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The High Price of Litigation Costs

A gavel and law bookWhen people discuss the high cost of litigation, they often refer to the amount of attorney’s fees that are necessary in bringing or defending a lawsuit. Attorney’s fees are typically the largest burden in the expense of litigation, however, a civil suit in general can be very expensive. Did you know that in addition to attorney’s fees, there are filing fees, copying fees, court reporter fees, expert witness fees, process servers and other court and discovery related costs that could also saddle you with thousands of dollars in additional litigation expenses? Attorney’s fees are usually considered separate from the “cost” of trial. Many of these expenses are not recoverable from the other side. Before bringing a lawsuit, it is important to consider the costs related to litigation and the amount of money you will spend on the case.

In California, the first fee is the initial cost of the lawsuit in filing the first papers from each side. Typically, the plaintiff files their complaint and the defendant responds with an answer or a demurrer. The first fee can range from $250 to $1000 depending on the type of civil case that is filed. The filing of a cross complaint will incur similar costs to filing a first paper. In addition, the courts will charge a court reporter’s fee, and in a demand for jury trial there will also fees related to obtaining a jury. Throughout the litigation process there are often motions filed with the court, asking to strike the complaint or cross complaint, exclude certain witnesses or evidence, or having the court make a ruling of a matter of law. Here in California, motion fees are $60 per motion filed. A party to a lawsuit can also find themselves hit with miscellaneous filing fees for other documents filed on the way to trial.

The way documents are filed can also be of cost to a party. Court documents are usually filed in person, via facsimile or electronically if the court is set up with E-filing. Unless the documents filed in person are done by the attorney or a member of their staff, a court agency is often used and a “runner” would be filing the documents on behalf of the law firm. With this, comes the cost of hiring the runner, the cost is often dependent on the agency used, where the filing takes place and the number of pages of the document. It could also be determined based on whether or not the documents were scanned or faxed to the agency or if the runner needs to pick up the original from the law office prior to filing with the court. When filing via facsimile, there is usually a cost per page in addition to the filing fee of the document itself. E-filing also has a fee charged for each document filed with the court, ranging from $5-$10 per transaction.

Moreover, certain documents require that a party to a lawsuit be personally served. A court agency will also be used in personal service of such documents, and there will again be fees associated with the service of process dependent on certain factors such as the agency used, where the service takes place and the number of pages of the document. A party to a lawsuit may also incur costs for copying, obtaining records from the court, recording documents with the county recorder’s office, the cost to pay witnesses or expert witnesses to testify at trial, costs related to the production of documents in discovery or the cost of conducting a deposition and other miscellaneous fees. As good practice, an attorney will usually discuss with a client the different steps to the litigation process, as well as the anticipated costs, and itemize such costs for the client in their monthly billing.

As a civil defense attorney in Fullerton, I can tell you that there is certainly a high price to pay for the cost of litigation. This information is not to dissuade a plaintiff from bringing a lawsuit, but rather educate one on the intricacies of the legal system and the expectation of costs. When opting to bring a lawsuit or hire a civil litigation attorney to defend one, best practice is to have the attorney take a specified amount of money from the client and place it aside for the initial costs of litigation.

However, a good civil defense attorney must keep litigation costs to a minimum and must also consider the client’s ability to pay those costs. Learning to get the most bang out of your buck (especially in a civil lawsuit arena) is an art that not all practitioners know.

I’ve Been Served With A Civil Complaint, Now What?

You’ve been named as a defendant in a civil case and have just been personally served with the summons and complaint. Now what? This blog seeks to give an overview of the chronological steps of the litigation process.

Step 1: Consult a civil defense attorney. Depending on the type of case you have pending against you, a lawyer can be a resourceful tool in understanding the lawsuit, providing advice on how to handle each step of the litigation process and helping build a defense. While hiring a lawyer could cost a defendant a good deal of money, the benefit of legal counsel could hold a significant impact to the outcome of the case. If you choose to forego a lawyer, it will then be your responsibility to respond to each step of the lawsuit accordingly, acting as in pro per, as in your own attorney.

