Should I go to Court?

Table Of Contents

Lawsuits are sometimes necessary but take time, risk, money, lawyers, emotional highs, and sometimes-disappointing outcomes. Many factors need consideration when deciding whether to commence court proceedings or litigation, as it is often called. 

What are my choices?

The basic dispute resolution choices are:

  • Wait
  • Negotiate
  • Mediate
  • Litigate
  • Capitulate

Before adopting a wait and see approach, review if resolution will be easier later or sooner.

Negotiation is often relatively cheap and low risk. Test if discussion will be productive. 

Consider if an independent mediator would add value.

Do not rush to reach for the litigation tool. Be wary of costs, complexity, delay and risk.  Sometimes litigation is necessary to confront the dispute. Often you should only litigate after exhausting other options. 

Consider if an end to the dispute is what you need even if you abandon your position.

What do you hope to achieve?

Get clear from the outset what you hope to achieve.

Check the legal system can give you what you want to achieve.

Assess likely commercial and non-commercial consequences of the proceedings.

Court outcomes are based on legal entitlements, not just your wishes.

Consider both long-term and short-term goals.

Will important relationships suffer from a court case?

Know your Opponent

What does your opponent want?

Do they want to fight the case?

Do they have the money and time to do so?

Know yourself

What do you want?

Do you want to fight?

Do you have the money and time to do so?

Are you going to win? 

Assess your case.

Take a step back and appraise your situation calmly and objectively.

Get an independent review of your plans.

Review all the relevant facts and documents.

The best way to deal with the dispute will vary depending on the strength (or otherwise) of your position.

There are no guarantees of outcomes in litigation.

Neither the parties nor their lawyers can be certain of what will happen in court.

Sometimes, despite the best preparation of the case, you may lose. 

Litigation is a little like war and a little like gambling. There is risk. You cannot be sure of the outcome.

Like war, litigation is a fight and is often destructive, wasteful and expensive.

Like gambling, you do not start expecting to lose, but if you cannot afford to lose, can you afford to gamble.

How good is your evidence?

The result of a lawsuit is not necessarily determined by what is right, but rather by what can be proven.

Many cases are won and lost on the evidence.

Where the parties give different versions of events, often the result will turn on the supporting evidence that each side has kept. 

Detailed records and good paperwork make the case clearer than relying on recollections.

Is there a relevant agreement? Is it in writing? Does it cover this dispute?

Consider how a judge would view correspondence before you send it.

Matters of principle

Not everything is about money.

Solicitors are often told: “It is a matter of principle!”. 

Sometimes, from the outside, the “matters of principle” involve matters of revenge or ego.

Think with your head as well as your heart.

Whether for money or for principle, can you justify and afford the cost of the proceedings?

Will the costs exceed the benefit?

Will the court case fight for the principle that motivates you, or will the proceedings get caught up in other issues.

Is a court case the best way to fight for a matter of principle?

Will a court result satisfy you?

Talk or Fight?

Consider what is the best mode of negotiation for your needs, to deal with your opponent and your type of dispute, e.g., spoken or written, or both, direct or indirect, or both.

Use negotiations to test the best points and the weak points of your case and the case of the opposing party.

Consider whether the negotiations should be held on a ‘without prejudice’ basis. Negotiations held on a ‘without prejudice’ basis cannot be relied upon in any later court proceedings. Write the words ‘without prejudice’ at the top of correspondence, or say at the outset, a conversation is being held on a ‘without prejudice’ basis.

A demand by a solicitor’s letter may help focus the other side’s mind and show you mean business. A solicitor will also be able to advise you on whether to take your case to court or to try some other form of dispute resolution such as mediation.

Review Progress In Stages  

There is no formula or standard rules for negotiations on such settlements, but there are typical patterns. 

The typical opportunities for settlement are:

  • before the lawyers get involved
  • after the lawyers have exchanged initial letters
  • after the court documents have been lodged
  • at mediation
  • pre-trial
  • by court decision.

Each stage tends to raise an opportunity to settle.   Typically, the litigation ‘train’ has a number of ‘stations’ at which parties can get off by agreed resolution. Without them the train may need to go all the way to the end of the line. There is usually uncertainty of destination and the time, cost and heartache of getting there. The cost increase as the matter progresses. The uncertainty may decrease but some uncertainty will remain, right until the end of the line.    

Review and consider the strategic issues at each stage.

At each stage, take account of the extra expense likely to be required if that opportunity to settle is not taken. 

As you progress through each stage review the cost incurred in the dispute, make fresh estimates of the likely costs ahead and reassess the cost benefit analysis of alternatives to resolve the dispute.

Who pays the Costs?

The costs of a court case include the costs of the various parties in a lawsuit and the costs of the court itself.

Court cases can be expensive.

Financial costs are hard to estimate. The complexity of the case and the amount of money at stake, have a direct relationship to the final cost of the proceedings. 

