When a court appoints a discovery special master under Rule 53, cost is not an afterthought — it is a structural feature the rule addresses at appointment and again at payment. This article explains how Rule 53 governs a master's compensation, how the appointing order fixes the basis and terms, and how courts allocate the expense among the parties, drawing strictly on the text of the rule and the Advisory Committee Notes.
Cost Is a Threshold Consideration at Appointment
Before a master is ever appointed, Rule 53 requires the court to weigh the expense. Rule 53(a)(3) directs that "In appointing a master, the court must consider the fairness of imposing the likely expenses on the parties and must protect against unreasonable expense or delay." This is not discretionary window-dressing; it is a mandatory gate that frames every appointment.
The rule's structural bias reinforces this caution. As the 2003 Committee Note explains, "The core of the original Rule 53 remains, including its prescription that appointment of a master must be the exception and not the rule." A litigator facing a proposed reference should expect the court to test whether the anticipated cost is justified by the difficulty a master would resolve, and whether an available judge or magistrate judge could handle the matter instead.
The Appointing Order Must Fix the Basis and Terms of Compensation
Rule 53 requires that the economics of the engagement be spelled out up front. The appointing order must state "the basis, terms, and procedure for fixing the master's compensation under Rule 53(g)." This means the parties should know, before the master begins work, how compensation will be measured — for example, the rate and structure — and the procedure the court will follow to fix it.
Parties are entitled to input on the appointment itself. Rule 53(b)(1) provides that "Before appointing a master, the court must give the parties notice and an opportunity to be heard," and that "Any party may suggest candidates for appointment." That hearing is the practical moment to address rates and cost controls, because the terms set here govern later.
How the Court Fixes and May Revise Compensation
Under Rule 53(g)(1), "Before or after judgment, the court must fix the master's compensation on the basis and terms stated in the appointing order, but the court may set a new basis and terms after giving notice and an opportunity to be heard." The default is the deal struck at appointment, but the court retains flexibility to reset the terms — subject again to notice and a hearing.
The rule also addresses the source of payment. Rule 53(g)(2) states that compensation "must be paid either: (A) by a party or parties; or (B) from a fund or subject matter of the action within the court's control." In ordinary discovery references the parties bear the cost directly; a fund is available only where the action controls one.
Allocating the Cost Among the Parties
Who ultimately pays, and in what proportion, is governed by an explicit set of factors. Rule 53(g)(3) provides that "The court must allocate payment among the parties after considering the nature and amount of the controversy, the parties' means, and the extent to which any party is more responsible than other parties for the reference to a master."
This is significant in the discovery context: a party whose conduct made a master necessary may bear a larger share. The allocation is not frozen — "An interim allocation may be amended to reflect a decision on the merits," so early cost-splitting can be adjusted as the case develops.
When a Magistrate Judge Serves — No Master's Compensation
Cost analysis changes entirely if the court uses a magistrate judge rather than an outside master. The 1983 Committee Note explains that "The creation of full-time magistrates, who serve at government expense and have no non judicial duties competing for their time, eliminates the need to appoint standing masters," and that "when a magistrate serves as a special master, the provisions for compensation of masters are inapplicable."
The same Note recognizes when the added expense of an outside master may nonetheless be warranted: such masters "may prove useful when some special expertise is desired or when a magistrate is unavailable for lengthy and detailed supervision of a case." For parties weighing cost, that is the practical trade-off — a magistrate carries no compensation charge, while a private master's fees must be justified by expertise or availability the court cannot otherwise obtain.
This article is provided for general informational purposes only and does not constitute legal advice. Engagement of Daniel Garrie as a neutral is administered exclusively through JAMS.