Step 2: Prepare a response pleading to the Complaint. Typically, in California, there are three types of responsive pleadings a defendant can file in response to the Complaint. The first is an Answer. An Answer responds to the Complaint itself, and the defendant either admits or denies each of the causes of actions alleged. At this time, a defendant would want to raise any affirmative defenses, a claim made by the defendant, that defeats the claim made by a plaintiff for a specific reason, or raise any causes of action the defendant may have against the plaintiff or a third party by the filing of a Cross-Complaint, thereby initiating their own lawsuit. Rather than Answer a Complaint, a defendant also has the option to respond by filing a Demurrer or Motion to Strike and setting a hearing date to be heard on the issue. A Motion to Strike is a pleading document where a defendant asks a court to remove (strike) a portion of or the Complaint in its entirety on any number of grounds. A Demurrer on the other hand is an objection that attacks the Complaint for it is irrelevant, invalid or fails to state facts sufficient to constitute a cause of action without addressing the facts alleged themselves. For Motion to Strike or Demurrers there is a hearing held in which the court determines the strength of the legal argument for granting or sustaining the responsive pleading. If a court finds in favor of the defendant, a plaintiff may have been given the possibility of leave to amend. If a court finds in favor of the plaintiff, the lawsuit continues as is, and the defendant would then be required to file an Answer. Keep in mind regardless of the responsive pleading you choose, there are only 30 days to respond to the Complaint starting from the date you received service of the Complaint. Failure to respond timely could result in a default judgment.

Step 3: Discovery and Pre-Trial Preparation. Throughout the litigation process the court will set a series of hearings and deadlines leading up to trial. It is also during the time between the filing of the responsive pleading and the date of trial that the bulk of the investigation into the lawsuit is conducted by discovery. Discovery is the exchange of documents and information regarding the allegations and facts and evidence that support such claims. Discovery is conducted by written requests such as requests for admissions or interrogatories, production of documents or Depositions. The discovery phase also gives each party to locate witnesses and build their case. If an expert witness is needed for your specific lawsuit, the attorney will work on obtaining one. This time is also used to file motions with the court to exclude certain evidence from being admitted at trial. In California, the discovery cut off is 30 days before the start of trial.

Step 4: Preparation of Trial Documents. Discovery cut off has passed, now it is time to build your case for trial, which is best accomplished by the creation of trial documents. While the rules regarding trial documents may differ based on the judge and court location, the general basis for trial documents is that a party puts together a list of the exhibits they plan to use at trial, the witnesses they plan to call, instructions for the jury and a statement f the case to be read to the jury. Many judges require joint trial documents to be filed with the court in advance of trial. In preparation of such, your attorney will need to work with opposing counsel to create joint trial documents and binders of these documents and exhibits for the trial to be given to each side, the court and witnesses.

Step 5: Mandatory Settlement Conference. In the weeks before trial, either a mandatory settlement conference or a final status conference will be set with the court. This is a last attempt at settlement, or if settlement is futile, an effort to resolve certain issues prior to the start of trial. It is possible that a settlement is reached between the parties during this hearing, or there is the exchange of trial documents and binders if the exchange with opposing counsel had not already been completed.

Step 6: Voir Dire for Jury Trials. The first day of trial begins with the voir dire, or the selection of the jury. A jury panel in California is comprised of 12 individuals and 1 or 2 alternates. It will be the jury’s duty to evaluate the facts of the case and reach a verdict. I hope your attorney chooses wisely!

Step 7: Trial. You finally made it to trial! Litigation can be a long and drawn out process but your day in court has arrived. It is up to the attorney to present your case in chief, calling all witnesses and presenting any evidence to the court so that the strength of your arguments can be evaluated. As the defendant you will wait until the plaintiff has presented all of their evidence before getting to present your case. After the completion of trial a verdict will be reached. Options following the completion of trial will be dependent on numerous factors some of which depend on the outcome of the case. Any questions you have with regard to next steps should be addressed with your attorney following the end of trial.