The personalities involved may add to costs. The costs of matrimonial proceedings for instance are sometimes dramatically out of proportion to the complexity and amount involved because issues are so personal and emotions can get in the way of sensible resolutions.

In most matters, the losing side is ordered to pay the winning side some of the winner’s costs. This discourages court cases, particularly by a party with a weak case.

Usually, the winning party is not able to recover from the losing party the full amount of their own costs and has to pay the shortfall out of their own pocket. This is because the Court issues a schedule of allowable costs which is always less than the amount a lawyer will charge. Recovered costs will normally be around 50% of the costs incurred.

A party may prejudice their right to claim costs, for instance by unfair behavior or if the ultimate resolution is less favorable to them than an open settlement offer they have unreasonably rejected.

Sometimes the costs exceed the monetary worth of a case. A party may even win the case, but lose more in court costs than the amount in dispute.

How much does court cost?

The court charges different fees for different types of cases and different stages. These vary but are usually in the hundreds of dollars rather than thousands.

The costs of the lawyers is usually the largest part of the cost of the case.

Usually those costs will be time based. Your lawyer will give you details of their standard retainer information.

Because cases vary so much it is only possible to estimate likely costs in very broad ranges in a typical case.

Costs keep rising the longer the matter continues. If expert evidence or analysis is required, the costs can be significant depending on the nature and extent of the issues involved.

Break down likely costs into the various stages and review likely cost and as you make commitments as you pass through stages.

Costs Before Court Proceedings

If you quickly reach agreement before court proceedings are started, a typical lawyers bill for each party would be between $1000 and $10,000.

A settlement at this stage is often calculated by an all inclusive figure on the basis each party pays their own expenses.

Initial Court Proceedings Cost

Court proceedings may need to be started to force serious negotiation

Typically the first stage of the court proceedings would be for one party to issue formal court documents summarising their claim.  The other party then responds with a formal document summarising their answer. 

The parties may then need to lodge more details of the dispute with the court. 

The further costs to you for this stage, in addition to the figures already mentioned, might be between $3,000 to $10,000 if the matter is relatively straightforward but can be much more in more complex cases.  Costs are also usually higher in the Supreme Court than the Magistrates Court partly because the government filing fees are higher particularly for larger companies.

Pre-trail Conference Cost

The costs per party for a mediation or conciliation conference, might be between $4,000 to $10,000, in addition to the prior costs, but again can be much more in complex and difficult cases. 

Expenses such as expert witness fees and in some cases the fees of a barrister/ counsel blow out costs.

Hearing Cost

Most matters are resolved without a court hearing but a full court hearing is likely to cost more than $5,000, in addition to the prior costs, and could be measured in many tens of thousands of dollars depending on the length of the hearing, complexity and the types of expenses mentioned above.

Do I need a lawyer? Can I do it myself?

Ordinarily, if the other party has a specialist advocate representing them, you will be disadvantaged by your lack of experience and lack of expertise if you are not represented.

Regardless of experience and expertise, obtaining an independent detached view can be critical to make the best case and make the best decisions. Lawyers themselves have a truism: “the lawyer that acts for himself has a fool for a client”.

Parties to court proceedings are entitled, ordinarily, to be legally represented but are not bound to be legally represented.

The courts regulate the litigation process and litigants by tight regulation over who can represent parties in court.

Ordinarily only legal practitioners are entitled to charge for appearing in courts and tribunals as advocates. Some tribunals have special rules so they are more flexible, for instance planning bodies, sports and employment tribunals and tribunals dealing with low value claims.

For substantial matters, ordinarily, the cost of representation is a necessary expense.

Low value matters

Often where the value of the matter does not justify the cost of lawyers, parties need to consider whether they can go to Court without the protection of an advocate or representative.

The Magistrates Court has special rules to enable and facilitate dealing with what they call Minor Civil Claims quickly and cheaply.  

A Minor Civil Claim is:

  • Any dispute claiming $5,000 or less
  • A claim arising out of a Residential Tenancy or Lease Agreement
  • A claim to access neighbouring land.

Usually neither party may have a lawyer represent them in court for a Minor Civil Claim, unless the other side agrees.

See the website, for details of fees payable to the Court, the abbreviated procedure and the forms that are required to be used. Also on that website is some advice to parties acting for themselves to conduct minor matters.

Are there other costs?

Court hearings and giving evidence are stressful. Take account of the time and energy and the “emotional cost”. Do you want to fight? Do you want the stress?

The parties may give different versions of the same facts and the case might turn upon who is believed.  It is hard not to take personally attacks upon your credibility and your word.

Legal proceedings exact a time commitment. Self employed people have the double burden of time away from productive work and the cost of the proceedings.

Will my Reputation be Damaged?

Court proceedings may damage your reputation. 

Sometimes court proceedings make public issues you would prefer remain private. 

Alternatives to Court   

Most court proceedings get resolved by agreement before the actual hearing.

