Cary Ichter’s article, The Special Master: An Underutilized Dispute Resolution Option, was just published by the Winter, 2011 edition of DR Currents. DR Currents is a publication of the Dispute Resolution Section of the State Bar of Georgia.
The Special Master: An Underutilized Dispute Resolution Option
By Cary Ichter
The modern commercial dispute is characterized by one overwhelming feature above all others: cost. As litigation — from discovery, to trials, to appeals — dissolves into a battle of time-consuming briefs and motions, legal fees correspondingly escalate. The deleterious effects of these outlays are compounded by the strained judiciary, which struggles to manage a frenetic caseload with scant resources. This risk is as worrisome as it is apparent: aggrieved plaintiffs, unable to afford a jury trial, will be compelled to settle in order to avoid the economic hardships wrought by tiresome pre-trial spats. There is, however, an emerging solution, which, by tempering costs and promoting efficiency, can benefit both litigants and the judiciary: the use of special masters.
The challenge ballooning costs pose to litigants is no secret; discovery provides an apt example. In the era of electronically-stored information, lawyers routinely request millions of pages of information for a single case, effectively bringing the dispute to a halt as parties and their attorneys attempt to manage an insuperable mountain of information. Plaintiffs routinely put forward a “$150,000 case and someone makes a discovery request (that costs) $300,000.”1 In such cases, costs become more than a factor in managing the dispute: they become dispositive, changing each side’s tactics and incentives by distorting the cost-benefit analysis between trying and settling a case, or between paying and appealing a judgment.
Costs also have the effect of distorting returns. In the protracted asbestos litigation, for example, barely a third of the money recovered went to the victims; the rest was lost to legal fees and other transaction costs.2 This is compounded by the protracted duration of contemporary civil litigation, where litigants are forced to absorb skyrocketing expenses as their cases drag on for years in a state of perpetual limbo.3
The dangers created by the costs and delays attendant to the civil litigation process are real and widespread. The president of the American College of Trial Lawyers recently expressed concern that people will be forced to “look[ ] for alternative means for resolving their disputes or [to] walk away completely.”4 This outcome, however, is entirely unacceptable. Parties petition courts because they need an impartial arbiter for their claim. When the costs and time involved become so onerous as to make a court-solution anything but, litigants are forced to abandon their hope of a judicial remedy and seek settlement where they can.
Among the scanty solutions proffered to address exploding costs and expanding delays are programs at the trial-court level to curb the amount of discovery allowed in each case.5 Such programs threaten to create as many problems as they alleviate, however. While they recognize the difficulty of modern trial practice, they respond by circumscribing tools designed to ensure relief for plaintiffs.
It should also be noted that the costs of trial are not limited to discovery — indeed, ballooning discovery costs seem to be but a symptom of a larger problem. Pre- trial litigation has become a motions arms race with each side moving and opposing at virtually every conceivable opportunity. Legal costs can easily eclipse the amount in dispute well in advance of opening statements, and even the most conservative litigant may be forced to expend copious resources simply responding to pre-trial actions by their opponent. Given the fundamental role that the adversarial process plays in the American legal system, however, solutions to this action-reaction dynamic are either truly meager or wholly radical.
