Costs of Litigation

It’s never cheap, with actual costs varying from case to case. The most significant factors on the cost of litigation are the level of conflict, the complexity of the case, and, of course, the attorneys’ fees.

As a guide, the average litigated divorce in California costs $45,000 per party. Litigation of other types of family and relational disputes may be more or less expensive. But in any litigated case, much of the expense will be attorney costs for discovery, research, witness preparation, depositions, interrogatories, motions, conferences, trials, subpoenas, appeals, and time waiting outside courtrooms.

These costs are negligible or non-existent when using mediation. Indeed, the total cost of settling your case through mediation — including the costs of consulting attorneys and other professionals for their specific expertise — is typically between one-quarter and one-tenth of the cost of settling through litigation. A complete settlement by mediation, in most cases, will cost less than a single day in court. And the costs of mediation are shared between the parties. The figure below compares the accumulation of costs for litigated and mediated disputes.

Mediation versus Litigation

During mediation, the parties may each consult separate attorneys to provide legal advice as necessary between mediation sessions. Their attorneys will also review any settlement before the parties make it legally binding. Other professionals such as CPAs and business appraisers may provide independent information too. All told, mediation entails much less attorney time than parties incur when they litigate their dispute. And further reducing the cost of mediation, the mediator’s hourly rate is shared by the parties.

The costs of litigation follow a steeper and more lengthy trajectory. Attorney costs accumulate rapidly in the complaint-and-answer phase. During this phase, both sides try to establish the boundaries of the conflict, sometimes filing a countersuit if a common view of the dispute isn’t achievable. Costs then accumulate steadily through the discovery phase with expenses such as research, review of interrog-
atories, and deposition of witnesses. After an often protracted discovery phase, costs escalate again, this time for trial preparation, case presentation, and settle-
ment conferences with the judge and opposing counsel.

Indeed, when parties pursue litigation, 90% of cases end in a negotiated settle-
ment, often just days or hours before the case is scheduled for trial. This decision to settle pre-trial usually coincides with the parties’ realization that most of the issues that they’ve been contesting — for example, the amount of child support and the division of property — are set by a judge according to predetermined formulas. Almost invariably, the parties would have saved tens of thousands of dollars if they’d instead settled through mediation.

The enormous cost of litigation threatens the financial security of most parties in divorce, family, and relational disputes. Unlike the assets of giant corporations, your personal assets are limited. A litigated settlement may leave you both financially as well as emotionally depleted with little left in your estate after pay-
ment of attorney fees.