Consider exploring alternative dispute management methods such as:  

  • mediation
  • arbitration
  • expert determination
  • neutral evaluation.

Alternative dispute resolution can result in significant savings of time and money as some of the formalities required in court, such as the rules of evidence, may be dispensed with or relaxed.

What is Mediation?

Mediation is a dispute resolution process in which an independent person assists parties to negotiate to find their own solution. 

The participants meet in a confidential conference to cooperate in good faith to resolve the dispute by agreement, to their satisfaction and not necessarily in conformity with legal rights or other standards.

Compared to litigation, mediation as a process and as an experience may be more flexible, user-friendly, and informal, and also cheaper and quicker. 

Mediation can help the relationship between parties survive the dispute because it allows them to find their own solutions.

In the absence of a complete agreement, mediation can clarify and narrow only those issues remaining in dispute, to reduce the time and expense of litigation.

Mediation is increasingly a required step before court proceedings can be dealt with by a judge.

Often formal mediation or a conciliation conference is postponed until after court proceedings are lodged. Consider early mediation but make sure everyone does enough preparation to engage effectively in mediation.

Tierney Law has a guide on the Mediation Process.

What is Arbitration?

Arbitration is based on judgement by a private umpire rather than the court system. The arbitration process is similar to court proceedings. The final decision, known as an award, is final and binding, and enforceable through the courts.

Arbitration can be just as expensive as a court action, and sometimes more. Arbitration may not be cost effective in low value cases.

Arbitration needs to be based on some sort of consent to the process, so can only be used with the agreement of all parties.

The arbitration process may be more flexible than court proceedings.

Arbitration can be private and confidential, so can be ideal for the kind of commercial dispute that you don’t want in the public domain.

What is Expert Determination?

Expert Determination is a confidential and binding process which is agreed by the parties to the dispute, either in the documentation governing their relationship, or in a subsequent agreement. An appointed expert will reach a decision which will be binding on the parties, perhaps without an adversarial process similar to court proceedings.

Expert Determination may be:

  • confidential, carried out in private, and so can protect commercial confidences and sensitive subjects
  • fast and far less formal compared to other dispute resolution processes
  • flexible for multi-party disputes.

Expert determination is most suitable for technical disputes where the help of an expert is required. For example, the expert may be an engineer, IT consultant, or valuer.

Unless the parties have agreed in their terms of reference, the expert typically cannot award costs against another party, and the parties agree to meet their own costs and share of the fees of the expert.

What is Neutral Evaluation?

Neutral Evaluation is a non-binding assessment of the dispute from an independent expert, often from someone who has legal expertise and experience, such as a judge or a Senior Counsel.

A strong indicator of the likely outcome can clarify litigation plans of a party or perhaps both parties. 

What is your Plan? 

Plan your campaign.  

Think strategically:

  • What do I want?
  • How can I get it?
  • What are the best and worst case outcomes?
  • What are the chances and the risks?
  • What tactics would be best to achieve the outcome you want?
  • What methods do you want to use?

Form a view about where you are heading and how you are going to get there. Review the plan in stages and as you get more information.

Should I make an Offer to Settle?

Disputes are wasteful, stressful and uncertain by nature.

Settlements by accord:

Strategies and offers in response:

An offer to settle might:

Negotiation strategy will guide:

Matters of strategy are value judgements. Strategy can change at any time.

Deadlines are negotiating tools to keep the matter moving towards a resolution. Take your time to make the right choices and not be rushed.  

Consider if:

Should I Go to Court?

Disadvantages of resolution by the court include:

  • The cost
  • The escalation of the dispute
  • Court proceedings place the conduct of the matter in the hands of the court and to that extent, the parties themselves lose some control of the fate of the matter.

Advantages of court resolution include:

  • The court proceeding provides an independent answer
  • Some people cannot let go of the dispute without their “day in court”
  • Courts sets a structured process with deadlines to force a mater forward to a resolution  
  • Until court proceedings, sometimes parties waste time and energy with unproductive negotiation and delay
  • If the other party is reluctant or unreasonable, court intervention may be required to force a fair resolution, or at least force the other party to the negotiating table.

Should I Capitulate?

If you want to give up, is that because the fight is hard and you want an easy out? Is the road hard but still the correct one? Be careful a capitulation will actually give you a resolution. Might issues be left unresolved with a proper settlement?  Will you be able to accept the decision later? 

Strategic Choices.

Make a judgment call.  It is hard to make a call. You may need to back your gut.

Should you:

  • Wait – and see what happens to see if there is some strategic resolution that comes in response to changed circumstances.
  • Negotiate – talk direct to the parties to try to reach a shared view of entitlements and needs, not necessarily based on legal entitlement.
  • Mediate – advance such discussions with assistance of an independent party whether legal representatives or someone completely independent.
  • Litigate – rely on your entitlements, have those entitlements defined and enforced by the courts.

Capitulate– is the issue worth the fight.

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