Every business will at some point encounter legal disputes and some of these will escalate to litigation. For small business, the outcome or cost of litigation can often determine the company’s very survival. Tom Hakemi and Lisa Ridgedale are two Vancouver litigators who offer the following tips to reduce business litigation costs:
1. Fit the lawyer to the case, not the case to the lawyer. When faced with possible litigation, some businesses react by engaging the company’s general outside counsel to handle the matter. This can result in an expensive pairing as the company’s law firm may not be specialists in the particular area of concern, and their slower response and learning curve can cost you money.
For each business dispute, clients should identify the business interests at stake and then identify appropriate counsel from a selection who know the business; would be suitable to deal with the matter in terms of expertise and temperament; would cost an amount proportionate to what is at stake for the business.
2. Be involved – set goals and a budget. Even for sophisticated business people, dealing with lawyers can be stressful and confusing due to the unpredictable nature of the litigation process. Clients can feel reluctant or even shy about asking questions and getting involved in the process. One danger of clients taking a hands-off approach is they end up surprised by the costs of litigating; another is that the case proceeds in a way the client does not want.
A smart lawyer won’t be offended by you wanting to set budget and goals or asking questions. Working together to set goals and a budget for the litigation will help alleviate some of the stress and unpredictability, and this greater clarity will enable counsel to carry out the client’s instructions more efficiently.
3. Communicate as you execute. Client and lawyer should avoid long gaps where there is no communication unless the matter is dormant. Communication as the matter proceeds can be tailored to the individual needs of the client and the case.
Good communication starts from the first meeting. Subjects to bring up at the beginning of the relationship include: client goals, budget, preferred style of communication, method and frequency of billing, how many lawyers will be working on the matter and at what rates, etc.
Litigation comes with enough surprises such as manoeuvres from the other side or unexpected decisions from the court, but to the extent that matters between the client and counsel can be communicated and agreed upon at the beginning of the retainer and regularly throughout, the greater the reduction in expense and stress.
4. Consider discovery steps carefully. Litigation typically requires each side to disclose relevant evidence in the form of documents and live witness testimony. The widespread use of computers in business means the volume of documents implicated in litigation is often high and can include disclosure of e-mails, internal documents, text messages, pictures, and recordings.
Adhering to discovery rules without doing a cost-benefit analysis of what needs to be included, and not exploring options for efficiencies with the other side, is almost certainly going to result in more spending on discovery.
Give careful thought to what should be produced for discovery, and have a discussion with the other side about intelligent ways of reducing the burden and costs. In circumstances where a large volume of documents is implicated, the parties may agree to limit searches for relevant documents to within certain date ranges, business segments, or particular employees, for example.
5. Settle when it makes sense. While good counsel should vigorously pursue or defend their client’s position, not considering a settlement at every step in the process is a missed opportunity for litigation savings.
In most cases there is a point at which both sides will recognize the value in reaching settlement of the claim regardless of culpability. The decision to settle and the terms on which to settle can be tough choices. But good communication should lead to clear goals, and you may find that you are able to settle while still meeting your objectives, and saving the company time and money.
Hakemi & Ridgedale is a Vancouver law firm that advises clients in commercial disputes and regulatory proceedings, particularly in the areas of securities litigation; competition law; shareholder and partnership disputes; defamation law. More about their experience, and the firm at www.hakemiridgedale.com