Discovery as a Compliance Problem

Discovery in a commercial case can become a quagmire. Lawyers have an ethical obligation to advance their clients’ interests, and for litigators, the prevailing conceptual model is zealous advocacy. A lawyer’s personal incentives align with that conceptual model, because lawyers benefit by going the extra mile to please a client, to justify a fee, and to earn more business. In civil litigation, advancing a client’s interests often translates into taking aggressive positions in discovery. Information is power, so not producing documents deprives an adversary of power. Time is another precious resource, so backloading the discovery schedule when producing documents or witnesses deprives the adversary of time. Discovery doctrines require fact-specific application, which creates ample wiggle room for motivated reasoning. The level of enforcement for discovery violations is low, because the vast majority of civil discovery takes place outside of the Court’s view, and because judges notoriously dislike discovery disputes. The combination of significant incentives for misconduct, ample opportunities for misconduct, and low levels of enforcement causes the civil discovery process in commercial cases to regularly spin out of control.<br><br>Corporate compliance professionals confront similar problems. Corporate managers have a fiduciary duty to maximize the value of the corporation for the benefit of its stockholders. A corporate manager’s personal incentives align with that fiduciary mandate, both because of compensation arrangements tied to financial targets and because enhancing profitability can result in promotion. Pushing legal boundaries can help a manager meet or beat financial targets. The legal boundaries are often unclear, creating room for motivated reasoning. The level of enforcement for legal violations is low, because business operates outside of the view of law enforcement, and many law enforcement agencies are notoriously underfunded.<br><br>Compliance professionals have responded to these problems by developing systems designed to reduce violations. Those systems are not perfect, but they provide lessons for civil discovery in commercial cases. Two concepts are especially pertinent: culture and salience. These concepts point to potentially valuable approaches to civil discovery in commercial cases. The Delaware Court of Chancery has begun to explore some of these potential solutions.<br><br>Adopting a compliance-based approach requires commitments both the bench and bar.&nbsp; To promote a culture of compliance, judges and senior lawyers must make an effort to establish a “tone at the top.” For trial judges, a compliance-based framework calls for hearing discovery disputes, not complaining about them, and, applying, brighter-line rules with clearer consequences that reduce the wiggle room for motivated reasoning. For appellate courts, enhancing compliance means backing up trial courts when they impose sanctions, rather than empathizing with the attorney as victim. For all members of the bar, a compliance-based framework requires internalizing different norms and accepting the risk of more frequent, albeit lower-stakes sanctions.