Lawsuits are typically disruptive and expensive. Business leaders often must divert valuable resources away from routine operations and need to mitigate financial and operational losses.
Therefore, if you are running a business, it’s critical to understand what makes litigation expensive and how you can reduce the costs.
Where Does the Money Go?
Depending on the complexity and expectations of a specific case, litigation costs will vary widely. Some of the most expensive aspects of litigation include:
That said, some of the most expensive parts of litigation include:
- Procedural expenses
- Retaining expert witnesses
- Taking depositions
- Settlement amounts
The more complex a case is, the more expensive it will be. For instance, there can be far more hours of discovery and a need for more expert witnesses in legal disputes involving highly technical information, such as a product liability or environmental lawsuit.
Can We Reduce the Cost of Litigation?
If your business is facing litigation, the cost of resolving the dispute can seem overwhelming. However, you still deserve a fair outcome.
And there are means of reducing the cost of litigation without jeopardizing the resolution.
- Investing in pre-dispute processes
- Opting for non-litigious options, like mediation or arbitration
- Responding quickly to requests
- Working with experienced legal counsel
- Preparing all pertinent paperwork
These efforts can make dispute resolution more efficient and effective.
Costly Mistakes to Avoid
Unfortunately, in the interest of saving money, some companies make mistakes that wind up costing them more money than they might have otherwise spent.
One of the most common mistakes is to navigate the legal process without skilled representation; attorneys have the resources and relationships needed to efficiently resolve legal matters, allowing them to navigate the process more quickly and efficiently.
Hiding information or refusing to comply with legal motions can also be an expensive misstep. Not only can this drag out the legal process, but it can also result in financial penalties against a non-compliant party.
Finally, agreeing to a settlement too quickly in the interest of reducing legal expenses can wind up costing you and your business far more than it would cost to consider your options and negotiate.
With this information and these tips in mind, businesses can resolve legal disputes in a more cost-efficient manner.