What Are the Real Costs of Trying Your Case?
“Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to them how the nominal winner is often a real loser — in fees, expenses, and waste of time. As a peacemaker, the lawyer has a superior opportunity of being a good man. There will still be business enough.”
— Abraham Lincoln, Notes for a Law Lecture, 1850
To try or not to try? That is the question. Lincoln teaches us that win or lose, litigation is expensive in more ways than one. And a mistake or miscalculation deciding to try rather than settle a case can be ruinous financially and cost you a client.
Nevertheless, some cases must be tried—a subject I’ll explore in a future piece.
In his excellent article, Early Intervention Mediation, Douglas McQuiston states, “Clients, and increasingly courts, are looking for results that are better, faster, and cheaper. The recently announced 2018 changes to CRCP 16.1 1 illustrate the judiciary’s ongoing desire to squeeze cost and delay out of the civil justice system. The goal today is to get to the point without breaking the bank.” *
Close to 90% of litigated cases settle. But empirical data on the remaining 10% that go to trial raises troubling issues about how lawyers and clients decide whether to go to trial, the quality of decision, and underlying motives.** In a 2008 DecisionSet study by Kiser, Asher, and McShane of 2,054 tried cases, the researchers found that plaintiffs got it wrong going to trial in 61% of cases, while defendants 24%. And what did the wrong decision cost the parties? Adjusted for inflation: $57,000 for plaintiffs and a whopping $1,344,500 for defendants. Miscalculations and mistakes deciding to try or not to try are expensive, much more so for defendants.
What does it cost your client to try a case? In 2012, 312 ABOTA members were surveyed “to develop a national baseline of litigation time and costs” for the six case types surveyed: automobile tort, premises liability, real property, employment, contract and malpractice.† Median times expended in litigation tasks, case initiation, discovery, settlement, pretrial, trial, and post-disposition were also developed.
The results of the survey revealed the following median costs of litigation by case type for defense firms of all sizes nationally, weighted somewhat for Florida, Texas and California: ‡
| Automobile-Tort: | $50,175 |
| Premises Liability: | $61,792 |
| Real Property: | $75,975 |
| Employment: | $100,532 |
| Contract: | $103,692 |
| Malpractice: | $139,828 |
As clients become increasingly sophisticated legal consumers, this data may be useful in helping you develop a reasonable litigation strategy and budget. It also provides a view towards participating in informed, good faith settlement negotiations or mediation, following discovery sufficient to value your position (based on strength of evidence, damages, local jury pool, and other salient factors).
*Douglas I. McQuiston, Early Intervention Mediation, Colorado Lawyer, November 2018
** Jonathan D. Glater, Study Finds Settling is Better Than Going to Trial, https://www.nytimes.com/2008/08/08/business/08law.html
† Paula Hannaford-Agor, Measuring the Cost of Civil Litigation, Findings from a Survey of Trial Lawyers, Voir Dire, Spring 2013.
‡ Id. 2012 survey data adjusted to present for inflation.