Electronic discovery is a very expensive process, both in preparation as well as inspection if not carried out carefully. It also changes the dynamics and initial cost burden in a matter; traditional discovery put the burden of copying documents on the inspecting party, whereas that shifts during electronic discovery (of course, the final burden may shift after costs orders).
Einstein J discussed these and other issues in Richard Crookes Constructions Pty Limited v F Hannan (Properties) Pty Limited  NSWSC 142 (6 March 2009). He said "the reference to cost effectiveness ... in the practice note is appropriately construed as a reference to overall cost efficiency of the discovery process, including the benefits to be gained i nthe later progress of the trial." I have seen many affidavits opposing electronic discovery based solely on the cost of the discovery process, ignoring the "overall cost efficiency" that can (but not always) arise.
The process does tend to accelerate the expenditure of costs. His Honour said "The contention is that the mere fact that the incurring of costs is accelerated to the time when discovery is given as opposed to the time of inspection would not be an influential, let alone decisive, factor in favour of refusing the order for electronic discovery . That is especially so, it is contended, if the overall costs are likely to be lower. In my view there is substance in each of those contentions... an electronic data base of discovered documents is likely to be productive of greater flexibility, efficiency and utility in the proceedings... the trial is likely to run more quickly and efficiently as new issues arise or old issues are refined or modified, requiring the compilation of documents in new ways or the production of newly significant documents."
The CloudThe USA's Fourth Amendment says "The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized."
This only applies to the US governemnt, but the also US has legislation that gives subjects "fourth amendment-like rights" in relation to data held by private companies, so even Google
or Microsoft can't read US subjects' email even though they store them, nor release them without a warrant.
Recently the USA government wanted to search the contents of an email account that was held "in the cloud" (like your ISP, or Hotmail and GMail); i.e. stored online rather in a home or business. An application for a search warrant was made, and it ended up in the USA District Court, District of Oregon, Nos. 08-9131-MC, 08-9147-MC. The Court held that notice of the warrant did not have to be given to the consumer - only to the email company, overruling an earlier magistrate's decison. It was likened to seizing a package from a courier - only the courier receives the warrant; not the sender or recipient.
Now, if the rozzers come into my house with a warrant I will probably notice them and therefore be aware of the warrant. However, if they issue the warrant to Google in relation to my email account I won't know about it and therefore can't try and get an injunction.
Prudent non-disclosure agreements have clauses requiring each party to notify the other of any warrants or other judicially required disclosure so that injunction applications can be made. However, if you store your data in the cloud or with a third party you had better make sure that you have the same rights - although one wonders what a suitable remedy for breach would be.