Now that I have your attention can I afford to keep it?

In 1995¹ the average three day Queens Bench Civil Trial in Ontario took 191 hours over a 3-year period to prepare and present to the Court. At an hourly fee of $200 this would mean that each side would generate a legal bill of $38,200. The financial costs (as distinguished from the emotional costs) of the three-day trial would be $76,400 not including the costs of the government run civil justice institutions paid for from the general tax base. If we exclude the 3-day trial time of 30 hours, we still have a cost of $32,200 each (for a total of $64,400) to prepare the case for presentation at trial.² And let's not even talk about what are the costs if there is an appeal! There has to be a better way of resolving a majority of disagreements. 

So what is it that causes the legal bill to be so high? In this article we will explore this question and how to keep legal costs under control when litigation is the chosen avenue for dispute resolution. We will also find out why litigation is neither cost effective nor efficient for a solving a majority of disputes. 

There are defined stages to each dispute that follows the litigation route: 

1. Choosing a lawyer 

Your lawyer must be someone you can respect and trust. He or she will know intimate, sometimes even sensitive or potentially embarrassing, facts about you and your personal affairs. With the rising costs of litigation, your chosen lawyer should also be knowledgeable about (and open to using) mediation, arbitration or other alternatives to the formal court process. This knowledge is essential if you are to find any resolution and peace of mind because only by knowing all the relevant facts, law and options can you (as the person most directly affected by the result) make decisions about how best to resolve the dispute. The expert about the acceptable solutions is you . That is why you, and not a Judge, are the most appropriate person to find the solution unless you are looking to define or interpret the law in a new or novel way.  

 

2. Interviews, information gathering and research - 10 hours³ 

You need to communicate all the facts, whether good or bad, to your lawyer. Most non-criminal problems evolve over days, weeks, months or even years. Your lawyer's task is to condense and acquire that knowledge in only a few hours, analyze the facts to define the legal principles that come into play and research the present law to form an opinion as to how it impacts your situation. Every case is "fact specific" - even though legal principles may be universal their application will vary, and change, based on the specific facts of your case.  

 

3. Draft the Statement of Claim / Statement of Defense - 5 hours  

You now need to summarize the facts into a legal document. The Plaintiff files a Statement of Claim, and the Defendant files a Statement of Defense. 

The purpose of the Statement of Claim is to outline for the Defendant(s) and the Court the legal principles on which you base your claim, the allegations that support those claims and the remedy you are asking the Court to award in your favour. This is not the place to outline the overwhelming amounts of evidence that make you right and the Defendant(s) wrong - this is not the stage where you should be expecting to win your case. 

The Purpose of the Statement of Defense is to outline for the Court, and the Plaintiff, why the Defendant should not be held responsible for the wrongs claimed in the Statement of Claim. Again, this is not the stage where you should be expecting to overpower or defeat the Plaintiff's claim. The Statement of Defense outlines the legal principles and counter allegations that support your refusal to accept responsibility for the Plaintiff's claims against you. 

 

4. Prepare and Finalize an Affidavit of Records - 10 hours  

Contrary to the television depictions litigation is not intended as a process of surprise and hoodwinking the opposition. The first stage of this is disclosure of all documents (called records) that are connected with the facts of the case. There are some documents that are not shown to the other side. These include legal opinions given to the clients by the lawyer as well as records created by the client to communicate facts to the lawyer. One of the tasks the lawyer will undertake is to read each document and categorize them as "producible" or "privileged". Only the producible documents are shared with the other party. Records may be printed, handwritten, in electronic form, photographs or any other mode of information storage. It is important that you forward all the documents / records to your lawyer. If there are any that you know exist but do not presently have let your lawyer know about those as well. Once all documents / records have been given to your lawyer it is up to him or her to decide into which category each record belongs.  

 

5. Interlocutory motions - 15 hours

There are times when disagreements about the court process itself cannot be solved by discussion between the lawyers. When this happens the lawyers ask the court to decide what should happen. The referrals to a Judge take time to prepare and present - adding to the costs to you.. 

 

6. Examinations on Affidavits - 40 hours 

There are usually two types of affidavits filed in a law suit:

1. Affidavits that support an interlocutory motion 

An affidavit contains statements made under oath stating the facts one party claims entitles them to their requested outcome. The other party is entitled to question under oath the maker of an affidavit on the information sworn to in that affidavit. The average interlocutory motion is allocated less than 15 minutes of the Judges time to be heard and decided upon, but its effect can last the entire duration of the litigation.

