Costs in Litigation

Last edited 145 days ago by Ted Broomfield

Summary. This blog aimed at prospective clients of contingency attorneys explains that in general, the contingency attorney advances the client the cash costs necessary to pay for litigation, but, then takes those costs from the remedy achieved, in addition to and after, the attorney charges the fee. Details will follow.

Costs can often become an issue between a client and a contingency paid attorney.

Litigation is more expensive than you might expect and the costs of litigation must be paid regardless of the results. A complaint generally costs $435 to file, and another $75 to serve per defendant, plus the cost of paper copies. It costs $150 just to ask for a jury. Depositions of parties can easily cost $2,5000 each, and the conventional wisdom is that each party needs to be deposed. If the opposing party is a foreign speaker, a court certified interpreter must be paid, as well. If the case requires experts, experts can cost $5,000 deposit, and require more money to complete their work, prepare to testify and the like.

All in all, I advise clients to expect a minimum of $25,000 in litigation costs, with $30,000 very probable.

Clients can get confused by who pays for the costs.

My opinion is that the answer to the question of who pays for the costs of litigation is not confusing, it’s just yet another bitter pill that a plaintiff needs to swallow on the way to a remedy or partial remedy.

The unequivocal answer is that the client pays the costs.

It is true that under my contract, I advance the costs to the client. Advance the costs, means that I use my money to pay the vendors and the court the money that they demand for the “services” they provide.

However, when the case ends, the client pays for those costs, because I withhold those costs from the amount of money that the client receives.

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STEP 1: Compute my fees.

A: Value of what I obtained for the client

B: Multiplied by my contingency percentage

C: Equals my fees.

STEP 2: Compute what is available to pay the client, before I reimburse myself for my costs.

A: Value of what I obtained for the client

C: Subtract my attorney fees.

D: Equals amount after attorney fees, but before costs are subtracted.

STEP 3: Compute what gets distributed to the client.

D: Equals amount after attorney fees, but before costs are subtracted.

E: Subtract the total of all costs.

F: Equals the amount that gets distributed to the client.

In other words, the client pays the costs from the client’s share of the money, after my attorney fees are subtracted.

Again, this can be very confusing for clients.

It can also be quite contentious when the time comes to distribute the money, and the client comes to understand that in addition to the attorney fee, the client is also paying more money for the costs.

Sometimes clients want to negotiate that the client pay the costs.

In my practice, I never agree to pay the costs for the following reasons. As the litigation advances, I do not want to create a conflict between my interest and the client’s interest. If I have agreed to pay costs, I could be motivated to not spend costs that the case needed and risk giving the client the best representation possible.

Although the matter of costs can be quite complex in litigation. It is well worth learning how the costs work in advance to avoid being confused later.

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