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By P. Benjamin Duke and Mari K. Bonthuis, Attorneys, Covington & Burling LLP
Almost a decade after the first groundbreaking court decisions on electronic discovery, no insurance litigator can claim to be unaware of his or her obligations with regard to the collection and production of electronically stored information ("ESI"). In addition to the voluminous case law that has developed on electronic discovery, a multitude of secondary resources exist to guide litigators in fulfilling their obligations with respect to ESI preservation, collection, and production. This article focuses on the specific issues and challenges with regard to ESI that confront counsel for both insurers and their insureds in litigating disputes over insurance coverage.
The first issue presented in any ESI discovery is when must the party begin preserving ESI. For the insurance litigator, this question is compounded by at least two factors. First, most coverage litigation is preceded by a request for coverage by the insured, which may occur months or years before litigation is initiated by either side. Whether a request for coverage gives rise to a duty to preserve must be considered by both insurers and insureds. Second, the scope of the duty to preserve extends to third parties to coverage litigation, such as insurance brokers, underlying counsel, and claims administrators, whose documents are likely to fall within the "possession, custody, or control" of an insurer or the insured. Both policyholders and insurers must take care that documents falling within this scope are preserved.
The production of ESI raises additional questions in insurance coverage litigation, particularly when, as is often the case, the volume of the insured's ESI and other discoverable documents dramatically exceeds the insurer's. A variety of options exist for insureds facing such discovery burdens, including agreed-upon limitations on production sources and the need to supplement productions, use of targeted keyword searches and other technology, such as predictive coding, and cost-shifting. Coverage counsel face a variety of technical and strategic issues that arise in the context of meeting their obligations with respect to ESI and managing the asymmetry that often exists in the volume of discoverable ESI in the possession, custody or control of the parties. This article identifies some of the distinct issues that counsel face in insurance coverage disputes and offers practical guidance for addressing them.
P. Benjamin Duke is a partner in the New York office of Covington & Burling LLP who represents policyholders in a wide range of insurance coverage disputes, including litigation and arbitration. Mari K. Bonthuis is a litigation associate at Covington & Burling LLP who also specializes in insurance recovery on behalf of policyholders. The views expressed in this article are those of the authors, who are solely responsible for them.
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