And there you have it, you have successfully walked through the litigation process, and are now better informed on what to do in a situation where you are served with a civil complaint.

As a reminder, a good civil defense lawyer should not only assert the appropriate defenses on and in your behalf, but also hold the plaintiff to its burden of proof utilizing tools from the code of civil procedure and the evidence code in defending against underhanded tactics and untrustworthy and irrelevant evidence that may otherwise reach the judge or jury in determining liability and damages against you.

In other words, a good civil defense lawyer not only defends their client, but makes sure that the plaintiff proves his/her case accordingly even before any defenses are asserted.

However, as always, a good offense is the sometimes the best defense.

 

To Settle or Not to Settle

business meeting in an officeLitigation is an adverse proceeding in which there are often times a clear winner and loser, which is often determined at trial. In my experience as a civil litigation defense attorney, I can tell you that it is also a rather lengthy and expensive process. As a result, a large number of civil cases settle, an alternative form of resolution, prior to even reaching trial. In addition, the courts also encourage and attempt to facilitate settlements amongst parties, through mandatory settlement conferences, fostering alternative dispute resolution amongst the parties by way of mediation or arbitration, or persuasion of the judges themselves, as a way to promote judicial economy and efficiency within the court system. In California, settlement offers are governed under Section 998 of the California Code of Civil Procedure (often called “998 Offers”).

Under Section 998, the law provides that not less than ten days prior to the start of trial or arbitration, “any party may serve an offer in writing upon any other party to the action to allow judgment to be taken or an award to be entered in accordance with the terms and conditions stated at that time.”

The offer shall make a statement of the amount of settlement requested, and any terms and conditions the party seeking settlement would want to impose on the settlement agreement, as well as a provision allowing for acceptance of the offer by the accepting party and the signing of such acceptance of the agreement.

In addition, there are certain requirements to impose a Section 998 offer. First, the offer must specifically refer to Section 998 in its offer, a mere offer for settlement is not enough. Second, only reasonable, credible offers will be accepted. “[T]he pretrial offer of settlement required under Section 998 must be realistically reasonable under the circumstances of the particular case.” Wear v. Calderon 121 Cal. App. 3d 818, 821 (1981). Additionally, only unqualified acceptance of a 998 offer is enforceable and in the case where there are multiple parties. If a party accepts the offer, the signed offer is thereby filed with the court and judgment is entered. If the accepting party fails to accept the offer prior to the commencement of trial or within 30 days, by whichever occurs first, the offer is deemed withdrawn. While Section 998 offers seem to simply lay out the requirements for settlement, and are in effect beneficial to achieving its primary purpose of encouraging settlement, this statute is rather deceptive in nature. While the expense of trial is one reason to accept such offers, the main incentive behind the acceptance of Section 998 settlement offers derives from statutory conditions imposed, such as monetary penalties, on the parties for failure to accept such offers. In the Bank of San Pedro v. Superior Court, the Court found that the policy behind Section 998 offers “is to encourage a settlement by providing a strong financial disincentive to a party – whether it be a Plaintiff or a Defendant – who fails to achieve a better result than that party could have achieved by accepting his or her opponent’s settlement offer.”  3 Cal.4th 797, 804 (1993).

More specifically, Section 998 imposes statutory penalties, both mandatory and discretionary penalties, on parties who reject such offers and fails to reach a more favorable result at trial or binding arbitration. While the language of Section 998 is straightforward, the effect of such penalties is dependent on whether it is the plaintiff or the defendant that makes the offer.

Offers by a Plaintiff. If plaintiff makes a Section 998 offer, and a defendant rejects the offer, and fails to achieve a more advantageous result at trial, the Court imposes penalties on the defendant. When this situation arises, a court may impose additional costs on the defendant for reasonable costs incurred by the plaintiff such as expert witness fees, and a pre-judgment interest of ten percent per day beginning on the date of plaintiff’s first Section 998 offer to the date of judgment at trial. CA Civ. Code §998(b).

