July 21, 2015

Convert Litigation to Arbitration

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It is prohibitively expense to go to Court for cases worth $100,000.00 or less.

Back in 2007, well-respected civil litigation lawyer Ron Slaght said it it may not be worth taking a case to court unless more than $100,000.00 is at stake. As of 2007, the Toronto Star was reporting that a 3-day trial was likely to cost you $60,000.00. Please click here for the article. These figures have only gone up since 2007.

From the client perspective, these figures are absurd. From the lawyer’s perspective, a 3-day trial is actually a lot of work. There may be 3-5 days of preparation for each day of trial. Trials are won through rigorous preparation. And that does not include all the pre-trial litigation nonsense that drives costs up. Many of the pre-trial litigation steps are mandatory under the Rules of Civil Procedure.

The solution to this problem is to send all litigation concerning approximately $100,000.00 or less to arbitration. Arbitration cuts out the pre-litigation nonsense. Arbitration can impose strict time limits on hearing time. There may still be lots of preparation, but that preparation is more disciplined with time limits in mind.

When litigation lawyers get a call on a new case where $100,000.00 or less is at stake, it should be automatic to consider, advise and act on arbitration. Commentary to the Rules of Professional Conduct indicate that it is important for lawyers to consider, advise and act on ADR, including arbitration in appropriate cases. A failure to do so may amount to negligence in light of the known costs of proceeding in Court.

Converting litigation to arbitration is win-win for lawyers and clients. Lawyers will find simple arbitration rules that get to the point refreshing. Clients will get their cases heard quickly and efficiently. It won’t cost $60,000.00 to fight over $100,000.00. Clients of lawyers who take them to arbitration will be happier, with long-term benefits to the lawyer.

As things stand, arbitration is an under-utilised opportunity. It will be interesting to see who catches on first: lawyers or clients.

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