The Journal of The DuPage County Bar Association

Back Issues > Vol. 25 (2012-13)

Should Illinois Adopt the Federal Court’s Mandatory Disclosure Requirements for Civil Cases?
By James L. Ryan

The discovery process is a critical part of our system of justice, through which parties gather relevant facts, witnesses, and documents for presentation at trial.  However, that process can take months, even years.  Sometimes, the discovery process takes so long and costs so much that a litigant with a valid claim makes the strategic decision that litigation is too expensive to pursue.  Recognizing the high cost of litigation, many commercial contracts now contain binding arbitration clauses that prohibit parties from going to court to enforce their rights.  Too often, justice has a price that is not worth paying. 

Twenty years ago, Congress enacted reforms changing the process parties used to exchange information in the hopes that these reforms would lower the cost of discovery and would speed the resolution of cases in federal courts. Specifically, Congress amended Rule 26 of the Federal Code of Civil Procedure to require parties to a federal lawsuit to disclose relevant witnesses and documents before the parties issued discovery.[1]  In many federal cases, the amended Rule 26 prohibited parties from even issuing discovery requests until after they have met and discussed each other’s disclosures, prepared a discovery schedule, and appeared before the court for a scheduling conference.  

Illinois did not follow the federal court’s lead, and decided against amending its rules to require the mandatory disclosure of relevant witnesses and documents for all civil cases.  Two years after Congress amended Rule 26 to require mandatory disclosures, the Illinois Supreme Court began an experiment with mandatory disclosures by amending its rules to require mandatory disclosures for arbitration cases involving less than $15,000 (now $50,000).  The Court declined to apply mandatory disclosures to civil cases involving more than $15,000. 

In this author’s experience, having litigated in both federal and state court, and having served as an arbitrator, the time has come for Illinois to adopt Federal Rule of Civil Procedure 26(a)’s mandatory disclosures and apply them to all civil cases.   In the twenty years since Congress[2] amended Rule 26(a) to require mandatory disclosures, empirical studies have confirmed that Rule 26(a)’s mandatory disclosures decreased the time and cost of bringing litigation from filing to disposition.  These studies also revealed that the parties subject to mandatory disclosures have felt that their cases were resolved fairly at a far greater rate than those not subject to the mandatory disclosures.  Thus, not only has mandatory disclosure saved time and money, but the disclosures have also left the parties with a greater sense of having justice done.  It is time for Illinois to allow its litigants to enjoy the benefits associated with mandatory disclosures and apply them to all civil cases. 

The Federal Courts Disclosure Requirements. Beginning in 1993, Federal Rule of Civil Procedure 26(a) required parties to make four basic disclosures without being served with a discovery request.  First, the party must identify individuals likely to have discoverable information, along with the subjects of that information.  Second, the party must disclose all documents, electronically stored information, and tangible things that the disclosing party has in its possession, custody, or control and may use to support its claims or defenses.  Third, a party must disclose a computation of each category of damages claimed by the disclosing party.  Fourth, a party must disclose any insurance agreements under which an insurer may be liable to satisfy all or part of a possible judgment in the action or to indemnify or reimburse for payments made to satisfy the judgment.

The stated purpose of the mandatory disclosure requirement was to accelerate the exchange of basic information about the case and to lower the costs of litigation by eliminating the requirement for the parties to ask for the information as part of the discovery process.[3]  In the official committee notes to Rule 26(a), the rules committee noted that in jurisdictions with mandatory disclosures, the disclosures have resulted in a savings of both time and expense for the litigants, particularly when the litigants meet and confer about the mandatory disclosures before they engage in their own discovery.[4] Supreme Court Justice Powell and Judge William Schwarzer, the director of the Federal Judicial Conference (“FJC”) and the principal architect of the mandatory disclosure rules, noted that mandatory disclosures would reduce costs and increase efficiency by allowing the parties to speed up their evaluation of the cases and enable parties to target their own discovery requests to better narrow the issues for ultimate resolution.[5]  

            These mandatory discovery requirements were not enacted without controversy. A mandatory disclosure requirement carries with it two major assumptions.  First, it assumes that more information is better. As the Supreme Court acknowledged in Hickman v. Taylor, “"Mutual knowledge of all the relevant facts gathered by both parties is essential to proper litigation. To that end, either party may compel the other to disgorge whatever facts he has in his possession.” [6]  Second, it assumes when faced with a mandatory disclosure requirement, attorneys will self-regulate and work out disagreements over the disclosed information without judicial intervention. 

