Many have concluded that the risk and exposure of litigation cause companies to make business decision about legal claims. So if faced with a $500,000 expense to do discovery of electronic stored information(ESI), some would rather settle the case for $100,000 even if it has no merit.
But does the mere request for information from a government regulator impact the company? Well of course it can. Take for example the request for records by a federal agency of a well known public company in the news recently. The day the information request became known the stock went down 5% which is millions and millions of dollars.