How to Reduce Your Litigation Costs
It is never a happy circumstance when a business gets involved in a lawsuit. As most business owners know, even when they have a strong case, litigation will likely be expensive, time-consuming, stressful and uncertain. But it is important to understand that by creating and preserving evidence for your business litigation attorney, you can greatly improve your chances of success and reduce your litigation costs.
- Document Everything
Anyone who has watched “Judge Judy”, or “The People’s Court” on television knows how important it is to have records to support your version of the facts. Most successful businesses have good record-keeping procedures, and this can prove invaluable if disputes arise. Regardless of what procedures may be in place, when disputes arise, it is especially important to keep records and document everything. If, for example, a customer threatens a lawsuit, the threat should be memorialized in writing, perhaps in an email to the client. When litigation seems likely, and the stakes are significant, you should consult a business litigation lawyer at an early stage of the dispute. At the same time, if it is a significant matter, every employee who has knowledge of the situation should prepare a written summary, perhaps signing an affidavit or declaration under oath, to preserve their recollection of facts and to help your lawyer prepare and prove your case.
- Establish Clear Protocols for Electronic Communications
One of the most expensive aspects of most lawsuits, and especially business lawsuits, is the lengthy pre-trial process known as “discovery”, whereby the parties can compel the production of all sorts of evidence, under oath, from opposing parties and witnesses, including all sorts of written and electronic documentation. In recent years the cost of discovery has exploded, largely because of the increasing use of all manner of electronic media, including emails, texting, twitter, facebook, instagram, etc. Such discovery commonly requires the hiring of computer experts to collect electronic records, a time-consuming and expensive endeavor. If a businesses’ employees have used all sorts of different media in communications with a customer, for example, then it is likely, in the event of a lawsuit by or against the customer, that the customer will be able to force production of copies of all such electronic media, causing the business to incur higher litigation costs.
Businesses can limit the cost of electronic discovery by establishing clear protocols and procedures for limiting the use of electronic media to particular accounts. For example, if a business establishes and follows a clear protocol to communicate with customers using only one or two specified company email accounts, as opposed to multiple private and business email accounts, text messages, etc., then it will be much more likely that discovery will be limited to the specified email accounts. This can result in thousands of dollars or more in cost-savings to the business should a dispute arise, not only in expert costs, but also in attorney’s fees as well as the value of the businesses’ employee time in collecting such data.
- Get Legal Advice From an Experienced Business Litigation Lawyer Early
Keeping good records won’t win your case if the records establish that your business conduct was unlawful, or that your business breached a contract. This does not mean your business should not keep records. It does mean, however, that you should seek legal advice early to determine what options may be available to you, particularly if there is significant money involved or if the situation has already become contentious. An experienced business litigation attorney can often provide insights you, as a business owner, haven’t considered. In law, as in life, “an ounce of prevention is worth a pound of cure.”
If it is too late to avoid litigation, the earlier you involve a business litigation attorney, the better he or she can help you prepare for litigation. The attorney can work with you in a number of ways, including helping you mitigate damages, organize evidence (such as the employee fact summaries referred to earlier), anticipate discovery issues and the opposing parties’ legal arguments, and limit future discovery expense, or perhaps steer the matter to mediation or early settlement.
Litigation is not complicated in concept. It is simply a process of gathering and presenting evidence to prove facts and contentions in light of relevant laws. But like most things, the devil is in the details. The more you can help your business litigation lawyer manage those details, by creating and preserving evidence, and involving him or her early in the process to help you in that effort, the more likely you are to obtain a good result in a lawsuit or negotiate a reasonable early settlement, which helps reduce litigation costs. For more information about our San Diego and Orange County based business litigation attorneys, click here.
Want more information about the discovery process? Here are links to excerpts of the California Code of Civil Procedure and self-help information from the state’s judicial branch: