Your business has decided to invest in winning a lawsuit. How do you manage
the litigation expenses? Consider these five tips.
1. Do Not Agree to Binding Arbitration. Before any lawsuit appears on
the horizon, consider eliminating arbitration clauses from your contracts.
Except for smaller disputes (like some employment cases), arbitration is not
less expensive or faster than courtroom litigation. One reason for this is the
fact that most courtroom cases settle before any trial occurs, thereby
eliminating a lot of actual cost savings. Also, arbitrators – who charge fees by
the hour or by the day – sometimes hesitate to decide a case summarily without a
full hearing. The discovery process in arbitration can be less expensive than in
other litigation, but that discovery can also be less effective, making your
case tougher to prove. And parties often spend time and money suing over the
validity of the arbitration clause itself.
2. Assess the Value of Your Case Carefully. As soon as possible, it is
wise to make a conservative valuation of what you really stand to win or lose in
the lawsuit or arbitration. Then use that estimate in deciding how much you
should reasonably invest in legal expenses. Especially at the outset of a new
case, it can be easy to rely on enthusiastic hopes for a massive judgment or
wildly pessimistic fears of losing a huge punitive damages award. Instead, spend
time with your lawyer and an accountant or other professional to put reasonable
boundaries on the expected upside and downside. You will find the actual
litigation expenses much easier to bear if your initial budget for the case
matches an accurate valuation of what’s at stake.
3. Invest Early to Promote a Favorable Settlement. It’s a fact that
most cases settle before any trial or arbitral hearing. And settling at the
early stage of the case, rather than settling on the courthouse steps – months
or years later – saves more legal expenses than anything else. You can create
early momentum and negotiating leverage by taking the initiative to challenge
the other side’s weakest claims and defenses. Likewise, you can deflect the
other side’s energy and resources by taking care that your own contentions will
stand up to their attacks. Nothing saps your credibility as a negotiator more
dangerously than making overly-aggressive assertions that are vulnerable to such
an attack. As a result, an up-front investment in careful lawyering and
initiative is more efficient than any other strategy for controlling costs.
4. Help Your Expert Witnesses. In many cases – such as disputes
involving new technologies or complicated financial arrangements, for example –
proving your side of the story will require using (and paying) professional
expert witnesses. Your lawyers will also depend on the experts in understanding
the strengths and weaknesses of each side’s position for purposes of settlement,
and in preparing the case for decision. Those pre-trial consultations often
account for most of an expert’s billings in a case. You can keep those billings
under control by making your own high-level employees available to educate both
the attorneys and the experts. After all, your own people are the real experts
on the topic of your technology and your business.
5. Stay on Top of the Calendar. As a client involved in a lawsuit, you
can manage costs by understanding the timing of the work that your lawyers and
your own employees will need to perform. Talk with your lead counsel regularly
to understand the calendar of events – for the short term, and for the expected
life of the case through trial. You cannot control the schedule, except in
limited ways, and partly this is because you cannot control the actions of your
opponent. But understanding the calendar allows you and your attorney to budget
and plan for the necessary work. This should help you avoid some of the nastiest
surprise billings.
Robert E. Kohn is a lawyer specializing in litigation of
complex technical and business disputes. The information in this article has
been prepared for informational purposes only and not as legal advice.
Kohn Law Group, Inc.
2120 Colorado Avenue, Suite 160
Santa Monica, California 90404
Tel: (310) 453-1388 www.kohnlawgroup.com
State and
Federal Combined
Labor Law Posters
Attractive, laminated poster combines
state, federal, OSHA and USERRA required labor law notices on one
laminated poster.
Order
Now.
Employment Application Forms
Store application and other employment forms you need on your
own computer and print them as needed. Available for at-will and
just-cause states.
Details >>
Get
free marketing, sales, advertising
and management ideas
delivered to your inbox.
Subscribe to the Business
Know-How
Newsletter
The information compiled on this site is
Copyright 1999-2008 by Attard Communications, Inc. and by the individual authors.
Business Know-How is a woman-owned business and a registered trademark of Attard Communications, Inc.
Phone: 631-467-8883.
