Lawyers frequently lament how clients show a profound aversion to the “L” word. This is because litigation is an exercise that is extremely costly. For a common case a hearing will take 58 weeks from the time it was filed to take place.
Expenditures start to pile up as soon as a claim is accepted and legal advice is sought. According to a conservative think tank, the Centre for Policy Studies, partners at top City law firms charge clients for their services more than £ 1,000 an hour, a amount that can grow to £ 5,000. Such exponential rates are shrouded in mystery due to a lack of clarity about their accrual, enabling top firms to monitor their prices electronically.
“Those trying to comply with UK legal proceedings are required to pay extraordinarily high costs to do so–high enough to limit access to law, particularly for small business clients for whom bills can be prohibitive,” notes the CPS report.
Consequently, obtaining advice through high street companies, while comparatively lower in cost, carries a significantly higher burden as clients appear to be individuals rather than large multinationals.
Hourly prices levied by a highly competitive market climate, the expense of conducting court proceedings, a government tax, have recently been subject to a 620% hike, prompting a senior judge to point out that “justice has become more and more unaffordable for everyone.”
Essentially, if you file a claim online, court costs start at £25 for a £300 claim, rising to £185 for a £3,000 to £5,000 claim. Fees leap sharply to £410 if the claim reaches £5,000 and, if it crosses £10,000, to 4.5% of the claim value. Claims in excess of £100,000 cost 5 per cent to lodge. When the claim goes past £200,000, the sum is capped at a whopping £10,000.
Litigation often includes hidden costs, which are much more difficult to measure but are paid equally. Long trials mean that more time is spent by individuals and companies participating in case planning and other ancillary activities than at work. The burden of litigation and the danger of losing the investment made in the event of an averse judgement or fleeing defendant affects the business owners of SMEs as well as individual litigants.
Eventually, these factors converge to make litigation an untenable doctrine. Justice has become more difficult to obtain, and conflicts will continue simply because parties are unable to afford or prefer not to risk a full blown jury. Alternative Dispute Resolution approaches provide the ability to settle conflicts, but without the litigation’s onerous time and expense burdens.