Legal action – Issues to consider

Before taking legal action

legal actionWhen faced with the prospect of instigating or defending legal action, you must be very objective and honest with yourself about what you intend to achieve by it and assess the options most likely to result in the best outcome for you. What constitutes this depends upon the reason for the action, but it is usually money.

Don’t assume that the winning party is always fully recompensed; costs are awarded at the discretion of the judge, and a technical victory in the case might not extend to an award of all costs also. Expenses notwithstanding, you won’t be recompensed for the stress it caused you and you certainly won’t ever get back the time you spent on the whole thing!

It is often the case that by the time a dispute arrives to the point of litigation, there has been so much disagreement and acrimony that the issue has usually escalated way beyond the original problem. Emotion can generate feelings of injustice and a desire to impose a moral victory, or not wanting to lose face. This is where a good lawyer is necessary, as they will cut right to the core of the problem and advise solely on the most efficient and realistic solution. That’s what a good lawyer does, I can’t speak on behalf of bad ones!

As a client, you should be aware that the decision on whether to progress with significant legal action is based upon a combination of the following factors (in no particular order):

  • The total monetary value of the claim – smaller amounts may never be worth the cost of certain types of litigation.
  • The potential cost of the action and its implication to the client – can you afford to sustain the action? Is time a significant factor? For example, if the process drags on for years, will this detrimentally affect your business?
  • The relative strength of the client’s case and likelihood of success.
  • The net benefit to the client in the event of a successful outcome.
  • The reality of actually receiving any award from the other party.

When discussing the problem with a lawyer, you must give them a full account of everything that has happened, even if that includes mistakes by you. You are not being judged so don’t present a modified version of events that you believe best represents the situation. You can be sure that if you have omitted anything significant, your lawyer will find out as soon as the other party presents its case, which is not ideal, and may even be too late.

In summary, if you find yourself faced with a decision about legal action, whether instigated by you or as defendant, ensure that you are completely objective and above all, realistic about the best course of action. Ego or emotion will lead you down the wrong path!


Prevention is better than cure

apple copyAs much as I have made a living finding solutions to other people’s problems, I still wholeheartedly maintain that it is better to avoid them in the first place!

It is a little naive to think that in the event of every dispute you can simply take legal action, and justice will be swiftly done. There are more factors in play than just the letter of the law and due process. In reality, civil disputes can be a complex combination of skill, knowledge, funds, time… and of course evidence. Not everyone has an entirely favourable combination of all these.

There are some reasons for litigation that cannot generally be foreseen or avoided, for example non-payment of debt, goods unfit for purpose or some other material breach of contract. However, many legal disputes arise, or escalate simply through misaligned expectations that are usually a result of poorly organized pre-contract discussions, an inadequately defined contact or subsequent miscommunication.

This is something that can be prevented with foresight and careful monitoring. Remember that the written contract is sometimes only part of the binding agreement; in some situations your earlier discussions and working relationship can also form evidence of what has been agreed by implication, or action between the parties.

Below are some general guidelines to prevent future misunderstandings.

  • Have all your pre-contract discussions documented; in the event of disputed evidence, they may be used to establish the intention of the parties.
  • Still in the pre-contract stage, draw attention en-route to elements that change or progress from earlier discussions, and clarify these markers.
  • Make all your requirements to be included in the final agreement clear and in writing. Get responses from the other party to ensure they have received, and understood, your message.
  • Don’t ignore any element simply because it appears small or unclear, or you feel that it isn’t relevant. The other party might feel that it is!
  • Have a well-structured and clearly worded contract drawn up. If you are engaging a professional in a particular field, the terms of a standard form agreement may apply – make sure you also know what this contains!
  • If the contract refers to supplementary documentation, make sure the reference is correct and clear and that you both have the same copy. On-going discussions over months can lead to many revisions and it is easy to loose track of which one is in force.
  • Be aware of your exposure in the event of early cancellation or breach of contract by either party.
  • Look for early signs that the other party maybe veering away from your expected delivery or performance, and draw attention to this immediately. Passive acceptance of a change could be deemed as explicit acknowledgement.