This article is the fifth installment in a series on e-discovery issues and areas that offer inside counsel the greatest opportunities to reduce risks and save costs. Read parts one, two, three, and four.
Regrettably, too few parties take advantage of these protections, and for an organization that is party to a federal litigation involving a substantial amount of electronically stored information (ESI), there is simply no reason not to enter into such a clawback agreement. In certain litigations, as suggested by Judge Schindlein, this may allow a party to forego the entire expense of a privilege review by simply producing all relevant documents subject to the clawback. However, understanding that bells cannot be unrung, parties can nonetheless save tremendous cost through word searches of counsel names and terms like “attorney-client privilege,” or they might opt to still undertake a full privilege review, but now with the peace of mind that the clawback will operate as a mighty strong insurance policy.
Critically, however, when entering into a clawback agreement and proposed protective order, the parties should be sure to spell out the applicable privileges or protections that will not be waived and that efforts to protect against or correct waivers will not be considered in any waiver determination. If a clawback agreement memorialized into a protective order fails to be explicit on these points, a court might take a formalistic approach and look to these efforts in determining whether to permit a clawback. At least one court has already done so.