Lawyers often bemoan how clients display a deep aversion to the "L" word. This is because litigation is a notoriously expensive exercise. In a typical case, it could take 58 weeks for a hearing to take place from the time that it was filed.
Expenses begin to pile up from the moment a claim is contemplated and legal advice is sought. According to the Centre for Policy Studies, a conservative think tank, partners at top City law firms are charging clients more than £1,000 an hour for their services, a figure which can rise as high as £5,000. These exponential rates are shrouded in mystery due to a lack of transparency as to their accrual, allowing top firms virtual control over their prices.
“Those seeking to comply with UK legal procedure are forced to pay extremely high costs to do so – high enough to restrict access to law, particularly for smaller business clients for whom bills can be prohibitive” the CPS report states.
Accordingly, seeking advice through high street firms, although relatively lower in their costs, impose a proportionately greater burden as clientele usually tends to be individuals rather than large multinational corporations.
Hourly rates imposed by a highly competitive commercial environment aside, the cost of issuing court proceedings, a governmental levy, have been recently subject to a 620% hike, leading a senior judge to remark that “justice has become increasingly unaffordable to most”.
Essentially, if you issue a claim online, the court fees begin at £25 for a claim of up to £300, rising to £185 for a claim of £3,000 to £5,000. The fees jumps dramatically to £410 once your claim exceeds £5,000, and to 4.5% of the value of the claim once it hits £10,000. Claims over £100,000 cost 5% to file. The amount becomes capped once your claim goes over £200,000, at a staggering £10,000.
Litigation also involves additional costs that are somewhat harder to quantify but equally taxing. Lengthy trials mean that individuals and businesses spend more time involved in case preparation and other ancillary tasks than at work. The stress of litigation and threat of losing the investment made in the case of an averse judgment or fleeing defendant effects the SMEs business owners as well as individual litigants.
Eventually, these factors combine to make litigation an orthodoxy that is no longer sustainable. Justice has become harder to access and disputes are allowed to linger simply because parties cannot afford or choose not to risk a full blown trial. Methods of Alternative Dispute Resolution offer the means to resolve disputes, but without the onerous time and cost burdens of litigation. To find out more about how mediation may resolve the issues presented by litigation, click here.