In the article My Response to the ABC District BOD Letter Regarding the ASC Settlement / Part 2 of 3 I posited some cost/benefit reasons why ABC District et al decided to settle vs going to trial.
Recently I came across a video blog by David Freiheit – a Quebec based lawyer that does video blogs on legal matters. In the following video blog he discusses the implications of suing people and going to trial along with what that costs both in money and mental health.
A word of warning – David’s a fast talker.
When David practiced law he charged $250 / hr or $2K / day. The standard charge-out for a trial is one day of prep for every day of proceedings, even for cases that required more time for prep.
Looking at the LCC / ASC case, if one assumed the defence had 3 lawyers and planned to present 3 months of testimony, that would be 60 business days of trial time. Now add 3 weeks or 15 days of testimony by the ASC, and you’re up to 75 days of trial time.
3 lawyers = $6K / day.
75 days * $6K / day = $450K just for lawyer costs while at trial.
Now double that to include prep time:
2 * 75 days * $6K / day = $900K.
Now add on costs for researchers, clerical filings, court fees, expert witnesses, and the like, and one can see that settling for ~$500K in fines and $100K in costs to end a case that’ll cost north of $900K to try was a better result than if the case was fought and lost.
Another benefit ABC District got by settling was they avoided the discovery process with its attendant risk of unflattering facts coming to light and being used against them in the upcoming representative action.
What does this mean?
Consider the case of Nicholas Sandmann vs CNN where Nicholas sued CNN for defamation after CNN made some unfounded comments about Nicholas pertaining to his confrontation with Nathan Phillips on the stairs of the Lincoln memorial .
CNN settled the defamation case for an unknown about of money and in so doing they stopped the case. They also avoided having to go through discovery – and in the following video David talks about why avoiding discovery is a significant benefit to the defendants in cases like this.