When you are trying to settle a lawsuit, don’t lose sight of the elephant in the room.


Its not easy to find or part with the money often needed settle a lawsuit or dispute.   You might think that your toughest negotiations will be with the opposing party.  However, there is often an even larger stakeholder in the dispute; someone on your own side; someone who will likely have to be paid first from whatever proceeds are generated upon resolution of the lawsuit; someone who you might have already agreed to pay more to fight this dispute than you could ever reasonably expect to recover in court.

The American rule of damages

If you are not careful, the biggest damage and expense that you will incur as a result of a conflict or dispute will be unrecoverable attorney fees.  The American rule of damages provides that each party to a lawsuit is responsible for paying their own attorney’s fees, unless there is a specific statute or contract that allows the assessment of those fees against the other party.  In other words, when it comes to litigation, everyone is usually left to pay their own legal bill.   In the United States, the average cost (bill) to try a civil lawsuit is between $43,000 and $122,000.  The single most time intensive (expensive) parts of litigation are the trial and discovery (taking depositions, etc.).    Why does it cost so much? …because everything is a fight.  There are faster, less expensive secure ways to cut to the chase and get the bottom of things without relying so heavily on litigation.

That’s your elephant, not mine.

Its plain to see that resolving disputes can be an expensive proposition, especially if you want a lawyer and the court system to try to resolve your disputes for you. More people need to think twice before racing to court to determine just how much good money to invest on a bad agreement or relationship.  Considering the backlog of cases that continue to flood into the court system, a lot of people must be convinced that litigation is still the best place to start.   However, sooner or later, almost all of them will learn the hard way that less than 5% of all lawsuits actually get to trial. Most lawsuits are dismissed and left to be settled out of court. Every day frustrated people leave the legal system without a trial, without a resolution and now deeper in debt to their own attorney.  If and when these people do finally decide to sit down and try to negotiate a settlement out of court, they will have a tough time trying to persuade the other party to pay more or accept less simply because they chose to spent a lot of money on unrecoverable attorney fees.  That’s your elephant not mine.

Due process or do more yourself ?

I don’t think so many people would sue or choose to remain in a lawsuit so long if they understood that it would cost more to sue than they could legally expect to recover in the end.   However, if its too expensive to sue or be sued,  does that mean that a lot of people with legal problems to resolve are then effectively left without a legal remedy?   No, this is simply a clear indication that litigation is the wrong place to start.  The legal system provides many other less expensive (and lesser known) processes to resolve disputes outside the courtroom.   Its time more people gave these other legal processes their due first.  Mediation is a legal process designed to resolve disputes privately rather than before a judge or jury. Mediation can be completed for a fraction of the time and cost of litigation. On average, more than 75% of disputes that were mediated were resolved at mediation.   So, when you are sued or you sue someone else, don’t lose sight of the elephants in the room. Take a little more control over your situation and try mediation sooner vs later.

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