The unseen cost of litigation

I am becoming less of a fan of litigation as time goes on. The fact is litigation is becoming more of a hindrance to business than a help because of the time need to fully conduct a matter, let alone the cost. Where courts are really useful is where you have a matter of great urgency and there the courts can really assist you because you can generally be in court in a matter of days and have some kind of ruling really quickly. In other matters you can really wait a while. To add to this there is also the risk of rulings long the way that really make little sense. I had a ruling in a case this last week which really didn’t make any sense to me. It was overly formalistic and the magistrate had little regard to the bigger picture and disposing of the matter where there was no opposition. Instead I have now been put back about a month and a half and risk coming up against some other unforeseen glitch when I bring this matter back to court.

There is a post titled “Memo to clients – What are the iceberg costs of litigation?” on the Human Law Mediation blog which lists a few costs clients often don’t anticipate when litigating and which should be considered as part of the total cost of litigating:

  • Damage to company reputation of litigation
  • Loss of customers
  • Damage to Company morale
  • Missed opportunities and diversion of management time

Litigation sounds great when you are about to start it but don’t kid yourself by expecting it to all be over in a month or two. It is a long and costly process to be undertaken when absolutely necessary. For other matters prevention is often part of the cure. Make sure you spend a little extra making sure your agreements are properly drafted and you include alternative dispute resolution clauses (for example, arbitration clauses) that the parties undertake to invoke when there is a dispute. These alternative dispute methods can help you cut down the time it takes to resolve disputes considerably even if they can be a bit more expensive than court litigation. Often a speedy resolution to a dispute can be worth the time saved in gold.

Remember the old adage: in litigation the only people who win are the lawyers!

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