For Litigators & General Counsel
Who pays for a special master.
Compensation is not a rate card. Under Rule 53 it is a function of the appointing order and of how the court allocates cost among the parties — which means the number is largely set by choices counsel make while drafting, before anyone is appointed.
The Mechanism
What Rule 53(g) actually does.
Rule 53(g) does three separate things, and conflating them is the source of most confusion about what a reference costs.
First, it fixes the basis: the court sets compensation on the basis and terms stated in the appointing order, and may modify that later after notice and an opportunity to be heard. Second, it identifies the source: the master is paid either by a party or parties, or from a fund or the subject matter of the action within the court’s control. Third, it directs the allocation among the parties, against three named factors.
Because the basis comes from the appointing order, the order is where the cost question is really decided. Rule 53(b)(2)(E) requires that order to state the basis, terms, and procedure for fixing compensation — so an order that defers the subject is not saving an argument, it is scheduling one.
Allocation
The three factors the court weighs.
- The nature and amount of the controversy
- A reference in a nine-figure trade-secret case and a reference in a single-custodian document dispute are not comparable expenses, and the rule does not ask the court to treat them alike. Scale the scope to the stake before arguing about the split.
- The parties' means
- Asymmetric resources are an express consideration, not an equitable afterthought. Where one party would be effectively priced out of the reference, that is a reason to adjust the allocation rather than to refuse the appointment.
- Responsibility for the reference
- The factor counsel most often overlook, and the one that most often decides the outcome. Where one side's conduct — an incomplete collection, an unworkable production, a refusal to engage on a protocol — is what made the reference necessary, the court may shift the cost accordingly.
In practice courts commonly split fees evenly, shift them toward the party whose conduct necessitated the reference, or tie allocation to the outcome of the referred dispute. Which of those a court reaches for is heavily influenced by how the moving papers framed the reference in the first place.
The Evidence
What the only federal study actually found.
Almost everything written about what a special master costs is assertion. There is one systematic empirical study: the Federal Judicial Center examined a random national sample of closed federal civil cases in which an appointment was considered, and reported to the Judicial Conference’s Advisory Committee on Civil Rules. Its findings on compensation are set out below.
Read the dates.This study was published in 2000 and describes practice under Rule 53 as it stood before the 2003 restyling. The dollar figures are a historical baseline, not a current quote, and no inference about any present-day rate should be drawn from them. They are reproduced because they are the only federal figures that exist — and because the structural findings beneath them have not dated.
How courts actually allocated the cost
Across the 38 motions for which the arrangement was on the record, an even split was the single most common outcome, but it was not a majority of one — and in no case did a plaintiff bear the whole cost.
| Arrangement | Motions | Share |
|---|---|---|
| Plaintiff and defendant pay equally | 22 | 58% |
| Other (divided among multiple parties) | 9 | 24% |
| Defendant pays 100% | 6 | 16% |
| Plaintiff and defendant pay unequally | 1 | 3% |
| Plaintiff pays 100% | 0 | — |
Source: Federal Judicial Center 2000, Table 9 (n = 38 motions; percentages total 101 in the original owing to rounding). All six appointments in which a defendant bore the entire cost came after liability had been determinedby judgment or settlement — which is the finding counsel most often need and least often see stated.
How the rate got set
The study found that judges generally did notset the master’s rate. The common practice was the parties and the master negotiating it, usually at the master’s standard hourly rate, with costs and expenses paid on top of that rate in most cases. That is the single most useful thing to know before drafting the compensation provision: it is a negotiated term, and the order records it rather than dictating it.
Two structural devices appeared in the sample and are worth borrowing. Judges and parties occasionally placed a monetary cap on total fees; in one instance a flat fee was arrived at by competitive bidding. And several judges wrote a liquidated penaltyinto the order of reference, triggered automatically if the master was not paid within a set period after the parties received a billing statement. The study’s authors reported being unaware of any instance in which a party refused to pay its share.
The 2000 figures, as figures from 2000
Rate information appeared in the record for twenty-one of the appointments, roughly a third. The median was $200 per hour, with half the rates falling between $150 and $250. Total compensation could be established for twelve appointments: a median of about $63,000, though a quarter of those appointments involved total payments of $315,000 or more — all of them protracted matters in which a master served a major role for years.
The spread is the point, not the midpoint. A reference scoped to one discrete question and a reference that runs alongside a decade of litigation are different products, and the distribution above is what that difference looks like in the record. Which one an appointment becomes is decided by the scope provision, not by the rate.
Source
Thomas E. Willging, Laural L. Hooper, Marie Leary, Dean Miletich, Robert Timothy Reagan & John Shapard, Special Masters' Incidence and Activity (Federal Judicial Center 2000). Compensation findings at pages 41–44; allocation data at Table 9.
Cost Control
Five drafting choices that change the number.
Enumerate the scope
An order that lists the categories the master may reach costs less than one that refers “all discovery disputes.” Open-ended scope invites the same motion practice the reference was meant to replace, now billed at an additional rate.
Reserve dispositive questions to the bench
Referring questions of technical fact while keeping legal and dispositive rulings with the judge keeps the reference narrow and keeps Rule 53(f) de novo review from becoming a second full round of briefing.
Fix a reporting cadence
A stated cadence and format for reports converts an indefinite engagement into a predictable one, and gives the parties a checkpoint at which to narrow what remains in dispute.
State the compensation basis in the order itself
Rule 53(b)(2)(E) requires it, and deferring it to a later hearing is how a fee dispute gets created. Fix the basis, the terms, and the procedure at appointment.
Permit ex parte contact where it saves time
Rule 53(b)(2)(B) requires the order to address ex parte communication. A reference that forbids all of it forces every clarifying question through joint correspondence, which is slower and therefore more expensive.
Each of these is a provision in an actual order of reference. The annotated model orders pair every provision with a note on what it does, and what to include in an appointment order walks the same ground in prose. For the reference type this most often arises in, see the e-discovery special master.
Scoping a Reference
Scope it before you argue about the split.
A short scoping conversation establishes what a reference would actually need to reach — which is the input to both the compensation provision and the allocation argument.