Game Changer: “Proportional” Discovery is Almost Here in the Federal Courts 

Subrogation & Recovery Alert

October 5, 2015

For those who might not know, a big change is coming on December 1, 2015 to the scope of discovery in the federal courts. Several amendments to the Federal Rules of Civil Procedure are set to become a reality on December 1, 2015 if Congress does not act, but none more important to the world of subrogation than the change in the “scope” of discovery allowed. The scope of discovery, aka how we exchange information in a case and what we get to ask each other to do in a case, is going to change from allowing what is “reasonably calculated to lead to the discovery of admissible evidence” to what is “proportional to the needs of the case.” While at first glance some might think this is just new phrasing that will not mean much in the long run, it is a game changer for insurance claims professionals, recovery personnel, and subrogation attorneys who consider litigation in the federal courts.

For a long time, the scope (or type) of discovery allowed to both sides in the federal courts has been a broad standard known as reasonably calculated to lead to the discovery of admissible evidence. Unfortunately, in subrogation cases, this has sometimes resulted in time consuming discovery and overbroad discovery requests that defense counsel sometimes use as a means to derail the focus of a case or delay other more meaningful discovery. These discovery issues sometimes come in the forms of requests for unrelated claims files from other losses, unrelated corporate documents of carriers, requests for underwriting materials, or unnecessary depositions of recovery or office personnel. Often, even when we fight the good fight and oppose these broad requests because they are not likely to lead to admissible evidence and are not truly important in the overall life of a case, the court is lenient with our adversaries and allows the discovery under the scope of “reasonably calculated.” Essentially, the existing standard of discovery in the federal courts lends itself to naturally allow more, not less.

The new standard of “proportionality” is not just new phrasing but a true change in scope, signaling to all litigants in the federal courts that discovery requires a balancing of interests and the actual needs of the specific case. The proposed amended version of Rule 26(b)(1) of the Federal Rules of Civil Procedure, which is where this new standard can be found, explains clearly that discovery will need to be “proportional to the needs of the case” and sets out the following factors to consider in making this determination:

  • the importance of the issues at stake in the action,
  • the amount in controversy,
  • the parties’ relative access to relevant information,
  • the parties’ resources,
  • the importance of the discovery in resolving the issues, and
  • whether the burden or expense of the proposed discovery outweigh its likely benefit.

Admittedly, most of these factors did exist in the rules before, but, now, the amended rule places them upfront and ties them directly to the new standard of proportionality.

The language of the new rule and the factors to consider present a favorable change for subrogation cases, as our cases are usually for sums certain with an already known group of witnesses and experts, which would allow us to tailor the discovery plan from day one. Using these factors, recovery counsel now has better language upon which to rely to oppose far reaching requests for documents and depositions that are not truly material to claims or defenses in the case. Of course, our adversaries will argue otherwise and try to distort the change, but there is no denying that this change was meant to tailor and limit discovery to each specific case and can be a weapon that we can employ to increase speed and efficiency in litigating cases in the federal courts.

Like any change in the rules, this change will be further fleshed out over the next few years through court decisions interpreting what proportionality and its factors mean. However, the way in which the rule was amended leaves little doubt that this is a game change moment for discovery in federal courts and that recovery counsel and insurance claims personnel now have a new tool to limit unnecessary discovery in federal court. And, if your state’s law allows for broader based discovery or employs the old standard, as many do, you may want to see if you can meet the requirements to file your case in federal court and take advantage of this new standard after it becomes effective in December.

If you are interested in reviewing the amendments in full, they can be found here



Joseph F. Rich


(786) 871-3941

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