The Three Best Ways to Stay Out of Court
Foreclosures, criminals and divorces combined with chronic understaffing have clogged the courts. If you have not been involved in a lawsuit in the past ten years or so, you should count your blessings. In my opinion, because many states are functionally insolvent, they have understaffed and underfunded their courts. The brave few who have agreed to serve as judges face large dockets with diminished resources. The unfortunate few who need the aid of the state courts have to compete with the many forces shaping the legal system to have their case heard.
Once a person finds themselves in court, it is often very difficult to get out without expending more money than the dispute is worth. Legal fees for even a simple case can quickly run into the tens of thousands of dollars. Petitions to the court, called motions, can drag on for months as the courts struggle to keep up with the paperwork associated with such arguments. It is common for the party that does not want to pay what is due to drag the process out as long as possible and then use the delay as a bargaining chip to pay far less or demand more than is equitable.
I advise every client that a case can take 12 to 18 months to get through the courts. On top of that, an appeal can easily drag a case out for another two years. If the case then goes to the state supreme court, it might take another 6 to 18 months to get a final judgment. In the worst case scenario, a case can then be remanded to the trial court for further proceedings and it starts all over. It is not uncommon for a case to take four to six years to reach a conclusion. During that time, you have to pay your attorneys tens of thousands of dollars to keep your case on the move.
I share this sobering reality because I strongly recommend that you make every effort to avoid state court as a means to resolve a dispute. Instead, I recommend these three alternatives:
- Limit involvement of legal counsel.
- Choose binding arbitration.
- Try pre-suit mediation.
Limit the involvement of legal counsel. For a practicing trial attorney, this is tough advice to offer. But, the truth is that disputes under $25,000 or so should be negotiated with limited involvement by attorneys. Net of legal fees, a compromise in a one-on-one negotiation is often the best solution. A good idea in this situation would be to consult with your attorney, but not have your attorney directly involved. There may be something very important about your situation that you do not understand. Buy an hour of your attorney’s time and make sure you understand what type of dispute you have. As well, legal counsel can draft an agreement that will fully release whatever claims exist so both parties can put the matter permanently behind them.
Choose binding arbitration. Arbitration is faster. Even more complex disputes can be resolved in months instead of years. It is very hard to appeal an adverse arbitration award, so when it is over, it is usually over. As well, you can use the courts to enforce any judgment you receive in arbitration. Arbitration is more streamlined than state court proceedings. You do have to pay an arbitrator to act as your private judge, but in most situations it will likely save money. As well, since you can pick your own private judge, you can find someone with particular skill in a given area. You hire a construction professional for a construction dispute, etc. Ask your attorney to help you include a binding arbitration provision into contracts you sign.
Try pre-suit mediation. Let’s assume a circumstance where you have tried to negotiate a resolution with the opposing party, but failed. Assume as well that your agreement does not require arbitration. This means you are headed to state court. At this point, it is almost always a good idea to hire a professional mediator to attempt a resolution before going into state court. Your attorney can help you through this process and make it more effective. The mediation process creates strong momentum for settlement and can overcome obstacles that may have blocked the success of direct negotiations.
A smart business should always try to avoid state court. But, if your effort to be nice and resolve the problems through negotiation fails, then I recommend that you hire a real trial attorney and do battle!
Todd V. McMurtry is a Member at Hemmer DeFrank Wessels, PLLC. He is a commercial trial attorney and Harvard trained mediator. Todd has been married to his wife, Maria C. Garriga, for 28 years. They have three adult children.