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08/03/08
“THE COSTS OF LITIGATION”
Filed under: General
Posted by: Jim Gray @ 4:55 pm

“THE COSTS OF LITIGATION”  (51)

At the conclusion of most of my jury trials I tell the jurors that our system of justice is probably the most expensive, time-consuming and unwieldy that has ever been devised - but it is also the best.  I also tell them that I hope they have received some gratification by contributing so substantially to it.  By the end of their service the jurors almost universally agree with my assessment, and even say they look forward to further jury service in the future - although that feeling probably wears off soon for many of them.

But litigation is expensive.  For openers, it costs $320 simply to file a civil lawsuit in California, and all defendants must also each pay a similar $320 appearance fee just for the privilege of appearing to defend themselves.  Of course the primary cost to the litigants is for their attorneys, who sell their time, experience, wisdom, and information-gathering abilities.  But there are also additional costs for paralegals, investigators, process servers, secretaries, electronic preparation and storage of documents and, of course, the “cottage industry” of expert witnesses.   

For personal injury cases many attorneys will often “front” the costs of the suit for the plaintiffs, and not charge them anything for their services unless and until there is a recovery from the defendants.  But when there is a recovery, the attorneys are reimbursed for their costs, and also receive anywhere from one-third to two-fifths of the proceeds.  The public benefit from this is that the contingency fees system allows good cases to be pursued by plaintiffs who otherwise could not afford to do so.

So when you hear about “large jury awards” in personal injury cases, remember that the litigation itself is expensive, and the risks of pursuing it can be large if not ruinous.  And also remember that the contingency fee system provides some safeguards, because attorneys are inherently inclined not to pursue cases that have no merit, since they can lose a great deal of time and money if they do.

I am also happy to report to you that within the last decade our court system as a whole has become much more pro-active in reducing expenses and heading off problems.  For example, we now assign most of our cases to a specific judge as soon as a case is filed.  That way the litigants get an earlier perception about what the eventual results might be based upon pre-trial rulings.  This also prevents a party from getting a second “bite at the apple” for the same losing arguments before a different judge.  That results in the cases moving more quickly toward a resolution.

In addition, and all importantly, the individual judges tend to work harder if the cases belong to them because their back log will build up if they don’t - and it is true that judges and staff members quietly note who has a higher or lower inventory of cases.  In other words, incentives matter in the courthouse as well as in the rest of the world.  As a result of this new approach, we now dispose of about 80 percent of all of our civil cases within 12 months of their being filed, as opposed to about 48 months under the prior system.

Other pro-active programs have been established to reduce future crime, such as screening out defendants charged with alcohol-related offenses who are addicted to alcohol.  Once these defendants are identified they are required to address and overcome their addiction problems, or they face additional punishments if they do not. 

Additional court screening attention and assistance are provided to juvenile offenders, defendants with mental disorders and dual diagnoses, people who are homeless, and parents who have neglected or mistreated their children.  Furthermore, both drug courts and the passage of Proposition 36 by California voters in November of 2000 have materially reduced the recidivism rates for people using illicit drugs by forcing them both to address their substance abuse problems and to be more responsible for their own actions.

As a direct result of all of these programs, many defendants have turned their lives around for the better.  Think of the crimes that are not committed, the victims who are not victimized, the police, prosecutors, defense attorneys, judges and jurors who do not have to investigate and litigate the offenses, and the reduced time and money that is wasted by the incarceration of the offenders.  Also think of the families that are not forced onto welfare roles because of the incarceration of their breadwinner. 

A final significant reduction in the expenses of litigation has been our programs of mediation.  These efforts have allowed the parties to “stop the bleeding” earlier by resolving their own problems through negotiation with the help of professional mediators.  Many years ago when I was still an attorney it was generally considered to be a sign of weakness even to discuss the possible settlement of a case.  But fortunately those days are now mostly behind us.

But the absolute best way of heading off problems and reducing the expenses of litigation is to avoid the litigation altogether by engaging in what I call “legal preventive maintenance.”  Along those lines, my all-time favorite bumper sticker is “Become a doctor and support a lawyer.”  Doctors are typically concerned about their patients, but they often are all too trusting and even na├»ve in their own business practices, and they mostly do not ask for help.

So I recommend people conduct inspections of their private and business property and look out for safety problems, and encourage their families and employees to be on the lookout for these problems as well.  I also recommend that people get a good legal preventive checkup of all of their business activities. 

“Saving” money by failing to get competent preventive legal advice is a classic way of being “penny wise and pound foolish.”  Why?  Because litigation is expensive, both financially and psychologically.  We in the court system are taking steps to reduce these expenses or avoid them altogether.  You should too.

James P. Gray is a judge of the Orange County Superior Court, the author of Wearing the Robe - the Art and Responsibilities of Judging in Today’s Courts (Square One Press, 2008), and can be contacted at JimPGray@sbcglobal.net or at his blog at JudgeJimGray.JudgeJimGray.com.

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