What Will Litigation Cost? Well, that depends…
The above is one of the most well-known responses to a potential client’s question and perhaps one of the most frustrating as well. Lawyers are prone to hedging their bets and often want to give a potential client an optimistic quote for their services. Clients, understandably, want to know what a matter is most likely to cost them and would like a range of costs depending on the difficulty of the matter.
Billing and Trust Accounts
Most litigation matters are billed on an hourly basis at a rate agreed to by the lawyer and client in the Retainer Agreement. The Retainer Agreement sets out the scope of work to be done and the hourly rate for that work.
A common feature of litigation is the idea that clients should be paying in advance. If this seems at odds with the idea of paying for work done, it isn’t! Lawyers and law firms have bank accounts, commonly called trust accounts, where they can hold money that technically belongs to their client but may become due to the lawyer or a third party, say for work done on a matter or to pay a mediator’s fee.
What follows is an estimate, in hours, of how much time a lawyer may need to spend dealing with a normal litigation matter [1].
Stage One – Pleadings
Most cases will unofficially begin with an exchange of a Demand Letter and a Response Letter, which can require up to 5 hours for each party’s lawyer. The practical purpose of the letter is that it may resolve the issue entirely, saving the client all the hours that would be spent drafting a Statement or proceeding through litigation. The strategic purpose is that the Letters may be needed later as leverage or proof of state of mind.
A case officially begins when a Statement of Claim is issued and then a Statement of Defense is filed. To draft either of these documents, the lawyer for each party will need to review their client’s documents and then craft a narrative demonstrating why their client should be successful. It is very common for a lawyer to spend up to 10 hours drafting one or the other court document, which lawyers call a “pleading”.
Stage Two – Exchange of Documents
After the Statements are filed and served, each party has to exchange an Affidavit of Documents. This is a record of all the documentary evidence related to the matter held by each party. These documents can be extensive and require the lawyer to review their client’s documents before sharing them and then to review the other side’s documents as well. Proper review of the documentary record can easily take several hours, especially in a complex and document-heavy case.
The kinds of documents to be reviewed and shared if relevant include: contracts, purchase orders, invoices, quotes, estimates, policy manuals, memoranda, letters, faxes, text messages, emails, photos, videos, and other documents.
The lawyer must help the client produce whatever documents the client has within her power, possession and control. This means that if there are relevant documents, the lawyer must help the client identify what he or she should look for and consider whether some of these documents are in the possession of third parties. If so, there should be consideration to accessing these documents if they are within the control of the client. One obvious example is medical records.
In your typical case, it is not uncommon for the lawyer to spend around 20 hours working with his or her client to complete the documentary disclosure phase of the case.
The above steps are typically completed in the first twelve months of litigation but every case seems to have its own pace. Accordingly, in the first year, a client might see their lawyer spend around 35 hours on their matter (ie. to draft their pleading and complete their documentary disclosure obligations). In addition to this, the lawyer will likely spend several hours on phone calls, video calls or email communications with the client and opposing counsel, meaning the total time spent may be upwards of 45 hours through these phases of the case.
Stage Three – Examinations for Discovery
The intensity of the case will ramp up significantly in this stage, as will the cost. By this point, both sides will have a very good picture of the factual and legal issues, as well as the documents that will likely be presented into evidence at any future trial. Now, the parties, through their lawyers, will have the chance to ask each other questions under oath, about the matters in issue so that their evidence can be known and “locked down” well before trial. This phase of the case is called “Examinations for Discovery”.
Since COVID-19, these examinations are mainly conducted remotely through Zoom. Your lawyer will spend time preparing you for giving your discovery evidence and will plan his or her questions for the other side. Normally, each party is allowed one day to ask questions of the other side unless the case is proceeding under what is called, the Simplified Procedure. In this latter procedure, each side only has two hours to ask their questions.
Assuming the case is ordinary procedure, it is not uncommon for a lawyer to spend about 25 hours on this phase of the case, when factoring in preparations and attendances at two days of examinations for discovery.
