Counting the Costs of Litigation
I'm Max Clark. I'm gonna rant about lawyers, arbitration, and lawsuits. If you are a business and you get into a contractual dispute with another business, what ends up happening? You end up in a lawsuit with each other. If you have not been through litigation ever in your lifetime, I am very happy for you and try to keep that way for the rest of your life.
Speaker 1:If you are a business, it is a matter of time before you're in litigation of some sort. It is just bound to happen. I work for a dotcom. I remember I was standing in the general counsel's office. We were working on PCI compliance and an audit that was going through.
Speaker 1:And while we were there, the general counsel was served with a lawsuit. And and she took it, and she signed it. And and I asked her what was like, what was what was that? You know? And she's like, oh, you know, we're being sued.
Speaker 1:And it was, like, so shocking to me. It was, like, the first time I'd ever seen it happen. I was like, what? It just happened. And she's just like, hey.
Speaker 1:Look. You're not a real business until you're in until you're being sued or you're in litigation. It's probably very it is very true. And, of course, with size becomes more litigation. And when you get to, like, the real real size, then you start just, like, figuring out how to, like, mess with your competitors by, like, antitrust litigation and, like, figuring out what can stick and what you can throw at the wall.
Speaker 1:Anyways, going back around. In the United States, in the legal system here, when you get into, litigation, when you sue somebody or you are sued, you go through lots of phases. And the beginning phases are like lawyers saying nasty letters back and forth and demands and all this crazy stuff. And then you move forward from that, and then you get to, at some point, you're gonna get into discovery, you know, where people are demanding documents from either side in order to go through and try to find evidence of your wrongdoing and that you're evil, terrible, terrible, terrible company and people. And then after discovery, you usually have just dip depositions.
Speaker 1:I mean, they can be happening currently or, you know, the order can flip, and then you have depositions. And maybe and somewhere along that, maybe you have court ordered mediation, where the court's trying to get you guys to get together and talk to each other and, like, figure that and work this thing out before actually getting into courtroom and actually going through trial. And then you have trial. Right? You know?
Speaker 1:And we're you know? And you get the whole, like, you know, unfortunately, it's not Harvey Spector. Right? But, like, you get this whole thing where, you know, you're actually in court and and something happens. And then, by the way, you can get all the way to that point and you can get a trial and you can have a trial and you can have and you can win and you still haven't really won yet because at that point, the other side can still appeal.
Speaker 1:Now there's more technicalities that have to happen. They have to, like, you know, post bond on whatever the, you know, the the the judgment is before they can appeal and then appeal. You can be in litigation for, like, on one issue can be, like, bajillion years. Like, there is no start and end date on some of these things. It's it's actually quite it's exhausting also mentally.
Speaker 1:It's expensive, and it's exhausting. Now I've had the misfortune of being involved in a couple of litigation actions where, you know, we've had to take action against former customers in the past you know, so this is past life issue stuff. And I will tell you that it is expensive. It was expensive and distracting and time consuming for us, and it was expensive and time consuming and distracting for them. And by the time you get into like, you're you're walking into, like you're you're starting to issue discovery demands, and you're starting to, you know, figure out depositions.
Speaker 1:You know, it's like as a rule of thumb, you've probably, like, 50 k into it at this point without even, like, blinking an eye. You know? Like, this isn't, like, even really serious. Like, you've you've just it it costs you $50,000 in legal fees just to get to that point. Like, you've spent $50,000.
Speaker 1:And this is why arbitration becomes so popular in business contracts because arbitration basically gives you a way to not deal with the the court system and, avoid a lot of this nonsense that you deal with. Now what I find really funny when I talk to lawyers about arbitration is usually the first comment that comes out is like, oh, but arbitration is really expensive so you don't wanna do it. Now look, if you're in a situation where you are being sued constantly by a bajillion different entities, arbitration is not probably ideal for you because, you know, more than likely, you're probably footing the cost for arbitration. But this comment around arbitration being really expensive comes from a place of typical arbitration costs. And, you know, if if you've got a good strong arbitration language in your agreement that you that you walk into it, you're probably gonna spend, you know, like, 8 or $10,000 in arbitration per per matter.
Speaker 1:And, yeah, that's expensive. It is expensive writing a thing for $10,000. Now what what's funny about me, this is my you know, it just, like, goes back. Again, previous life, past history, previous companies. Right?
Speaker 1:But, like, let me think here. $50,000 and, like, 6 to 9 months of, like, time versus $10,000 and, like, the thing is done in a month for, you know, an arbitration. Now I don't know what I don't know. So I'm sure that there's lots of I if you can give me examples of, like, what I do not know about with an arbitration where this becomes, like, a horrible scary thing, Please tell me what they are. Send me a message, call me, comment on this video, whatever you found it, and tell me what I'm wrong about with arbitration because I would love to know because I can't figure it out.
Speaker 1:It is cheap to file a lawsuit. It costs a couple $100 in filing fees to go down to the courthouse and file a lawsuit. So, yeah, you know, it is cheap to file a lawsuit, but everything after that point is expensive. There is a business strategy of filing a lawsuit to try to motivate the other party to remedy whatever issue is is out there and and get that taken care of. But the reality is is a lot of times once you file that lawsuit, you're not done.
Speaker 1:You know, it's not like, oh, you know, the other side didn't get this lawsuit and go, oh my god. I mean, sued. Like, quick. Let me settle and give you all the money you want. It's gonna get into the next phase of this thing.
Speaker 1:And as soon as, you know, you get into that next phase, it just gets expensive. So, anyways, I don't understand why people what am I missing here? Like, why is arbitration bad? I'll just leave it at that. I'm Max Clark.
Speaker 1:Let me know. Tell me why is arbitration bad, and, and what am I missing?
