The Top #1 Mistake People Make When Hiring a Lawyer to Resolve a Dispute & How to Avoid It!

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I’ve got a secret to tell you that shouldn’t be a secret. But it seems it is. So come in closer, and I’ll whisper it to you.

Before you initiate any legal process which you intend to hire a lawyer for, carefully evaluate if you might spend more on that lawyer than you are likely to benefit from that process!

That’s it. Simple, eh? Think everyone already knows and does that? Common sense would say yes, but I have three decades of legal experience that says NO.

THE PROBLEM OF SPENDING MORE ON CASES THAN THEY ARE WORTH

So what’s the problem? There are likely many reasons people violate this rule of nature:

  1. False hope that their case will quickly settle as soon as legal action is commenced, because the other side will be so intimidated by the strength of their case and not want to spend any money fighting them. It’s best to assume your case will never settle, and only consider it a bonus if it does.

  2. Overconfidence that because their cause is so just and to them easy to understand, that it will surely be super quick and cheap to vindicate themselves before any decision maker, resulting in recovering huge amounts of money or other valuable remedies.

  3. Inexperience with contentious legal processes, that always seem to take way more time and effort than even the most pessimistic of us would imagine could be possible.

  4. Underestimating how long it takes lawyers to accomplish anything, where only hourly rates are being compared, but there is no sense of what a ridiculous number of those hours might need to be invested into an adversarial process from start to finish.

  5. Failure of the client to push the lawyer for a non-binding estimate of fees and failure of the lawyer to volunteer such an estimate, because everyone is too scared to talk about worst-case scenarios that could lead to horrific legal costs.

  6. Failure of the lawyer to carefully assess all legal options and recommend the most proportionate process that is likely to maximize the cost-benefit ratio, instead pursuing the costliest legal route which permits the most remedies to be sought but possibly at an unaffordable price for the client that takes years longer than the quickest, cheapest option.

  7. Failure of both the lawyer and client to collaborate on figuring out how much a case might really be worth, prior to initiating any formal process.

DISPROPORTIONALITY HAPPENS OVER AND OVER AGAIN

Anonymized personal examples I can give you where I’ve witnessed other parties (who were always represented by experienced counsel) violating this rule include:

  • for a personal injury tort, even though the record damages for that particular type of case in all of Canadian history was about $100,000, the plaintiff sued for $88 million dollars, quickly using up likely more than $100,000 in legal time and getting nowhere, only to abandon the case;

  • for an employment contract dispute, even though the most the plaintiff could possibly recover was about $30,000, instead of pursuing the matter in Small Claims Court (with a limit of $35,000), the plaintiff commenced an action in Superior Court, quickly running up $60,000 in legal fees, eventually settling for half that amount of $30,000, but then appealing when they didn’t receive a costs award in their favour, where they ran up yet more fees, lost the appeal, and had costs awarded against them, leaving them much worse off than when they started;

  • for a construction dispute, even though the plaintiff’s damages might have at best amounted to $5,000, they sued numerous parties for $60,000 in Superior Court, despite their legal costs to end of trial likely being about double that amount;

  • for a land dispute where the plaintiff was being flooded by neighbours, the plaintiff proceeded by way of Civil Action for monetary damages (rather than Civil Application solely for injunctive relief to stop the flooding), naming a host of governments, big corporations and individuals as defendants (all of whom lawyered up), potentially running up a million dollars in legal fees fighting all these people to the bitter end when it was highly unlikely the plaintiff could afford those fees or that they would recover more than they were spending;

  • for a trespass dispute, where a very small telephone box was placed on the plaintiff’s leased land without an easement, the plaintiff sued in Superior Court for $250,000, with legal costs to trial likely being at least half that amount, but the realistic value of the case being more in the Small Claims Court range.

HOW TO AVOID THIS #1 MISTAKE & ALL THE MISERY THAT COMES WITH IT

Many legal problems don’t have simple solutions. But this one does, mainly focussed on obtaining a dose of reality through three principles:

  1. Collaborate with a lawyer prior to starting any process to conduct a harsh, blunt assessment of what your case might really be worth. If no case like yours in Canadian history has ever produced the results you desire, you likely aren’t going to be that precedent-setting case. At least with buying a lottery ticket, you do have a small chance. But when you think a $10,000 case is really worth $1 million, you have no chance. DO NOT hire the lawyer who only tells you what you want to hear, hire the one who tells you what you don’t want to hear as to what your case is worth, and how much it will cost.

  2. Ask your lawyer for a frank estimate of likely fees to case completion. If your lawyer won’t give you a non-binding rough cost estimate of fees to completion of your matter, find another lawyer. Lawyers aren’t obliged to give you an estimate, and such estimates can be unreliable. But there are basic realities that a one-day Small Claims Court trial occurring after 12 months total in court is going to cost a fraction of the price of a 10-day Superior Court trial occurring after 6 years total in court.

  3. Generally always prefer the quickest, cheapest legal process, even if it gets you a lot less than what you hoped for, than the longest, most expensive process that will supposedly get you everything you want. There is an excellent chance you might run out of money or get stuck in some procedural vortex for years in that complicated long expensive process, leading to no recovery at all.

Adversarial legal processes will always take longer and cost more than you would imagine is possible. Sometimes you won’t have a choice over participating in them if you are the defendant rather than the plaintiff. But where you do have a choice, carefully evaluate every option in advance asking yourself questions like (a) do I have a large enough budget to win this, (b) which lawyer will be most cost and results effective, (c) which is the cheapest, quickest legal process to use, and most importantly (d) am I likely to obtain a greater benefit from winning this case than the financial cost, time cost and hassle cost I’m going to incur from pursuing it?

Gordon S. Campbell is a lawyer who conducts civil and administrative litigation for clients in all Ontario and Federal Courts, including the Supreme Court of Canada. Read more about him here.