There may, however, be a solution simpler than cutting off discovery or attempting bottom-up reforms of our legal system: the increased use of special masters. Special masters, judges or attorneys sitting by designation and assigned discrete tasks, can increase efficiency, reduce costs, and ensure aggrieved parties get their deserved day in court. Special masters, for example, can successfully undertake many of the more onerous time-intensive tasks foisted upon trial courts, including managing discovery disputes, performing detailed fact-specific calculations of costs and damages, and reviewing documents for claims of privilege.6 Consequently, masters are increasingly common in high-stakes and complex cases in federal court and have a growing track record of success.7 State courts, however, are only recently beginning to embrace the use of masters.8
Special masters can and should play a central role in state court litigation, where courts can task them with complicated and detail-oriented endeavors that would otherwise overburden the court.9 The use of masters is a solution that, rather than usurping the function of the courts, compliments their role as arbiters of disputes. Instead of being tied down in the minutiae of a technical dispute between the litigants (or, more frequently, their attorneys), the court is left to perform its most sacred function: judging the dispute at the heart of the case. Masters provide considered, reasoned answers to complex questions from the outset of litigation, thus allowing courts to decide disputes without exerting unnecessary time or energy. Despite a string of successes using masters in federal court, many state court proceedings amble to a dissatisfactory close without the aid of masters. This perplexing pattern of behavior owes to a few causes, including local rules that often constrain the court’s ability to delegate tasks to masters.10 Likewise, litigants or counsel may harbor lingering concerns that the use of a special master — particularly a private attorney sitting by designation — will be prohibitively expensive when billed at normal rates. This argument ultimately misses the forest for the trees. Any increase in direct costs from the use of masters is offset twofold: first, by gains in efficiency; second, by value added as a result of the master’s expertise.11
Costs in litigation follow from any number of sources, including discovery disputes and motion practice at the trial court level. Costs may also arise, however, from long and tiresome appeals of the trial court’s determination. One way that masters can alleviate much of this burden is by providing a clear and reviewable basis of decision for the appellate court. Masters’ expertise makes it more likely that they will reach a reasoned result that will survive appeal with minimal expenditure by each side. Masters can also distill the most contentious — and complicated — parts of a case into a single report, well-organized and supported by evidence, which saves the parties and judges from having to pour through or even re-create the record. Masters thus are not only more efficient at the beginning of a dispute, but their substantive and procedural proficiency makes it more likely that the trial court’s decision will survive appeal with minimal expenditure by each side, effectively circumscribing the arduous process that bookends most cases.
Special masters, of course, are not an all-purpose tool, but they are an important tool in the litigation toolkit. They can enhance each step of the process between a claim and relief, by seating an expert between the parties to remedy contentious and complicated issues that a trial judge, for lack of time, experience, or both, may be unable to fully consider. Furthermore, by alleviating many of the most complicated aspects of a case before trial, masters can ensure that dispositions are not only reasonable and fair — but affordable. This, then, is ultimately the essential benefit special masters offer: helping to make the venerable right to trial a realistic option for litigants rather than simply a hollow guarantee.
Cary Ichter is the managing partner of Ichter Thomas, LLC in Atlanta. A graduate of the University of Georgia School of Law, he specializes in commercial litigation, franchise and distribution disputes, special master referrals and alternative dispute resolution. Cary is a regular contributor to the Georgia Bar Journal and Fulton County Daily Report. He has been recognized in Best Lawyers in America, Georgia Super Lawyers and Georgia Trends Legal Elite. He has successfully represented both plaintiffs and defendants in significant cases in state, federal and appellate courts, as well as, arbitrations.
1 Lisa van der Pool, Biz Court Program Takes on Discovery Costs, Boston Bus. J., Dec. 25, 2009, http://boston.bizjournals.com/boston/ stories/2009/12/28/story10.html.
2 Michael D. Johnston, Comment, The Litigation Explosion, Proposed Reforms, and their Consequences, 21 BYU J. Pub. L. 179, 180 (2007).
4 Van der Pool, supra note 1 (quoting Joan Lukey).
5 See id.
6 Mark A. Fellows & Roger S. Haydock, Federal Court Special Masters: A Vital Resource in the Era of Complex Litigation, 31 Wm. Mitchell L. Rev. 1270, 1270, 1277, 1297-97 (2005).
7 Thomas E. Willging et al., Fed. Judicial Ctr., Special Masters’ Incident and Activity 3, 8-9, 12 (2000), available at http://www.fjc.gov/public/pdf.nsf/lookup/specmast.pdf/$file/specmast.pdf.
8 Lynn Jokela & David F. Herr, The Role of Special Masters in the Judicial System: Special Masters in State Court Complex Litigation: An Available and Underused Case Management Tool, 31 Wm. Mitchell L. Rev. 1299, 1299 (2005).
9 Id. at 1308-09.
10 See Academy of Court Appointed Masters, State Court Authorities Governing Special Masters, Referees, Commissioners, and Similar Judicial Adjuncts and Comparison State Rules to Federal Rule of Civil Procedure Rule 53 (undated), http:// www.courtappointedmasters.org/ACAM%20 State%20Rules.pdf.
11 Jokela & Herr, supra note 8, at 1311-12.