Litigation-You Can Lose for Winning

Prevention-You Can Win for Planning 

Despite several cases that have been successfully litigated in whole or in part in the last few years by Jeanne Hall, even with the biggest of verdicts (a multimillion dollar residential construction verdict for the Owners in another County in NC recently), sometimes winning can be more costly than the amount that can ultimately collected, even with the NC Home Owners' Recovery Fund.

Almost all litigation is preventable, and costs from a few hundred to a few thousand, as compared to the tens or hundreds of thousands that it will cost to litigate. This is especially true in business and construction law. With a competent attorney who understands and has been successful in risk management, risk shifting, strategic thinking and planning, and the many tools that can be used to prevent risks, probably more than 95% of the costly cases can be avoided.

The first thing to do is to determine whether or not you are dealing with someone who is honest, competent, fair, and who has strong communication skills. We are all dupped on occasion by those with whom we wish to work, even attorneys who understand and provide effective risk management services for their clients. One key thing to look at is the pattern of behavior of the other person or company, as well as the lasting relationships that they have. Any successful person cannot and will not have avoided burning some bridges because as we all know, if you try to please everyone, you are sure to fail. However, if the other person or company has a history or pattern resulting in questionable outcomes, you may want to did deeper before you dive in. if you do not do this, as in a construction case where you have limited funds and a high risk if a contractor does not perform or it is a scam, then you are voluntarily assuming the risk of having litigation as your only option. Even with a huge verdict, it may not be collectable if the contractor has no assets. Remember, a deal with a person who is morally bereft or a company who has questionnable business practices, will one of those that will likely go to litigation and litigation (and arbitration in NC in most cases) is a lose-lose situation.

If the other person or company has passed the first test, the next thing is to find an attorney who not only understands the subject matter of what you are doing, but who has extensive business expertise and education (as well as some personal success). Law school does not teach common sense or strategic thinking, it teaches the law and critical thinking within the confounds of the law. The greater the risk exposure that you have if everything fell apart in your business situation, the greater the need for an attorney who looks at and practices law from a true business perspective. While an MBA is great, having true entreprenuerial experience and success is an even better indicator of how helpful an attorney, especially as to business or any strategic planning matters, will be to you.

This attorney should also be realistic and have strong communication skills. Just like a tutor in algebra, if the attorney cannot have the situation make sense to you (fairness should not be expected, realistic "sense" should) then either the attorney is not the one for you or you may be out of your league in terms of the business deal you are considering. Some attorneys want to have as many billable hours as possible and some attorneys want to have as many successful preventive plans for their clients as possible, and for those with a conscience, the latter lets one  sleep much better. So, the attorney should not only be an effective communicator, he should be focused truly on your best interests, which are much more extensive of a service than just your legal rights and obligations. While it initially appears that these latter types of attorneys may be working themselves out of a job, in effect they are creating a positive and productive atmosphere which will bring in those clients with whom it is a pleasure to work and serve.

The risk managment prevention strategy is extremely complex, but it is practical and flexible. This is not taught in law school. It is attempted in business school, but unless the attorney is both big picture person who can and does pay attention to detail when needed, not all important factors may be considered in the planning and subsequent stages. 

For instance, there are many contracts out there in the construction industry that are drafted by people who do not even know or understand substantive construction issues that have nothing to do with the law and sometimes they do not even know the law. We have seen contracts drafted for an owner by her attorney, and the entire document was drafted in the favor of the contractor. The opposite is true as well. The same thing as true to medical and other professional practices, real estate developments and syndications, employment matters, and so much more. The bottom line is the attorney that you need must be a successful business planner and strategetic planner, must have a level of competence and knowledge as to teh subject matter in the business, must understand all risk management principles and tools, must be a strong communicator, and should be a strong attorney on the most important legal issues, including how they play out in the courts.

NC is much different than other states as to issues related to attorneys' fees and certain costs, and you may win a $250,000 breach of contract suit, but may have expended (depending on the complexity of the case, how high maintenance the client or the other party or their attorneys are, and the logistical problems with the court) more than half of that in attorneys' fees, depositions, discovery costs, service and filing fees, expert fees, etc. Then you have to collect it and that takes time, money and if the other party does not have the assets, well you have a wonderful judgment earning 8% interest, but it is uncollectable. Then of course, you may get mad at your attorney, but the reality is that you could have avoided all of this by doing by taking these things seriously up front and spending a little money to prevent these problems before they can ever be issue.

There is no perfect preventive tool or plan, but there is no doubt that you will certainly save money if you do not act in a proactive and common sense matter, especially if you are risking a lot of money, all of your assets, or you are being exposed to liabilities that could be huge. An ounce of prevention...........

At Plowden Hall, our goal is to never have another case in litigation or arbitration again in the not so near future because our clients will have elected to take an ounce of prevention. We can make a lot of money on litigation, but then we would be compromising everything that we stand for, both as individuals and as professionals.