Clients rail against botched litigation budgets

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  • With respect to Mr Chamberlain at Addleshaw Goddard and his ‘GC of a US oil business’ (see link in the "3-Dec-2013 8:20 am" comment above), no matter how complex the precision engineered valves are, the comparison between a valve and legal case is absurd and utterly unhelpful. Perhaps if, halfway through the manufacturing process the person buying the valve decided that he also needed the valve to convert the oil into cash and then it turned out the sea had inconveniently turned into lava rather than salt water, the comparison might make more sense. I doubt that the company would have been so successful at predicting their overall costs in that instance.

    I would suggest that a better comparison would be to look at the medical profession. We are spoiled in the UK in that we do not see the cost of our care up front, but consider if we did...

    A client going to a solicitor for a litigation matter can be much the same as a patient going to a doctor with a complaint. Imagine if the doctor had to give an accurate cost estimate for the treatment from start to finish. The doctor has an hour consultation with the patient to find out the history and then tries to estimate what it will cost. It could be anything; perhaps a simple headache, a degenerative disease, a tumour. The treatment and diagnostic options are numerous and the patient can make choices throughout. On top of that, something that the patient has not thought relevant could later prove crucial. Halfway through the investigations a different, underlying problem could rear up or the patient may contract another disease which complicates the issue. Is the doctor’s original cost provision likely to be accurate?

    I’ll not labour the point any further. I’m by no means saying that hourly rates are necessarily the best method, nor that the frequency with which quotes are excessively exceeded is acceptable. Solicitors should understand clients’ frustrations with open ended ‘non-estimates’ or overly marked down quotes to which they have no intention of sticking, however that has to be met mid-way by an understanding from clients that no matter how good your solicitor is, he/she is reliant on you, the information you provide, the competence of the person on the other side and courts functioning properly, not to mention a host of other factors. You can do your best for your client and still exceed a realistic estimate in an alarming number of matters.

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  • And how often are valid and fair costs estimates vastly overestimated?

    Effective analysis and proactive behaviour by the conducting solicitor causing the matter to settle months or years ahead of trial. While it is a long time since I was in practice I seem to recall that well over 90% of cases settle without trial. This is not a consequence of following the asinine "case management" process the courts now insist upon but a consequence of an experienced solicitor acting in his clients best interests.

    GC's and litigants in general tend not to crow to the press or world at large when they are saved a fortune. Litigation is difficult, expensive and unpredictable the level of expertise required to conduct big ticket work is very high indeed and the consequences for a modest error are often vast - the absurd decision in Andrew Mitchell's case being one small example but carrying the can for the whole sum in issue being far more serious.

    The paying parties (largely insurers) have funded the lobby groups and set the agenda on costs for far too long. Barristers who have made their fortune on legal aid advance into quasi political office and express outrage at the brief fees they once enjoyed.

    "Quick and dirty" litigation is as attractive as it sounds: it is not possible to be "quick and dirty" without also being negligent. Apparently this is fine because an already embattled profession can pick up the tab.

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  • Interesting discussion follows the article.

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  • How surprising that lawyers cannot estimate costs correctly, when they must have a whole treasure-trove of here's-one-I-did-earlier examples in their time and case management systems to refer to. I agree that most of these systems do not allow for time to be allocated by stage (though that is slowly changing), but it cannot be beyond even the wit of lawyers to mine their own data to extract at least the beginnings of an idea what a matter will cost to run. All that then needs to be done is for these assumptions to be tested throughout each litigation cycle for a virtual circle with a high level of predictive certainty to be achieved. Whether this is then delivered as traditional time-based or fixed-costs models is then subject to the prevailing fashion of the day.

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  • Sorry, I should have added that I recognise that non-standard litigation is not standard and that in those instances an earlier case is not comparable to a later case and so the costs of the former are not a reliable indicator of what the costs will be on the later. I realise that there may, for example, be more, or less, documents and witnesses on one than the other and that those documents and witnesses may not be comparable in nature.

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