Think You Have a Case? Should You Sue? What Are the Costs of Litigation?

The litigation costs are usually the primary factor to be considered when determining whether to pursue a lawsuit. Although some suits are pursued for other reasons than monetary gain, the reality is that if a judgment is unlikely to cover the legal costs, then it is not financially worthwhile to pursue the suit. On the other hand, if the judgment is likely to cover the costs of litigation (and then some), the probability that a settlement with the Defendant will be attained also.

So, litigation costs are very important, and should be calculated earlier on by both the party wishing to pursue a claim and the attorney whom is being asked to pursue the claim on that party’s behalf. These costs generally include court fees, expert fees, deposition fees, reports or other projects, legal research fees, private investigation fees, accident reconstruction fees, etc.

Who covers the expenses?

If the potential costs of litigation are too great for the party to cover, this might prevent that party from pursuing his claim. However, as is common with most Personal Injury attorneys/firms, the party can contract with his or her attorney to cover the expenses and, in some instances, reimburse those costs if the claim results in a settlement or judgment that is enough to cover such expenses. This type of arrangement is quite common in a contingency fee agreement. The Supreme Court Rules of Kentucky allow a firm or attorney to forward all litigation expenses and either require or not require repayment of said expenses.

In the event the attorney cannot cover the case expenses either, that attorney should generally refuse to take on the case, since accepting it would result in a disservice to the client and a disadvantage to the attorney.

Does the other party ever cover the costs of litigation?

The General Law in the United States is that the loser in a case will not be forced to pay for the other party’s costs of litigation, except under special circumstances. The two main circumstances are when the parties contractually agreed that the loser pay for these costs, and where there are specific statutes in place that allow for the recovery of litigation costs (e.g., where a party committed a malicious and willful wrong against the public good).

In contrast, Kentucky statute provides that a successful party in any action shall recover his costs unless otherwise provided by law. However, it goes on to state that “[s]uccessful defendants who are necessary nominal parties shall not recover their costs and each party will pay their own expenses, [while] successful defendants who are not necessary parties will be awarded their costs.” Furthermore, the court has the discretion to award costs in actions between partners, tenants-in-common, joint tenants, settling of estates and partnerships, and enforcing trusts. KRS 453.040.

In Kentucky, the costs to be awarded include filing fees, fees incident to service of process and summoning of witnesses, jury fees, warning order attorney and guardian ad litem fees, costs of the originals of depositions, fees for extraordinary services ordered by the court to be paid, and other such costs as are ordinarily recoverable by the successful party. C.R. 54.04. It is important to note that this does NOT include Attorneys Fees.

Balancing the risks of Litigation

The pursuit of a claim will always involve some risks due to the litigations costs. If you have a claim, and are unsure about whether the costs of litigation outweigh the potential of your claim, consult an attorney before making this determination on your own. A good attorney will be able to judge the risks and balance them against a successful outcome. If you are located in Northern Kentucky, contact an attorney at Lawrence & Associates Accident and Injury Lawyers, LLC for a free consultation.