The High Cost of Litigation
As advocates, one of the things attorneys are constantly called upon to do, is to educate clients on the “costs” of litigation. In that vein, litigators often speak of costs from the standpoint of the dollars and cents which will fly, more quickly than most people realize, out of the client’s pockets while ‘justice’ is aggressively pursued in courts or other tribunals. Clients are counseled to take those costs into account in evaluating settlement; as they should. What good does it do to pay $50,000 in non recoverable attorneys’ fees pursuing a claim worth no more than $25,000 at most? Careful evaluation of the facts and law early in the process are crucial to that analysis. Few clients want to spend their hard earned dollars solely to vindicate “the principle” of the matter, with rare exceptions that seldom apply in the real world. Most clients in civil and business litigation disputes want monetary recompense and by that, they mean a net “recovery” above and beyond their hard dollar legal costs, at the end of their litigation road.
But how often do lawyers speak of the non-monetary costs of litigation? Rarely, in my experience, is that calculus a part of the litigation lexicon. Often, however, it is the most important accounting that must be done in order for the client to make a truly “informed” decision about settlement. Most lawyers are not psychologists, however, experience provides much valuable information on this topic. Clients are not fully served if their attorneys do not make some attempt to educate them about the non monetary costs of litigation before the battle is joined.
There are several areas which should be considered and discussed at the earliest possible stage in any dispute resolution process. Clients may be in denial at first–many are–however, the counsel given on this important topic will undoubtedly ring true as the person travels farther and farther down the bumpy litigation highway and openings may be created for dialogue and resolution that would not otherwise have been present.
The process of being involved in a formal dispute resolution process, whether in court, arbitration or any other adjudicative tribunal, is fraught with ongoing stress. Much investment of time and effort is generally required of the disputants as well as their legal team and the result is largely out of the control of those whose interests are at stake. While hard work and good preparation certainly stack the deck in one’s favor, any lawyer who tells their client that his or her case is a “slam dunk winner” is committing malpractice of the worst kind. This stress is not relieved entirely even if the case is ultimately won, since most adjudicative processes are subject to appellate review of some kind and disputes can go on for years without final resolution. Onelawyer in a recently concluded dispute, had conducted three full jury trials of the case over the ten years that it wound through the legal system. By the end, the client was hospitalized with a myriad of illnesses which the doctors opined were related to the stress of that ongoing, seemingly never ending, case. Stress takes a heavy toll and, according to many studies, its effects accumulate over time.
Litigation is what trial attorneys do to earn a living. However, with rare exceptions, most clients do not litigate to make money. They are involved in diverse enterprises; everything from construction to fish farming. The common denominator is that they all do something other than litigate to earn a living. When these people become involved in litigation, they must take energy, effort and thought away from those enterprises and channel it into the litigation. It takes effort to accumulate and organize the relevant documents, to prepare responses to written discovery and consult with counsel on the many issues that arise during a case. In addition, time off must be given for employees, often key employees, to participate in interviews, preparation for and participation in depositions and trial. The disruption is no less (and often more) when the dispute is personal rather than business related. What productivity is lost through the loss of those hours? What would be gained if that energy were focused on matters that move the business forward or give the individual client a sense of accomplishment or personal satisfaction? These are key questions that must be addressed if the true cost of litigation is to be assessed.
When adversaries do business in the same industry, the risk to ongoing business relationships is obvious and most often readily addressed. However, every litigation involves relationships of some kind and the savvy attorney does well to investigate that issue early. What is the history between the adversaries, if any? What would the opportunities be for a relationship in the future if this dispute is amicably resolved? Are these people going to continue to encounter each other in their ongoing lives regardless of the outcome of this particular dispute? If attorneys are to be “counselors” at law instead of merely hired guns, these are questions which should be asked at the outset of disputes. Each case brings its own unique concerns, however, it is most often up to the lawyers to keep the bigger picture in mind and to assist their clients in seeing that life will go on after the case is resolved (as it will inevitably be, one way or the other), and that burning bridges (or leaving them contaminated with radioactive anger with a half -life of eternity) is rarely the best way to end any transaction and even more rarely gives the kind of satisfaction that the bridge burner hopes will be achieved.
“How much will it cost?” The client sitting across the table needs to know far more than how many hours at what billable rate in order to control their destiny ina meaningful way in a litigated dispute. Take some time and give them information on the non-monetary costs of litigation. Most will thank you when the dispute is resolved and their emotional and physical bank accounts are not emptied along with their material one.
Previously Published at Kurtz Law Group.