Special Masters: How To Make the Best of Both Worlds, Part XI

 Part Eleven: The Rule Rather than the Exception

By: Merril Hirsh, James M. Rhodes and Karl Bayer

In Parts Nine and Ten, we discussed how there is a rap on using special masters that stems the way in which special masters are selected and used. As we discussed, currently, when judges bring special masters into cases it is generally both ad hoc (specific to the case, and chosen based on virtually no standardized criteria) and post hoc (often to deal with messy disputes after they have arisen and potentially become intractable, instead of up front to perform active case management). And we hinted at a radical solution – making special masters the rule rather than the exception in complex civil litigation.

The solution has to be called “radical” because, with the exception of specialty situations (such as construction cases in San Francisco where there is a regular procedure for use of special masters), we know of no court that regularly uses special masters for case management purposes, or that maintains a roster of special masters.

Indeed, the wording of Federal Rule of Civil Procedure 53, while not specifically barring broader use of special masters, certainly does not encourage it. Calling Rule 53 the rule that “authorizes” the use of special masters is actually a misnomer.   Literally the Rule is a limitation. It says that “[u]nless a statute provides otherwise, a court may appoint a special master only to perform various functions.” Rule 53(a)(1) (emphasis added). And even then a court “must consider the fairness of imposing the likely expenses on the parties and must protect against unreasonable expense or delay.” Rule 53(a)(3).

To be fair, a special master’s permitted functions are quite broad. They are “to (A) perform duties consented to by the parties; (B) hold trial proceedings and make or recommend findings of fact on issue to be decided without a jury if appointment is warranted by: (i) some exceptional condition; or (ii) the need to perform an accounting or resolve a difficult computation of damages; or (C) address pretrial and posttrial matters that cannot be effectively and timely addressed by an available district judge or magistrate judge of the district.” Rule 53(a)(1). And this language was an expansion from the original 1938 rule.

However, as the Advisory Committee Notes to the 2003 Amendments to the Rule put it, “[t]he core of the original Rule 53 remains, including its prescription that appointment of a master must be the exception and not the rule.”

But the 2003 Advisory Committee Notes are less clear on why special masters should be the exception and not the rule. Putting aside statements that refer to practical concerns that apply more to how (not when) special masters are used (such as notifying parties of the precise scope of the special masters functions; whether and when it is appropriate for the special master to have ex parte communications with the court or the parties; and what documentation the special master should preserve concerning his/her activities), the only statement that appears to address why special masters should be the exception is that “[t]he need to pay compensation is a substantial reason for care in appointing private persons as masters.”

Of course, it is legitimate to be concerned about requiring parties, who cannot afford to do it, to pay a special master. In fact, regardless of whether parties can afford to pay, it is legitimate to be concerned about having special masters if they, in fact, increase costs. But, in the context of modern complex civil litigation, the concern is ironic.

We do not have a system where judges and magistrate judges make complex commercial litigation “free” while special masters cost money. For decades judges, magistrate judges and rule drafters have tried to deal with the cost of litigation. Yet, we have a system where judges and magistrate judges, while not charging directly for their services, lack the time and resources to hold down litigation costs that have increased as such a rate that even comparatively well-healed parties cannot afford to obtain a decision.

In modern complex litigation, cost, far from being a reason not to use special masters save in “exceptional” cases, is the biggest reason to use them regularly. If a special master is doing his/her job, every dollar spent on the special master will result in many times that amount in savings to the parties – facilitating decisions that come on the merits rather than from a war of attrition.

Indeed, the more regular the process is of retaining special masters, the most likely it is to achieve that function. How do we do that? More in Part Twelve.

Read Part One: The Problem.

Read Part Two: Improving the Process, Not Just the Rules.

Read Part Three: What Incentives Are We Creating?

Read Part Four: How Do We Create Better Incentives?

Read Part Five: Incentives Through Expertise.

Read Part Six: An Appellate Court Success Story.

Read Part Seven: Being the Neutral Eyes.

Read Part Eight: How Are Special Masters Perceived?

Read Part Nine: Beating the Rap.

Read Part Ten: Using Regularity to Start Beating the Rap

Read Part Twelve:  An Adjunct to Civil Litigation

Read Part Thirteen: Doing Disagreement as Effectively as Doing Agreement

Read Part Fourteen: Is Doesn’t Just Have To Be Construction That’s Constructive

Read Part Fifteen: Where Else Do We Bring Alternative Dispute Resolution Skills to Dispute Resolution?