The validity of these two assumptions remains the subject of much debate.  When the Supreme Court submitted the mandatory disclosure requirement to Congress for its approval, Justices Scalia, Thomas, and Souter took the unusual step of filing a dissenting statement to the enactment of the rule.[7]  In their dissent, these justices predicted that the disclosures would increase litigation costs by adding another layer of discovery.  Furthermore, the justices predicted that the disclosures would encourage more litigation over what information is discoverable and whether that information should have been disclosed.[8]  These justices also noted that the proposed rule could place an undue burden on a lawyer’s ethical duties.  “By placing upon lawyers the obligation to disclose information damaging to their clients—on their own initiative, and in a context where the lines between what must be disclosed and what need not be disclosed are not clear but require the exercise of considerable judgment—the new Rule would place intolerable strain upon lawyers' ethical duty to represent their clients and not to assist the opposing side. Requiring a lawyer to make a judgment as to what information is ‘relevant to disputed facts’ plainly requires him to use his professional skills in the service of the adversary.”[9]    Ultimately, however, Congress decided to accept the proposed Rule changes and enacted the mandatory disclosure requirements. 

Empirical Studies Confirm the Positive Effects of Mandatory Disclosures. Five years after the federal courts began requiring initial disclosures, the FJC commissioned a nationwide study to determine the effects of mandatory disclosures on litigation.  In particular, the FJC wanted to determine whether the predictions made by dissenting justices over the mandatory disclosures came true.   In its study, the FJC found that in cases in which both parties made the Rule 26(a) mandatory disclosures, parties issued their own discovery requests 89% of the time.[10]  Thus, the mandatory disclosures appear to have made a small impact on eliminating the use of other forms of discovery requests. 

Although the mandatory disclosures did not eliminate the need for additional formal discovery, the study found numerous areas in which discovery proceeded more efficiently as a result of the mandatory disclosures.  Forty-three per cent of surveyed attorneys reported that they had issued less discovery requests than they had previously issued.  Thirty-six per cent of the surveyed attorneys reported an increase in settlement discussions, compared to only 6% who reported a decrease in settlement discussions.  Thirty-three per cent reported a decrease in disputes related to discovery, compared to 5% who reported an increase in disputes.[11]  Thus, the predictions made by the dissenting justices over the increase in discovery and discovery-related disputes do not appear to have come to fruition.

The FJC also looked into Justice Scalia’s concern over an explosion in litigation costs arising out of complying with the initial disclosure obligations.  The FJC found that the median cost for preparing the initial disclosures was $750.00, a substantial savings over the cost of interrogatories ($1,000), document requests ($1,100), or depositions ($3,500).[12]  The empirical data did not reveal much difference in opinion between plaintiffs’ lawyers and defendants’ lawyers on the effect of mandatory disclosures.  The survey data showed only one area where there was a statistically significant difference of opinion.  When asked about the effect the mandatory disclosure requirements had on their settlement discussions, plaintiffs’ attorneys reported that their chances of a settlement improved at a far greater rate than their defense counterparts. [13]  However, when asked about the fairness of the eventual outcome, there was not a significant difference of opinion, with 26% of plaintiffs and 24% of defendants reporting an increase in fairness of outcome after the enactment of the mandatory disclosure requirement.

In addition to the work conducted by the FJC, the private Rand Institute for Civil Justice conducted its own independent study on the effects of mandatory disclosures by analyzing the dockets of 5,000 cases filed both before and after the enactment of the rule, by surveying 2,000 attorneys over the effect of the rule’s enactment, and by reviewing attorney time sheets in 1,000 cases.[14] Like the FJC, the Rand Institute did not find any evidence that the mandatory disclosures gave rise to an explosion of litigation as the dissenting justices had predicted.  In fact, the Rand Institute found that motions relating to compliance with initial disclosure requirements were exceedingly rare, noting:  “Despite the dire warnings of critics of early mandatory disclosure, we did not find any explosion of ancillary litigation and motion practice related to disclosure.”[15]  The Rand Institute also found that early mandatory disclosures by both sides lowered the overall cost of litigation and decreased the total amount of attorney time involved by an average of eight hours per case.[16]  Thus, both the FJC and Rand Institute determined that mandatory disclosures accomplished the goals of reducing litigation costs for the parties involved. 

