Any organization is susceptible to being the subject of lawsuits filed by persons who have a legal claim against another. As a result, the flow of business in terms of operations, costs and management are often disrupted. The cost of a company in defending itself in court would result to the inevitable spending of cash in hiring a lawyer, paying for the latter’s appearance fees in court during hearing, docket fees and other lists of litigation expenses. Another aspect that should be considered in maintaining a law suit is the need to send office personnel in court as representatives of the company to attend during hearings. The bringing of a case in court whether a person is in the right or not is not an assurance that one would emerge as the winner. The suit is brought before the court for the latter to decide based on the evidence and the records presented as to whom among the parties is legally entitled to the subject of the controversy. There is never an assurance that a party bringing the suit would always win. Thus, a company should be ready to anticipate the worse case scenario of losing. This means that the company should also be prepared to pay any amount that the court may award in favor of the other party in terms of damages such as actual, moral or exemplary. (Grube, Lorri. Litigation – Cost of Litigation to US Businesses) Court litigation entails a lot of expenses and it usually covers a large percentage of a company’s expenditures. The court can award costs of up to $1 Million dollars in damages in favor of another party. (Grube, Lorri. Litigation – Cost of Litigation to US Businesses) There is also the need to consider the cost of appeals in the event that a company wants to pursue his claim. Thus, the cost of defending oneself in court has its advantages and disadvantages. There may be others who would argue that the court is the proper channel to use in order to seek justice and to enforce a person’s right however, there are other options available for parties to settle their controversies.
One option that should be made available for companies is an out of court settlement. This method of settling legal disputes is recognized by law and is favored because it helps to eliminate the rising number of pending cases in courts. This can be likened to a compromise where both parties reach an agreement in favor of each other and decide to put an end to litigation. An out of court settlement would allow a company to save a lot of money because there would be no need to pay for docket fees, appearance fees for lawyers and other expenses needed for litigation. Another advantage of this is that the matter can be settled faster because it really depends on the parties to set a time and place to meet in order to resolve the issue. (Moulton, Donalee. Vanishing Trials: Out-of-Court Settlements on the Rise) This would allow a company to focus on more important matters that has to be addressed within the organization instead of sending office personnel to attend hearings. It would also be easier to manage the time of the company because the resolution of the case is not dependent on court schedules. The progress of an out of court settlement really depends on the willingness and desire of both parties to put an end to it. This method would also allow the parties to bargain on a more or less equal footing because the ambiance is not as stiff as that in a court room because there would be no judge or jury to decide on the case. The tenacity of the dispute really depends on the parties and the issue can be resolved in just a few days as compared to a litigation which can drag up to several years. An out of court settlement is really encouraged due to the benefits that it brings to an organization.
Grube, Lorri. Jan-Feb 1995. Litigation – Cost of Litigation to US Businesses. Retrieved on May 14, 2009 from website http://findarticles.com/p/articles/mi_m4070/is_n100/ai_16637004/.
Moulton, Donalee. October 17, 2008. Vanishing Trials: Out-of-Court Settlements on the Rise. Retrieved on May 14, 2009 from website http://www.lawyersweekly.ca/index.php?section=article&articleid=784.