How do I… manage my litigation costs?

It is no secret that litigation is one of the most expensive ways of resolving disputes. Although you can never fully control how the opposing party is going to conduct the litigation (which is why it is difficult to estimate costs), the one area over which you have substantial control is how you help your lawyers. This article looks at some steps that you and your legal team can take.

Bundle the relevant documents

Initially, you may be better placed to do this than your lawyer as you will be familiar with your filing system and can undertake the task more efficiently and cheaply. Once all the relevant papers have been collated, you should place them in lever-arch files in chronological order. If there is more than one issue in dispute (which is likely to be the case), you should separate the documents into issue-based files.

It is likely that most of your documents will be in an electronic format. In addition to collating physical documents, you should also give your lawyer electronic copies of documents; this will save you incurring the costs of scanning and also reduce legal costs as your legal team will need to spend time reviewing the documents and to have them available electronically is much more efficient.

Your legal team should then be tasked with creating a chronology of events for each issue in dispute with reference to the relevant documents. The value of this should not be underestimated.

Cost estimates/fee arrangements

Get a cost estimate and negotiate your fee arrangement with your lawyer as soon as possible. There has been a movement from time-based billing to target cost arrangements, fixed fees, capped fees and conditional fee arrangements (CFAs), so don’t be afraid to explore these. In particular, CFAs (where lawyer and client agree to share the risk of the litigation by linking the fees to the outcome of the litigation) can put pressure on the other side to settle because the success fee, if you win, should be recoverable from the other side.

Early instruction of experts

Construction disputes often involve complex technical issues and will require expert evidence. You should consider appointing your technical expert(s) as early as possible. An early opinion on the technical merits could save you the expense of pursuing lengthy and unsuccessful litigation.

Set a strategy

A good lawyer will explore with you your commercial drivers, understand what you want to achieve and will agree an appropriate strategy with you. Litigation should never be conducted without reference to your business objectives.

Take an active role in disclosure

Disclosure of the documents relevant to the dispute, aside from the trial itself, can often be the most expensive stage of the litigation. You can reduce your costs by collating the relevant documents yourself, with supervision from your solicitors.

You should also explore at an early stage with your lawyers how the disclosure process should be managed to save you costs. Focusing on the categories of documents you think you will need to disclose and want from the other side is a good starting point. Ideally you should be in a position to agree with the other parties, by the first case management conference, the extent of disclosure, including the date range of documents.

Prepare witness statements

This is often a substantial cost in complex cases. One way to reduce it is to get your lawyer to prepare a “road map” for the witness and get them to create the first written draft of their statement. The lawyer should also provide a bundle of contemporaneous documents relevant to the issues that the witness is to give evidence on. For key witnesses, whose knowledge of the project is extensive, this may be more cost effective than the ordinary starting position, where the lawyer takes the statement by interviewing the witness.

When preparing witness statements, we should be mindful of the observation of Lord Justice Jackson in his January 2010 report on costs: a witness statement should be as short as possible and only address the issues in dispute, be in the witness’s own words and elaborate on (and not repeat) what is already set out in the contemporaneous documents.