On the other hand, offers by a defendant may have a more of a significant impact on the decision of a plaintiff to agree to settlement, for there is a greater harm imposed on a plaintiff for failure to accept a 998 offer and obtain a more favorable result at trial.

Offers by a Defendant. In the instance where a plaintiff rejects the defendants’ Section 998 offer and fails to obtain a more favorable judgment at trial, the plaintiff is no longer entitled to recover court costs, and must pay the costs of the defendant from the time of the offer to the time of judgment at trial. The court also retains discretion on whether or not to award all costs incurred by the defendant in defending the lawsuit as well as reasonable costs sustained in preparation of trial, such as fees for expert witnesses.  In this occurrence, if the awarded costs exceeds plaintiff’s recovery from trial, the court will enter a judgment against plaintiff for the difference payable to the defendant. CA Citv. Code §998(c).

While the risks of Section 998 penalties are worrisome, generally there is not enough of an incentive to settle. Often times the point in which a 998 offer is received the parties have already committed to the expense of litigation. Although such offers may not be accepted, they do have the benefit of helping to initiate communication discussions between the parties, where a less invasive agreement may be reached.

Therefore, my advice as a civil litigation attorney is that it is always a good idea to settle the case accordingly without resorting to a trial where risks and costs increase.

In deciding what offers to make and accept, all discovery should be completed in making a full and informed decision.

All offers should be reasonable and practical. Otherwise, the essence of the rule quickly dissipates.

Mediation— Welcome relief from civil litigation, or just a waste of time?

Image of a Mediation Agreement

What is mediation?

Mediation is a form of alternative dispute resolution that attempts to help parties facing civil litigation improve communication, minimize harm, and find a compromise that is acceptable to all parties without going to court. A neutral third party-the mediator- assists the parties to negotiate a settlement in a variety of situations, such as legal or family matters. In effect, the mediator’s role is not to reach a decision, but to help the parties reach their own decision.

What are the advantages to mediation?                                                             

A mediator may charge a fee comparable to that of a civil defense lawyer, but the mediation process usually achieves resolution in a matter of hours or days, rather than the months or years it can take to resolve the issue in court. Usually the fact that involved parties are willing to negotiate means they are ready to find a solution sooner rather than later, which can save everyone involved time and money.

Mediation is also strictly confidential, which can be advantageous in a situation in which discretion is important. Mediation places such importance on confidentiality that in most cases the traditional legal system cannot force a mediator to testify in court. As a civil defense attorney in Orange County, I can tell you some mediators destroy their notes taken during meetings once that mediation has finished. The only exceptions to these stringent requirements are mandated reporting situations such as child abuse.

Thirdly, mediation is likely to produce an agreeable result for all involved because solutions that emerge are not controlled by a judge or jury. The extra room for discussion usually means both sides get more of what they want. In turn this increases overall satisfaction and further reduces costs because the parties don’t have to hire an attorney to force compliance with the settlement.

Finally, mediators are licensed professionals that are trained to work in difficult situations. Mediators are there to guide the parties to think “outside the box”, and their excellent communication skills are often able to preserve the relationship the parties had before the dispute.

What are some drawbacks to mediation?

Unfortunately, mediation does not always end in agreement. Parties might spend their time and money in mediation only to find they must have their case settled by a court of law. Therefore, opting for mediation does pose some risk. Further, if mediation fails, much of a party’s strategy for building a case to win in court may have already been exposed.

Mediation also lacks formal procedures and constitutional protections guaranteed by in court. Parties that exhibit a mismatched level of power or resources may not be able to find a fair settlement since the less well-positioned party can easily become overwhelmed. A timid party runs the risk of losing some of what is legally owed if the other party is aggressive and dominates the process.

Additionally, legal precedent cannot be set in mediation. Many discrimination cases, for example, are brought with the intention of not only satisfying the plaintiff, but also with hope of setting a legal precedent which will continue to have a greater social impact. This outcome can only occur if a high court, usually the Supreme Court, hands down a favorable decision on the main issue.

