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Managing the High Cost of Litigation for Individuals and Small Businesses: A Lawyer’s Perspective

By Johanna McNulty

 

As a litigation lawyer, every day I see firsthand the financial and personal strain that lawsuits can have on my clients. Oftentimes, the first time I meet a client is after they have been served with a Statement of Claim, or they themselves have need to commence litigation because disputes between shareholders, contracting parties, vendors, etc.,  have escalated to the point where the parties can no longer deal with each other directly without the use of lawyers.

 

What faces individuals at these critical moments in time are a few different sensations; including: fear of the unknown, worry about the cost of a lawyer, high stress and high emotion and either a desire to fight or to settle. Sometimes, the stress of being served with a Statement of Claim leads clients to experience feelings of denial and avoidance. As a result, clients have walked into my office not knowing when they were served with a claim, or nearly at the end of the minimum of twenty days you are allowed by law to respond to a claim with a Statement of Defence.

 

When individuals do eventually walk through my door, one of the most significant concerns they are faced with is the cost of legal services.

 

Understanding and managing this concern is a critical role of a litigator. My practice is to advise my clients not only on how to advance their legal position, but also how to manage and minimize the risks and costs associated with litigation.

 

Part of that involves informing clients of the reality that if a matter does not resolve early on, there is a direct correlation between the intensification of conflict or the normal progression of a lawsuit, and the cost of the legal services that may be incurred.

 

Without early resolution, the course that an action typically follows after the exchange of pleadings is the production of documents, discoveries, pretrial and trial. What those unfamiliar with litigation do not realize, however, is that smattered between those expected stages can be costly motions and long delays, all of which can serve to increase the costs of a proceeding.

 

The high cost and uncertainties of litigation serve to emphasize the importance of an often under-utilized area of a litigator’s practice: risk management and litigation avoidance.

 

One of the most effective ways of minimizing the costs of legal disputes is seeking advice early on, at the outset of a dispute. The reason for this is because at the earliest stages of any conflict, before lawyers have appeared and before the parties have taken entrenched positions, clients can make use of the strategic advantage they have in recognizing conflicts and seeking behind the scenes advice on how to act and manage the dispute. All of this can occur without the other side realizing the course of events are being strategically reviewed and directed by counsel.

 

At the core of a litigation avoidance and risk management approach to the legal disputes is strategic thinking. The most critical aspect of this; however, is a recognition of the fact that strategy is a joint effort between a lawyer and a client.

 

Taking a client-centered approach to the law and legal strategy means considering the needs of an individual or organization in decision-making. The primary reason for this is the fact that the consequences of all legal decisions are most acutely felt by the client.

 

Strategic thinking is about identifying needs and goals and creating a plan to see them through. Setting goals allows you to identify priorities and it shapes strategy by creating an outcome driven approach. It is important, therefore, in any dispute, for clients to communicate with their lawyers who or what they are, what their personal and organizational goals may be and their desired outcomes in a given situation.

 

Practical goal setting and strategizing for a litigator involves identifying and balancing clients’ motivations, their appetite for risk, the time within which they can tolerate the action to continue and their budgets.

 

Although there are certainly situations where litigation is the best and only course of action, the uncertainty of cost and outcome in litigation justify the investment of at least some time and thought into strategy or strategic alternatives.

 

If you or your business have found yourself in a circumstances where you can foresee conflicts escalating into legal disputes, or if you have already become involved in litigation, it is worth taking the time to review with a lawyer whether your situation warrants litigation, or to assess if settlement, or more efficient and cost-effective alternatives exist.

 

At Lancaster Brooks and Welch LLP, our litigation department is committed to taking a cost-effective and client-focused approach to delivering strategic legal advice. Johanna McNulty is an Associate in LBW’s Litigation department and may be contacted at 905-641-1551 or lbwlawyers.com

 

 

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