Steps to Avoid Costly Litigation

Dec 8th 2009
Filed Under : industry

Steps to Avoid Costly Litigation

     Anyone who has been through the litigation process, whether you are an attorney or party, can attest to the fact that litigation is not an inexpensive process.  In fact, that is why in my practice as a litigator I see the vast majority of any lawsuit which crosses my desk settle.  Sure there are the occasional “stubborn” cases caused by unreasonable attorneys or irrational parties, but even taking those cases into consideration, the overwhelming majority of business litigation cases settle.  Why?  If it is not based upon the merits of your case or the other side’s case, the answer is the cost of litigation.  The cost of litigation, particularly discovery and dispositive motions, have become the driving force in settling cases.   I often hear from clients who had previous experience with the litigation process with other firms state that they were shocked at not only the cost of litigation, but the time it took to secure the end result, whether by settlement or trial.

     Our system of civil justice is founded on the notion that society benefits as a whole if courts or juries resolve disputes if people cannot settle a disagreement or claim among themselves. However, people frequently do not realize how time consuming and complex a legal claim can be and how long it may take to resolve a claim or a lawsuit.  To get to a resolution can cost a substantial amount of money.  While some costs may not be avoidable, it is possible to protect yourself before litigation and during the litigation process to maximize the value of the money you have to spend.

     Whether contracting in your business or personal life, you must make sure that you put your entire understanding in writing.  While it may not be possible to put every agreement you may have in writing, there are people and entities with whom you have important arrangements, or with whom more significant dollars are at stake, that mandate you put those agreements in writing.   A written contract need not be complex, but there are certain provisions that should always be contemplated and wrtitten carefully.

     Probably the most important of these protective provisions is the Attorneys’ Fees clause.  A Fees clause is a statement in your contract that provides you the ability to recoup your attorneys’ fees in a situation where the party you contracted with does not fulfill their obligations.  Many business owners are unaware of the rules governing the recovery of attorneys’ fees expended by them to enforce their rights.  Often, the only way for a party in a lawsuit to collect their attorneys’ fees is if such an award is provided for by statute or where the parties agree to such a provision in writing.

Another important protective provision is to provide for ADR.  Alternative Dispute Resolution (“ADR”) processes are alternative methods of helping people resolve legal problems before going to court.  ADR often involves an independent third person, called a “neutral” who tries to help resolve or narrow the areas of conflict.  The use of ADR early in a case can result in the more efficient, cost-effective resolution of disputes with greater satisfaction to the parties.  A great majority of the civil cases filed in Minnesota state courts are settled by using ADR.  Minnesota courts recognize the effectiveness of ADR as a tool for settling disputes, and in fact most Minnesota courts order ADR is some form.

     As your legal counsel we can not only help to create a solid contract or legal document that protects all of your company’s interest, but if litigation is inevitable we pride ourselves in providing upfront advice and counseling on the costs and the predicted path of the litigation.  We will also work with you to come up with the most effective and efficient strategy to maximize every dollar you and your business spends in either drafting your contracts or going through litigation.  By apply this approach to counseling our clients we can help take the surprise out of the process.

     If you have any questions, or would like to set up a free consultation, please call Jesse H. Kibort of Daniels & Wymore, PLLC at (763) 201-1215 or write him an e-mail at jkibort@dnwlawfirm.com.  The Twin Cities law firm of Daniels & Wymore, PLLC offers two locations for consultation at 1100 One Financial Plaza, 120 South Sixth Street, Minneapolis, Minnesota 55402, and 3165 Fernbrook Lane North, Plymouth, Minnesota 55447.  This article is a general discussion of certain legal matters and is not intended as legal advice.  Readers are encouraged to contact competent legal counsel if they have specific legal questions or concerns about their businesses.