2. Affidavits of Records 

Each party is entitled to question the other party on the facts that support their Statement of Claim or Statement of Defense respectively. They are also entitled to question the other party on the records listed in the Affidavit of Records. The expectation is that by having questions answered each party will be in a better position to evaluate their own case and the chances of success for themselves and the opposite party. 

 

7. Pre-trial motions , notices and hearings - 15 hours 

Before a matter is scheduled for Trial it is not unusual for the lawyers (sometimes accompanied by their clients) to meet with a Judge to (a) decide how long the trial will be scheduled for, (b) if there are any facts that can be agreed and (c) an attempt by the Judge to discuss resolving the dispute before trial. Each party has now invested over 90 hours at a combined cost approaching $45,000 - resources which could have been used to discuss solutions (in mediation) rather than emphasizing differences and disagreements (in litigation). 

 

8. Trial Preparation - 30 hours

No acceptable solution has been found. It is now time for your lawyer to sift through all the evidence, facts and witness statements to decide how best to present your case. The lawyers task is to take all the available information and decide what it is necessary to present to the court, how to present it, when to present it and how to minimize the other side's ability to contradict or pick holes in the evidence presented. 

 

9. Trial - 30 hours 

In essence the lawyers task is similar to that of a story teller. By presenting the Court with a story line through the use of documents or records and live witnesses your lawyer's task is to convince the Court that your version of the facts is the most believable and that the Court should interpret the law and past precedent in your favor. Rare is the case where lawyers can not interpret or find cases that support their "storyline". It is not unknown for the same case to be presented by both sides in support of their interpretation of the applicable law and facts.  

When the trial is over there is also the issue of court costs awarded to a "successful" party. Even though they rarely cover the real costs incurred in litigation, court costs can still be substantial depending on the amount of damages stated in the Statement of Claim. 

 

10. Appeals

It ain't over until it's over. When is enough, enough? Did the fat lady sing or was she just warming up for Act II? 

It is in the nature (if not the definition) of litigation that one side wins and the other loses - a zero sum game. Depending on the magnitude and level of Court decision appealed from you may have your appeal heard by the Alberta Court of Appeal and, if the further Appeal is accepted, the Supreme Court of Canada.⁴  

Appeals are a highly technical procedure and can take many more hours of time and effort to complete. In addition the decision of the Judge is a public document - anyone can access the text of the decision. In some cases a judgement may substantially reduce the value of shares in a Corporation, effect credit ratings or may bankrupt the losing party.  

The study also allocated a further 36 hours for miscellaneous letter, telephone calls and report over the three year period. Also, you will need to add additional time and money for collection of the judgement amount itself from the other party. 

Top

So, what can you do to control legal costs? 

• If you are going to travel the litigation route make sure that it is a logical rather than an emotional decision. 
    

• Frequently one party will try to ignore an offer to discuss the disagreement and will refuse to discuss the matter. You are now forced to file a law suit against them. Once you get the other side's attention by serving the Statement of Claim make efforts to negotiate or mediate a solution for yourselves.
   

• Use your lawyer as a resource, not a mouth piece, to advise you about the possible solutions.  
   

• Communication is important. Arrange for update sessions and come prepared with questions, remembering that the clock starts ticking with each phone call, meeting or conversation.  
   

• Consider sending your questions to your lawyer in writing rather than asking them during a conversation. Firstly, most people read faster than they can understand the spoken word. And secondly, it will give your lawyer the opportunity to think about the question and give you a considered response.
   

• Pay the legal bills on time. Although this may seem like an odd observation, remember your lawyer is human. Having to stop work on your file because a retainer has not been paid or replenished adds time that your lawyer must spend to re-familiarize him or her self with your case. Bad debts and late payments also add to the hourly rate when increased costs need to factored into the fees charged. 
   

• Make sure all the records are sent to your lawyer on schedule - each reminder letter or phone call adds to the total costs. 

The best way to avoid high legal costs is to avoid unnecessary litigation. Always keep the lines of communication open and remember that every dispute has a solution - but it might not be the one you want if you let someone else decide for you.

Top

¹ Civil Justice Review Ontario Court of Justice and Ministry of the Attorney General, March 1995 at page 144.

² A more recent study contained in Mediating Commercial Disputes by Allan J. Stitt quotes the cost of the typical commercial law suit to be between $50,000 - $100,000.00 each side.

³ The times indicated represent the amount of lawyer time allocated to each stage. The time required for you situation and circumstances may differ.

⁴ A Provincial Court decision - also referred to by some people as a Small Claims Court decision - has three levels of appeal as the Court of Queens Bench hears a Provincial Court Appeal.

Litigation main page