Lastly, mediation has no formal discovery process. If one of the parties in a dispute cannot fully address the case without receiving information from the other party, there is no way to compel disclosure of such information. The party seeking disclosure must rely on the other party’s good faith, which may not be enough.

If you need a civil defense attorney in Orange County to help you decide if mediation may be a good fit for your situation, give us a call today! We have professional and knowledgeable attorneys standing by to assist you in Fullerton, Brea, Placentia, or anywhere in Orange County.  Contact us at (714) 525-5570.

Reasons Not To Sign An Arbitration Agreement

picture of employee signing an arbitration agreement

What is an arbitration agreement?

As a leading civil defense attorney in Orange County, I get asked this question a lot.

An arbitration agreement is a written contract in which two or more parties agree to utilize a neutral third party- the arbitrator- to resolve a dispute instead of pursuing any legal claims against the other party through a lawsuit. The arbitration agreement is usually a clause in a more extensive contract, but may also be a separate document required to be signed by an employee in the hiring process when starting a new job.

Arbitration can be voluntary, but in most cases is mandatory when present as a stipulation of a consumer contract or when completing new hire paperwork as an employee. Mandatory arbitration can only come from a contract that is voluntarily entered into by both parties, even without necessarily knowing if a disagreement will ever actually arise. The dispute may be about a faulty product, a claim of discrimination or wrongful termination in the workplace, or a variety of other issues.

Presently many consumer contracts for cars, cell phones, credit cards and nearly everything else contain a fine-print clause stating if the customer has a problem with the company, the matter will be handled in arbitration rather than in court. Unfortunately, consumers and employees often don’t know in advance that they have agreed to mandatory binding arbitration by purchasing a product or taking a job.  Many retailers also fail to mention the arbitration clause before requiring the customer to sign the purchase agreement.

The Disadvantages of Arbitration Agreements

Being aware of the possible drawbacks of arbitration can help you make an informed decision about whether to enter or remain in a contract that mandates it, or whether to choose it as a resolution technique if a dispute does occur at a later time.

  1. Firstly, arbitration does away with juries entirely, leaving matters solely in the hands of the arbitrator, who essentially acts as both judge and jury. From most individuals’ and consumers’ points of view, having a jury of their peers is an important right when seeking restitution of a claim.
  1. Additionally, arbitration limits the amount of information each side is required to give to the other. In most employment cases, this generally hurts the employee, because the employer is usually the one in possession of most of the documentation relating to the employee’s case.
  1. Most importantly, arbitration decisions usually cannot be appealed. If the arbitration is mandatory and binding, the parties waive their rights to use the court system and have a judge or jury decide the case. If the arbitrator’s award is unfair or illogical, a consumer may well be stuck with it without a chance for recourse.

 Leveling the Playing Field—Smart Steps for Consumers and Employees

Given the possible perils for those who enter into arbitration contracts, the astute consumer or job applicant can take a number of steps to become better informed and possibly prevent a negative experience.

Any civil defense attorney in Orange County will tell you to read any and all documents presented in a contract carefully! When you sign a contract, letter, sales agreement or any other document you agree to all the terms enclosed, even those that you didn’t read or don’t completely understand. To protect yourself from unwittingly giving up your rights, don’t sign any document acknowledging you’ve read something and agree to the terms unless you actually have read it and understood it completely.

Secondly, pay close attention to any and all changes made to an existing agreement. If a company updates the terms of a contract to include mandatory arbitration, it must notify you in writing first. Some of these notices may come hidden at the back of an envelope itemizing your bill from a credit card or insurance company. Resist the urge to recycle these notices on sight, and read the fine print.

Thirdly, don’t be afraid to speak up! If you find an arbitration clause objectionable for any reason, make your feelings known to company management. There may be a possibility to negotiate if the company wants your business, or you as an employee badly enough. Especially in employment cases, you may have more power than you realize to negotiate the terms of an agreement to align with your best interests, just like you would when discussing your salary or benefit requirements.  Ask for a clause that provides options for choice of arbitrator and a requirement that if the company does insist upon enforcing an arbitration agreement that they pay for the process, should the situation ever arise. An arbitration agreement that is disputed using the court’s judicial arbitration services is only $150, but if a company insists on using a private arbitrator the parties will be required to pay the arbitrator’s market rate, which can easily turn into thousands of dollars as time goes on.

