In arbitrations, which are designed to control litigation costs, there can be more cooperation about identifying parties and documents relative to the specific claims.
Rubenstein, for example, has placed arbitration clauses in contracts where any party may demand arbitration before the American Arbitration Association and that must be completed within 90 days. “That way you don’t have protracted litigation,” says Rubenstein.
The work of limiting legal expense extends to how your attorney spends billed hours working on your case, including the possibility that expensive document review is farmed out to a lower-cost document review subcontractor.
Document review subcontractors perform work for less than the hundreds of dollars per hour that would be billed by a law firm associate or partner, with the documents sifted by recent law school graduates. Another way in which attorneys and judges hold down costs is to agree to search terms to be used in sifting through emails so that only relevant documents will be reviewed.
The battle against high legal costs has to be fought on several other fronts, too
And any legal strategy, attorneys and insurance agents say, should take settling before trial into consideration because costs of a trial can exceed damage awards in successful lawsuits.
Dan Knise, chief executive of insurance broker Ames & Gough, says it’s important to have a plan because a firm involved in ltigation could get to a discovery phase and spend $300,000 to $400,000 “when you could have settled for $250,000. You have to have a budget and a strategy because sometimes defense costs more than a settlement.”
Recession doesn’t necessarily tamp down on the number of lawsuits.
Claims against design professionals seem to be higher, says Knise, although he says his impression is based only on anecdotes.
One reason may be that on projects with cost overruns, owners in the poor economy don’t have access to capital as in prior years and are more likely to file a delay claim, says Mike Herlihy, senior vice president of Ames & Gough.
Knise and Herlihy’s impressions are born out by a recent litigation survey of 25 firms by the law firm Fulbright & Jaworski. That survey showed 42% of engineering/construction sector firms had been party to a lawsuit in the last year, up from just 15% in the year before, according Fulbright & Jaworksi.
Contract disputes, labor/employment and personal injury cases accounted for the greatest number of lawsuits, the survey showed.