E-Discovery

The process of identifying, preserving, collecting, reviewing, and producing electronically stored information — including emails, documents, databases, and communications — in response to litigation holds and discovery requests. E-discovery has become a dominant cost driver in commercial litigation due to the exponential growth of digital data and the technical complexity of culling and reviewing large data sets for responsiveness and privilege. For litigation funders, e-discovery costs are a key budget variable requiring careful scoping with counsel, because unanticipated data volumes or adversarial discovery tactics can materially increase case spend and compress returns. Technology-assisted review and predictive coding tools have reduced per-document costs but have not eliminated the need for rigorous cost management.

Because e-discovery costs scale with data volume rather than case complexity, funders treat an early data-volume assessment as a required underwriting input, not an afterthought — a case against a defendant with a decade of unstructured email can cost far more to litigate than its damages theory would suggest. Funders increasingly require counsel to specify the review technology and vendor to be used before finalizing a budget, since predictive coding and vendor selection can materially change the cost curve.