Tag Archives: litigation

The Price of Litigation: When Winning Comes at a Cost

$1.7 million. That is the staggering amount a Singapore-based couple spent on legal costs last year to decide where their divorce should be heard, as well as litigation costs associated with their two year-old son. The British judge presiding over their case called their case a "story of human tragedy", saying that the warring couple were committing “financial suicide” by not resolving their differences. “London High Court Justice James Holman said it was “tragic” that the couple had not concentrated on a ‘straightforward matter of how much to provide for the wife and son’. Instead, ‘so much firepower’ has been directed on the issue of where the divorce case should be heard.” The lawyer husband and anaesthetist wife could not compromise, and the judge noted that their “sustained forensic struggle throughout the hearing was painful to observe”. Described by the judge as “highly intelligent, very well-educated, energetic, successful and ambitious professional people”, the couple committed nearly one-quarter of their wealth to a “highly charged litigation and an atmosphere of intense emotion day after day in the courtroom”. Despite ruling in favour of the mother - which meant the divorce case would be heard in the English courts - this example just highlights how a win in court is rarely a 100% victory. Consider another example cited in a recent article on cost recovery in commercial disputes. Stamford Law Corporation’s Timothy Cooke explains how “a plaintiff successfully brought defamation claims in the Singapore High Court and was awarded S$210,000. It cost the plaintiff over S$1.1 million to prosecute the case at trial and on appeal. He was awarded S$250,000 in costs, leaving him over half a million dollars out of pocket.” Given how high legal costs can soar, sometimes to well over the claim amount, the winning party may still end up dipping into their own pockets to cover the cost of the litigation. Deputy Attorney General at the California Department of Justice Vincent DiCarlo sums it up perfectly when he describes litigation as a “bloodless war played by rules - expensive, exhausting, and generally out of control.  It should be avoided whenever possible.” He argues that a contractual alternate dispute resolution clause, carefully used in commercial contracts, can have a dramatic effect on how businesses resolve disputes with employees, customers, vendors and other stakeholders by discouraging claims from being brought, and limiting exposure to large damage awards. Mediation is one such alternative dispute resolution method. Choosing to mediate first when a dispute occurs has proven to make good business and financial sense, not least because it saves all parties time and money (offering a 60 to 75% settlement rate in the fraction of the time and money it takes to go to court), but also a rapid settlement (most clients settle within a full day of mediation or within 10 hours, not including the time taken to collect external data or for additional investigations). Dora Yip, HMG Research Associate