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Labor & Employment Law

How Much Do Lawsuits Cost?

By Eugene Lee (index)

People in the US love to rail about the fact that there are too many lawsuits, too many greedy plaintiffs gaming the system, too many people refusing to take responsibility for their own errors. Numerous websites have sprung up that have dedicated themselves to poking fun at stupid lawsuits.

But I’ve always wondered this about lawsuits — they are VERY, VERY expensive to bring, so where do all these greedy plaintiffs with frivolous lawsuits get the money to finance them? Do they really have $10,000 lying around to just throw away in a bid to waste everyone’s time, including theirs? Because $10,000 or so is probably the minimum it takes to bring a lawsuit nowadays.

In Los Angeles Superior Court in California, these are some of the costs typically associated with a lawsuit (in case you’re interested, here is the full LASC civil fee schedule ). Note, the costs are going up all the time thanks to inflation:

1. Complaint filing fee : $320. You pay this to the Court at the initiation of your lawsuit. When the person you’re suing first appears in Court, he too has to pay the same fee as their "first appearance fee".
2. Motion filing fee : $40. Unless you or your lawyer are near the courthouse, you may have to pay a third-party attorney service company to file your motion with the courthouse, or fax-file it for you. That’s another $50 to $100 per motion depending on your rush. There is no way to predict how many motions you will need to file in your lawsuit.
3. Depositions : $1,000 to $2,000 per day. If you want to interview witnesses, you might be able to meet them informally and get their written declarations/affidavits for the price of a cup of coffee. But in many cases, you will probably have to formally "depose" them. That means serving a deposition notice/ subpoena on the witness, scheduling a time that’s convenient for the witness, the defendant and their attorney, and reserving a court report who can officially transcribe the proceedings. Reporters can charge $1,000 or more per day. You might also need to videotape the witness. If you’re not able to do it yourself, you will need to hire a certified videographer. That’s another $1,000 or more per day. If you need an interpreter for the witness, that’s an additional cost.
4. Copies : If you need to obtain documents from the defendant to prove your case, in many cases you will need to hire a bonded copy shop to bring their scanners/copiers to the place where the documents are located, and make copies for you. They can charge a setup fee ($200 or so) plus a per page charge (10 to 40 cents per page).
5. Experts : Many lawsuits require you to hire an expert who can testify in court about topics that are outside the knowledge of the everyday person. Experts can include engineers, psychiatrists/ psychologists, economists, physicians, human resource experts, accident reconstructionists, etc. Experts don’t come cheap, they can charge anywhere from $200 to $400 per hour or even more.
6. Appeals (if necessary) : The filing fee for an appeal is roughly $700. You may also need to ask the court clerk to prepare a record for appeal that can cost hundreds more. If you need a written transcript of a court hearing to support your appeal, the costs varies widely but can be as much as $1,000.
7. If you lose : If you lose your lawsuit, you will likely be on the hook for the costs of your opponent, which includes all of the above and more. If you’re particularly unlucky or your lawsuit is frivolous, the court could force you to also pay your opponent’s attorney fees. That bill can be astronomical given attorneys charge in the range of $200 to $1,000 per hour.

If you’re lucky, you won’t be paying any of the above costs yourself. Many lawsuits are funded by the lawyer, not the plaintiff. These are so-called contingency fee arrangements where the lawyer pays some, most or all of the costs and fees associated with the lawsuit and invests their time without charging the plaintiff. In return, the lawyer takes a percentage of the recovery from the lawsuit if you win (but they get nothing if you lose). So the lawyer ends up assuming most or all of the financial risk of the lawsuit.

In most cases, contingency fee lawyers aren’t going to want to invest their time and money into a case that’s frivolous. If they did, they wouldn’t be in business for very long.

So who’s funding all these frivolous lawsuits that are weighing down the US economy, clogging up our courts, burning up (lots of) cash, and wasting everyone’s time? Because I sure am not nor is anyone else I know.

If you’ve got a viewpoint on this, I’d be interested in hearing from you in the comment section below. I imagine defense lawyers would have a lot to say on this topic.

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Full post as published by California Labor and Employment Law on September 26, 2008 (boomark / email).