Many businesses in India established subsidiaries in California’s Bio-Tech Valley and Silicon Valley. Indian companies often find California employment law pro-employees and confronted with employees’ lawsuits. One of the most common questions employer lawyers are asked is, “how much will it cost me to defend this lawsuit?” “It’s not surprising; the minute a California business owner is served with a civil lawsuit, their first thought will be how much it will cost. Lawsuits can run up huge bills, not only in compensation or settlements but in hourly lawyer’s fees too,” according to the employer lawyers at the firm California Business Lawyer & Corporate Lawyer, Inc.
Unfortunately, it is almost impossible to predict the cost of a lawsuit. Most employer lawyers cannot give you an accurate number because there are other parties that impact the time it takes. It is difficult to account for the amount of discovery there is to do, the evidence to evaluate, and how long settlement negotiations may take. Depending on the complexity of the case and how long it takes to resolve, a civil lawsuit could cost between $10,000 and $1 million to defend.
While we understand employers need to budget for their legal defense, the best we can do is give them a ballpark figure once we know the details of a case. Even that may not be accurate if the other side drags their feet or delays the process in any way. In this article, we will discuss some of the main factors that impact the cost of defending a civil lawsuit.
Factors That Determine the Cost of Defending a Employee Lawsuit
Unfortunately, with litigation, a number of external influences can affect how long the process lasts. Regardless of your litigator’s skill and work ethic, steps that should take hours can be dragged into days. Opposing counsels may take aggressive approaches and argue everything in a bid to make it preferable to settle on favorable terms.
An experienced employment lawyer will often create an “expected timeline” for the case once they know the details of the situation and the plaintiff’s legal representation. This will allow the client to make an approximate budget. The civil litigation attorney will then notify their client of when things may take longer or cost more than expected. The cost will be weighed into discussions of options so that the client can make an informed decision.
The two most common factors that will affect the cost of a civil lawsuit are:
- Opposing counsel – Often, once we know who the opposing counsel is, we will have a good indication of if the civil litigation can be resolved quickly or not. The more experienced the litigation team is, the more likely they are to seek a fair agreement in the quickest manner possible. Contrary to popular belief, most attorneys have an ethics code and don’t like to send small businesses under for the sake of a few thousand in compensation. Along with skill, we will look at the different strategies the litigators tend to employ; everyone has a way they like to do things. Some litigators take an aggressive approach; others try to resolve the case swiftly and to the benefit of their client. Remember, the plaintiff is paying legal fees, and their life is on hold while they deal with the lawsuit too.
- The opponent – the type and the means of your opponent(s) will affect how long the case will take. A class-action lawsuit can be extremely costly, but a single plaintiff who does not have deep pockets will not have the funds to drag out a lawsuit. Our litigation team will look at the opponent and their lawsuit history to see what their strategy may be.
It is important to be honest with your attorney about the case and your relationship with the plaintiff. No matter the opponent type or their legal counsel, if the matter is personal, the client may decide to take a “scorched earth” approach to the case. In that case, this lawsuit may become time-consuming and costly if your litigators do not take immediate action.
Litigation Estimates Are Not Always Accurate
The reason employer lawyers charge hourly rates is because they have no way of knowing how long the case will take to resolve until it is resolved. Even the most straightforward cases can take much longer or be much more costly than initially expected. We suggest our clients take estimates as a guide and be prepared to pay more than expected. The most important thing small businesses should look for when hiring defense for a civil lawsuit is an attorney who will keep them in the loop. That will be the best way to budget for legal defense and make decisions that fit their budget.