a case early on, ECA is your friend.

As you collect data on an ediscovery platform and pay hosting fees, your costs may rise. At peak data volume, you have client files, expert and project files – including duplicates and opposing productions – all of which you need for case assessment and governance. 

But after expert productions are done, the litigation team should be tasked with checking what versions can be kept, combined, deduplicated, suspended, archived, or taken offline. As you refine your case for trial with productions and deposition preparation, keep only the copies you want for trial to reduce data volume and costs.

“You shouldn’t pay full freight for all the data you discovered all the way through trial,” Tyler said. “There are passive data costs you can avoid as the case evolves.” 

Cost Saving Strategies:

  • Run a monthly data audit to see what can go offline to save money during the course of litigation.

  • By trial, have only the best documents in the platform for use with a judge, jury, or arbitrator. You can always get other data back quickly from the suspended state.

Building a Better Litigation Strategy

Keeping ediscovery costs down in document-heavy construction litigation is no easy task. But certain strategies can speed up the process, reduce the complexity, and save money – especially when tackled early on. Those include early management of custodians to limit your data collection, focusing heavily on an ECA workflow, and running monthly data audits to make sure you’re paying just for the hosting you need as you approach trial prep. That’s especially important for litigation that drags on for years.

For more tips on handling today's litigation data, download our free white paper, "Finding Key Evidence in Big Data."