Supreme Court Rule 222:  Illinois’ Mandatory Disclosure Experiment.    Illinois Courts have yet to fully embrace mandatory disclosures. Mandatory disclosures are now required in arbitration cases involving less than $50,000, but not are not required in larger cases involving more than $50,000.  Supreme Court Rule 222 requires each of the parties in arbitration cases to disclose the following without being served with a discovery request: (1) the factual basis for each claim or defense, (2) the legal theory for each claim and defense, (3) the identities of witnesses to be called at trial, and the subject matter of the testimony, (4) the identities of all persons a party believes may have knowledge relevant to the lawsuit, and the nature of such knowledge, (5) the identities of all persons who have given statements, and the custodian of copies of those statements, (6) the identity of all experts and a Rule 213(f) disclosure of each expert’s testimony, (7) a computation of damages, (8) a description of any tangible evidence or documents that the party intends to use at trial, and any relevant insurance agreements, and (9) a list of the documents that party believes may be relevant to the subject matter of the action.  The Supreme Court provides the trial courts with the authority to make their own rules related to the timing of these disclosures.  In DuPage County, the Local Rules require the plaintiff to serve these disclosures along with its complaint.[17]  Defendants must serve these disclosures no later than 28 days after the defendant’s first court appearance.[18]

Although there has not been an empirical study conducted to test the effect Supreme Court Rule 222 has had on the cost and time it takes to bring an arbitration case to completion, many judges and attorneys have published journal articles about their observations of the positive effect that Supreme Court Rule 222 has had in arbitration cases.  In an article published by the Illinois Bar Journal, three judges, one from Cook County, one from the northern suburbs, and one from downstate, all offered their observations that despite the dire warnings about an explosion of motion practice relating to the compliance with Rule 222, motions related to Rule 222 were exceeding rare in their courtrooms.[19]  These judges also noted that the time it took cases to reach disposition decreased after the enactment of Rule 222; however, they were unsure whether there was a causal relationship between the two.[20]  In this author’s experience, a complete and accurate Rule 222 disclosure eliminates the need to conduct any further discovery in most arbitration cases. 

Illinois Should Adopt the Federal Courts Mandatory Disclosure Requirements for All Civil Cases.        Given the positive effect mandatory disclosure has made in both federal court and in Illinois state court arbitrations, Illinois should adopt a mandatory disclosure requirement for all civil cases.  The empirical studies from the federal court show that mandatory disclosures decrease costs, increase the speed of resolution, and increase overall satisfaction in the outcome.  Discovery’s principal objective is to find the truth.  Thus, the discovery process should encourage the truth to come out as quickly as possible.  It should not be a process of artificial barriers that delay the truth from being disclosed. 

Illinois owes its citizens a forum in which they can resolve their disputes.  Too often, the time and cost associated with resolving disputes in court are prohibitive.  Parties should not have to wait months or years to obtain the facts they need to present to their case to a trier of fact when the other party has those facts at his or her disposal and could be compelled to turn over those facts. If justice delayed is truly justice denied, then Courts must do what they can to remove delay from the truth-seeking process. Mandatory disclosures are one such way to remove delay, and it can be enacted without driving up litigation costs. Therefore, Illinois courts should adopt Federal Rule of Civil Procedure 26(a) and require mandatory disclosures in all civil cases.

[1] Federal Rule of Civil Procedure 26(a)

[2] The Federal Rules of Civil Procedure have a unique way of amendment.  As set forth in the Rules Enabling Act, 28 U.S.C. § 2072, the United States Supreme Court has the authority to promulgate procedural rules that do not “abridge, enlarge or modify any substantive right.” 28 U.S.C. § 2072(b); see also Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2561 (2011).  Once promulgated, the Congress then has 7 months in which to consider the rule. 28 USC §2074.  Unless a majority of both houses of Congress vote to veto the rule change within seven months, the promulgated rule goes into effect.  Id. 

[3] Committee Comments, Fed. R. Civ. P. 26(a), 1993 Amendments.

[4] Id.

[5] William Schwarzer, New Discoveries for the Discovery Process, LEGAL TIMES, Nov. 25, 1991, at 25.

[6] Hickman v. Taylor, 329 U.S. 495 (1947) ("Mutual knowledge of all the relevant facts gathered by both parties is essential to proper litigation. To that end, either party may compel the other to disgorge whatever facts he has in his possession.”

[7] 146 F.R.D. 401, 507 (1993).

[8] Id.

[9] Id.

[10] Willging, supra note iv., at 534.

[11]  Id. at 563.

[12] Id. at 577.

[13] Id.

[14] Kerkalik, et al, Rand Institute for Civil Justice, “Discovery Management:  Further Analysis of the Civil Justice Reform Act Evaluation Data.” (1998) Reprinted in 39 B.C.L. Rev. 613 (1998).

[15] Id.

[16] Id.

[17] Local Rule 13.04(b).

[18] Id.

[19] Hon. Sheila M. Murphy et. al., The "New" Discovery Rules: Measuring Predictions Against Reality, 86 Ill. B.J. 368, 370 (1998).

[20] Id. at 369.

James L. Ryan is an associate attorney at the law firm of Roberts & Caruso, in Wheaton, Illinois. He is a member of the Illinois and Federal Trial Bar, and is a court-appointed arbitrator in both Cook County and DuPage County courts. Mr. Ryan concentrates his practice in the areas of civil and commercial litigation, business law and contested probate.

 
 
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