How to Decide if Your Civil Case is Worth the Expense of a Trial
Posted In: Litigation   | Posted by: Arenstein & Anderson Co., LPA
It is important to have an experienced trial attorney represent you in litigation matters. Among other things, a trial attorney can provide you with an accurate cost/benefit analysis of your lawsuit as it proceeds and assist you with decisions on whether you should settle your lawsuit, agree to some form of alternative dispute resolution, or, ultimately, take your case all the way through trial.
A law school professor once said, “There are no winners in the courthouse.” By this he meant that even parties that prevail in litigation do not “win” in the classic definition of the word. They achieve monetary compensation for their injuries, but this compensation does not cure the harm. Instead, it either returns them to the place they would have been prior to the monetary harm or compensates them for some physical or psychological harm they suffered. This compensation is quite important to the harmed party, but all things being equal, most people would rather have not suffered the harm at all. Therefore, even prevailing in the litigation does not make them feel like “winners”.
Nonetheless, litigation is sometimes necessary to right a wrong, and, whatever faults people may find with this country’s current system of justice, history shows it to be the best manner for resolving disputes that cannot be resolved without the intervention of a neutral body.
The purpose of this post is to discuss the relative advantages and disadvantages of litigating an issue and the importance of seeking settlement avenues whenever possible. Although the term “litigation” encompasses all forms of court actions from capital murder to small claims court, this post will focus primarily on a cost/benefit analysis for a standard civil matter. Keep in mind, though, that every case is different, and no hard and fast rules exist for how much something will cost to litigate. Many variables go into the equation such as the experience of the attorney, the complexity of the issue and the area of the country in which the matter will be litigated (attorneys in larger cities charge more per hour than attorneys in small towns).
Lawyers can be paid in two different ways: hourly or contingency. In an hourly arrangement, an attorney will keep track of all hours spent on your matter and, usually, invoice you monthly. In a contingency fee arrangement, the attorney will take a percentage (usually 1/3) of the total settlement or award. The advantage to contingency fee arrangements is that it provides injured parties access to the legal system without much in the way of up-front costs. The disadvantage of such an arrangement is that if the matter settles quickly, the injured party’s settlement can be less, after factoring in the contingency fee, then it would have been had a more traditional fee arrangement been selected. Sometimes contingency fee arrangements are the only way to go. This is particularly true in trying economic times when cash flow is tight. Finding a trustworthy attorney is key in this decision and you should always realize that the ultimate decision on whether to settle and for how much rests entirely with the client.
In his 1961 inauguration speech, John F. Kennedy stated, “Let us never negotiate out of fear. But let us never fear to negotiate.” These words have relevance in many aspects of life—litigation being one of them. The vast majority of all civil actions settle without a trial. The reason is that trials can be quite expensive. People who watch legal dramas often have the misconception that the time between the filing of the complaint and the trial is only a few weeks or perhaps a month. The reality is, however, that it usually takes at least a year from the time a civil action commences until it goes to trial. During this time, the attorneys for the parties engage in discovery, which involves gathering and reviewing documents, taking depositions of witnesses, and drafting and responding to a variety of motions. Depending upon the complexity of the issue, the number of parties involved and the number of lawyers involved, attorneys can spend hundreds of hours on a case from start to finish.
In performing the cost/benefit analysis of whether or not to go to trial, realize that it is highly unlikely that the plaintiff will be awarded the full amount he or she seeks to recover from the defendant. If the opposing party is willing to hire counsel and go to trial, it probably has good defenses to the claim that can lower the award. Also, the American Rule is that the parties are responsible for their own attorney’s fees. There are some occasions when attorney’s fees can be awarded to the prevailing party, but when performing a cost/benefit analysis you should never count on it. Discuss the matter fully with your attorney and ask for an honest assessment of your case and how much it will cost to litigate. Cases frequently settle on the courthouse steps, so remember that until a verdict comes down, a settlement can always be reached.
Because of the cost of going to trial, the field of alternative dispute resolution (“ADR”) has increased in popularity. Mediation is the most common form of ADR, and one that courts have the power to order parties to undergo. Arbitration is the other most commonly used form of ADR. Arbitration more closely resembles an actual trial. If you are ever involved in litigation, make sure that you and your attorney are looking into any and all types of ADR with an eye to quickly and efficiently resolving your matter.
More often than not, the cost and risks to go to trial in a civil matter outweigh the potential benefits, which is why so few do. The typical lawsuit timeframe provides ample opportunity to engage in settlement negotiations and ADR. Also, as discovery proceeds, different facts, either harmful or helpful can be discovered that clarify the relative strength and weakness of the party’s positions and dictate the range of settlement negotiations. Sometimes a trial is necessary, and it can lead to a good result, so never be afraid to litigate. However, a trial is time consuming and parties need to make sure it is worth the time and expense. The bottom line is that it is essential to have an experienced advocate on your side to help you with this cost/benefit analysis and to help you decide whether to roll the dice at trial or reach a satisfactory compromise prior to trial.
Arenstein & Andersen Co., LPA is a Dublin, Ohio law firm that provides comprehensive litigation representation services. We can help with all aspects of civil litigation, including representation in jury trials, in most areas of Ohio and Federal law.