Arbitration can be dangerous and expensive. Be watchful for it and careful before agreeing to it.

Mediation, on the other hand is another matter and I will discuss that issue (and its benefits) in a separate blog.

Lastly, always remember that even if you do fall within an arbitration clause, you still have the right to be represented by an attorney throughout the arbitration process.

Paymon Bidari is a civil litigation attorney in Fullerton, Orange County.

Negotiations and Settlements

Civil Settlements

Should legal disputes be negotiated and settled before civil litigation commences?

Absolutely- so long as the delay in filing the suit or seeking protective orders does not jeopardize the preservation of evidence and/or assets. One of the most useful and economically efficient things we can do as experienced trial attorneys is to keep our clients out of court- as much as possible, and instead prevent, negotiate and/or settle accordingly.

Often times, the parties (and/or their attorneys) act in haste in filing a suit, and hence commencing an often costly process without first attempting to informally resolve the matter. Litigation should be the last resort- as surgery should be in the medical field. However, when all efforts to heal the patient have failed, then surgery may be the only choice- as sometimes is the case in the legal field. Negotiations and settlement is an art and may be involved; however, if there is any chance of resolution, then all efforts should be exercised, and exhausted, before litigation commences.

Clients should be afforded several options before deciding to proceed with (or without) litigation. Attorneys should evaluate the facts and law, and develop strategies and arguments in preparation and presentation of their settlement offer. Negotiating and settling lawsuits should be a major priority of litigation attorneys when appropriate.
Realizing trial and litigation can be costly (both monetarily and non-monetarily), attorneys must do everything possible to negotiate and settle disputes before the client spends unnecessary money litigating.

If you have further questions about your legal disputes, please contact Orange County Civil Litigator Paymon Bidari for a free consultation today. (714) 525-5570

 

Wrongful Death Case Dismissed

Pham v. Ramirez, et al. (00749808)

  • Attorney for Plaintiff: Larry H. Parker’s Office
  • Attorney for Defendant: Bidari Civil Defense
  • Claim: $5M for Wrongful Death
  • Resolution: Case Dismissed in favor of Defendants

This unfortunate wrongful death case arose out of claims that decedent was attacked by Defendants’ dog causing decedent to fall, break his head and subsequently pass away.

Decedent’s estate sought five million dollars ($5M) in this wrongful death case filed in Santa Ana Superior Court. A jury trial was demanded by Plaintiff’s estate. Bidari Civil Defense defended.

After the initial completion of discovery, Defendants moved to dismiss the case without paying any money. read more…

How to Choose the Right Civil Defense Attorney

By Paymon Z. Bidari at Bidari Civil Defense.

Almost nothing is more aggravating to a client than to leave a legal project or case in a lawyer’s hands and then have weeks or even months go by without anything happening. You want a lawyer who will work hard on your behalf and follow through promptly on all assignments.

As such, you would agree finding and hiring the right lawyer can make all the difference.

The first question one should ask before hiring a lawyer is:

Do I even need a lawyer?

Determine if it is possible and prudent to solve your own legal problem without the necessity of hiring a lawyer. In many cases, you may be able to solve your problem without an attorney’s help.

For example, if you are dealing with a regulated industry, there may government agencies in charge of supervising the business entity against which you may have a claim. read more…

Elements of a Contract

By Paymon Z. Bidari at Bidari Civil Defense.

Every valid contract has certain foundational elements. Here is a summary of those elements. If one element is missing, there is NO valid contract.

  • Offer and acceptance
  • Intention to create legal relations
  • Consideration
  • Legal capacity
  • Illegal and void contracts

Offer and acceptance

contract is formed when an offer by one party is accepted by the other party. read more…