In the course of the examinations, there may be disputes that arise. For example, questions may be asked that the other side considers irrelevant to the issues that the court must decide, or that seek privileged or confidential information. Other times, the questions may be very onerous to answer or harshly disproportionate compared to the issues to be decided in the case. These disputes will end up before a Judge by way of motion to settle. This can cause delay and further expense.
Even where there are no such disputes, it is very common in the examinations for discovery for parties to be asked questions that they are unable to answer on the spot. They may need further review and investigation. There may be a need to access additional relevant records and documents in order to answer the question(s). These are what lawyers call, “undertakings”. Answering undertakings will take time as the lawyer will work with his client to list the matters undertaken and to prepare the client’s answers to his or her undertakings. Similarly, the lawyer will need to work with opposing counsel to secure the answers to undertakings given by the opposing party in the course of his or her examination for discovery.
Assuming there are undertakings and assuming there is a motion to settle disputes about questions that were objected to, it is not unreasonable to expect your lawyer to spend 45 hours or more on this phase of the case.
Stage 4 – Mediation and Pre Trial Conference
Often, in the third year of any given case, there are two major steps to plan for: mediation and the pre-trial conference. Certain courts of Ontario require mediation of each case, but mediation is good for nearly every case. Mediation allows the Plaintiff and Defendant to see how a neutral third party with legal expertise will view their case. The process of choosing a mediator and getting an agreeable time slot usually takes no more than 3 hours and a fee of $5,000-$10,000 depending on the mediator. Then the lawyers have to draft a mediation brief, which takes 10 hours on average, and review the opposing side’s brief, an additional 3 hours. Attending a mediation can take up to 8 hours per session. Mediation, therefore, can take 24 hours to complete.
If the parties reach a settlement, drafting the settlement documents and finalizing the court forms usually takes no more than 5 hours.
If no settlement is reached at the mediation stage, the next step is a pre-trial conference. This conference is with an actual judge and requires at least 4 hours of time in attendance and 12 hours of preparation. This is the last chance to settle before a formal trial, and the lawyers and parties must be ready to present all of their arguments and positions as if it was trial itself.
Assuming the case proceeds through both steps, the time spent by your lawyer can be around 45 hours.
Stage 5 – The Trial Stage
The vast majority of cases settle before getting to this stage because the litigation process is expensive, time consuming, stressful and because the outcome in most cases is very hard to predict with any precision, especially if there are factual issues that must be decided based on the court’s assessment of the credibility of witnesses.
When setting a trial, the lawyers will be tasked by the Court with estimating the trial time required in a reasonably accurate manner. The time in trial most days is about 4 to 5 hours when you factor that court begins at 10 am and ends around 4:30 pm to 5 p.m. In between there will be a lunch break and at least a couple of recesses for staff. There may be other recesses to deal with witness timing issues or technical glitches.
At any rate, a good rule of thumb is that your lawyer will need about three to four times the amount of time in trial to prepare for the trial. So assuming the trial will take three days to complete (opening statements, evidence and closing statements), your lawyer will need three or four times of this trial time to prepare (i.e. 4 x 15 in trial hours = 60 hours to prepare and conduct 3 day trial).
[1] For the purposes of this article, a normal litigation matter has only one plaintiff (person suing) and one defendant (person being sued) and no more than three (3) causes of action. As a case involves more plaintiffs or defendants or additional causes of action, the costs will increase.In Summary
With expertise, a sharp sense of how to push litigation forward efficiently, and a team of experienced lawyers and staff behind them, a good lawyer can help their clients achieve their litigation goals and do so in less time than average. At Hummingbird Lawyers, we bring such skills and individuals to each case and keep in mind not only the legal strengths and weaknesses of each case but also the financial and temporal realities and practicalities to help our clients find their success. For any questions or to arrange a private and confidential consultation, please contact Ian Donovan, Associate for the Firm’s Civil Litigation Department at 905-731-1911 ext. 203, idonovan@hummingbirdlaw.com or complete the form below.
