What can smaller businesses learn from large businesses on handling litigation?

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It is often said that large businesses are at an advantage when it comes to litigation as they have bigger pockets. From my experience, that’s only part of the reason. They also have more experience of litigation and know how to work with their lawyers as a team in order to minimise their costs. They tend to appoint an individual (or sometimes a team) to help their lawyers prepare their cases. They know that a lawyer is best placed to handle the legal side of things but it’s cheaper to do the more administrative tasks in-house.

So what lessons can the smaller firm learn from how large businesses deal with litigation?

Documents and Paperwork

1. Much, and often most, of the cost of litigation is due to sorting out documents. Nowadays, documents don’t just consist of paperwork but also electronic documents (emails and other computer files). The Number 1 thing you can do to keep your costs as low as possible is share tasks between you and your lawyer so that you do as much of this work yourself rather than pay your lawyer to do it for you.
   
2. When a dispute first arises, open a file (a real one, not a computer one) and put all the paper documents relevant to the dispute in it. Put them in chronological order, with the oldest at the front so, when read like a book, it tells a story.
   
3. If you’re not sure whether a document is relevant or not, put it in anyway but flag it – a coloured Post-It note is the best way.
   
4. Mark the most important documents with a different coloured Post-It note so your lawyer knows which documents to look at first.
   
5. Go through your computers and emails to find relevant documents. Think of search terms and phrases and search your entire system. Discuss what search terms to use with your lawyer. Put the relevant electronic documents into an electronic file. Again put them in date order and mark the most important documents, and also those where you’re not sure whether they’re relevant or not. Print out the important electronic documents and slot them into the file with the paperwork.
   
6. Highlight the parts of documents that are relevant (a yellow highlighter pen is excellent for this). It will save considerable time if your lawyer can go straight to the important parts, especially if you are in the habit of creating long email chains by simply pressing the ‘Reply’.
   
7. Each case is different so work with your legal team to agree on what work you can do and what to leave to them.

Know Your Case

1. You know your business and how it works better than your legal team so don’t expect them to act as detectives would in a criminal investigation. Make sure you understand your case and what you need to prove to win, and discuss this with your lawyer. By doing this, you will often find evidence and bits of information that would otherwise not come to light.
   
2. When the other side send documents and witness statements, look through them carefully and consider what evidence you have that contradicts what they say. Highlight it and send it to your lawyer saying how it shows they are wrong.

Be Prepared to Compromise

If a case goes to trial, about ½ of the entire costs of the litigation will go on the trial. Therefore, try to settle the case before this if possible. The courts also expect parties to settle cases and put pressure on them to reach a compromise. Your lawyer will advise on the best time attempt a settlement and how to go about this. It might be a matter of making an offer to settle or going to a mediation or other meeting, or some combination.

Gary Cousins
Business lawyer

For free advice on this topic please call us on 0845 003 5639.