Litigation Strategies Part I: I Love You But…

By Doug Chalgian on December 20, 2012

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Litigation clients often misunderstand the likelihood of recovering legal fees.

They believe, understandably so, that because the other party (whoever that may be) did something bad so as to cause the litigation to be necessary, that someday the Court is going to order that the other side must reimburse them for the thousands (tens of thousands) of dollars they have spent or are spending for legal fees in their case.

In so many words, I say to them: “I love you but don’t ask me about getting your legal fees paid by the other side again. I will see what we can do, but the likelihood that you will recover any significant amount of your fees is slim.”

It’s just the way it is.

The American legal system is built on the idea that each party pays their own fees.  Pretty much all other legal systems operate on the idea that the losing party pays the legal fees for the prevailing party.  I won’t get into the relative merits or demerits of each system, but I think the American rule is best.

While there are fee shifting devices built into the process, those opportunities are generally limited, and my experience with Courts is that they are very hesitant to exercise their authority to shift costs in any meaningful way.  A lot of that has to do, again, with the American rule.

The truth is that outspending an opposing party is a valid and often useful litigation strategy that has to be considered at the start of each case.  Can you keep up with the other side, can you outspend them, or can they wear you down simply by keeping the litigation going and outspending you?

An important variation on this calculation that comes up in many probate litigation cases is that the party in control of the estate (personal representative, trustee, conservator, as the case may be) has access to the community pot to finance their case.  At the outset of many cases, this issue is raised, and the party not in control will seek to obtain an order preventing the party in control from using those funds to finance their legal costs.  There are several theories which may apply, but in the end, the general rule is that the party in control can use the estate funds to pay their legal bills.

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mm By: Doug Chalgian
Doug Chalgian

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