The Real Cost of Going to Court
What is the alternative to a successful mediation and negotiated settlement of your dispute? Let's take a close look ...
GETTING STARTED: Your first task is to find an attorney who will take your case. You check with your friends, perhaps consult with the local bar association, and get a few referrals. You call several offices, and find an attorney who will meet with you. Interviews with attorneys usually cost a one hour consultation fee, ranging from $100 to $500 depending on the specialty and seniority/experience of the lawyer. Maybe the first attorney you consult will take your case, maybe it will require more than one consultation to find someone to represent you. The cost just to find an attorney will be in the range of $250-$500.
FEE AGREEMENTS and INITIAL FEES: Maybe your new attorney will ask you for a retainer fee of up to $5,000, or maybe the lawyer will bill you as you go. That will depend on the terms of retention that you both agree to. Expect the hourly fee for your lawyer to be about $150 per hour, which is at the lower end of average attorney's fees. Your new attorney will review your file for at least one hour or more depending on the number of documents and complexity of the facts. He or she will set up a file and perform some legal research regarding the applicable law and causes of action, and will probably write a letter or two to your opponent. The lawyer will then prepare, file and serve a complaint informing the court and your opponent of your claims. That initial effort will probably consume 7-10 hours, and will cost you roughly $1,250.00. The fee to file a civil complaint in the Superior Courts of California is $350.00. Your complaint must be served on your opponent(s), costing you about $100 per service. You've racked up at least $2,000.00 in fees and costs, and you've just begun!
DISCOVERY AND LITIGATION COSTS: After your opponent answers the complaint, the formal exchange of evidence called "discovery" begins. Discovery includes written questions, demands for production of documents and oral examination of witnesses under oath. Preparation of written discovery and responses to discovery will require 5 to 10 hours of attorney time. Depositions require a minimum of 2 hours of attorney time, one hour to prepare and another hour to conduct the oral examination, and you will foot the bill for the court reporter to record and transcribe the session. Discovery will cost you a minimum of $3,500.00, and perhaps as much as 10 times that amount if the other side does not cooperate or if there are many witnesses. Call the estimated cost of discovery $15,000.00.
RESOLUTION OF YOUR LAWSUIT: If your jurisdiction orders your case to an early resolution effort, your lawyer will spend at least 10 hours in preparation for, and attendance at, that proceeding, for another $1,500.00. You are not to trial yet, but you've spent at least $20,000.00. If the early resolution effort is unsuccessful, you will incur costs for your lawyer to locate and hire expert witnesses for trial, costing at least $1,500 per expert to retain and prepare for testimony. Trials range in length depending on their complexity, but the low average for a civil dispute entailing presentation of evidence from both lay and expert witnesses is 5 days of court time. Add two days for selection and instruction of the jury, and add jury fees and costs for the court reporter to prepare trial testimony transcripts. Expect the cost of trial to be at least $2,000 per day in fees and costs, and add to that cost at least 40 hours of attorney time to prepare for trial, easily totaling more than $20,000.00. So, one year later, you've paid $40,000 whether you win or lose at trial. And you might be on the hook for the other side's attorney fees, based on the nature of the claims or cross-claims. And you might get hit for the other side's witness fees because you rejected your opponent's offer of early settlement.
WINNING IS NOT WHAT IT APPEARS TO BE: Even if you obtain judgment in your favor at trial, the other side could file an appeal, or if you lose at trial you might appeal, incurring another $10,000 in attorney fees and costs. Now how does an alternative resolution option look? Compare the description of the cost of a typical lawsuit to this: You and your opponent agree to obtain a referral to a mediator. (Free!) -The mediator coordinates a time for the proceeding. (You pay half of the set up costs, generally less than $2000) -The parties appear and participate in mediation of the dispute. (You pay half of the mediator's hourly fee) - The matter is settled and resolved and you move on with life. (Priceless!)