It is very rare that defense attorneys share their total fees and costs publicly. Indeed, you will not likely find many defense attorneys promoting the total cost of defense, which is likely because a quicker settlement is typically cheaper, less intrusive into private matters, and much less interruptive of business operations. The best civil defense attorneys will counsel their clients on all these factors as well as the cost to defend a case through trial.
What is the average cost to defend a civil lawsuit?
Best Employment Lawyer Answer: While understanding hourly defense rates (typically from $250 to $650 per hour) is important, the bigger picture is what will the overall cost of defense be when the case ends. Obviously, this will be dependent on the number of hours of work and the length of time the case is pending. Hiscox, an business insurance company, evaluates and reports on the costs of cases handled under its policies in its Hiscox Guide to Employee Lawsuits. Hiscox reports that the average cost to defend an employment claim through settlement is $160,000. But there are two important caveats. First, this average includes nominal cases that were settled very quickly, and thus, has a very de minimis cost that brings the average down. Second, it is important to understand that the fees charged by insurance defense counsel (the subject of the Hiscox information) are typically 20 to 25 percent lower than when a private employer hires counsel directly because insurance defense attorneys provide discounts as part of a bulk representation rate. With this in mind, hiring defense counsel directly would bump the average for this time range up to about $200,000.
Way back in 2013, defense attorney John Hyman’s Ohio Employer’s Law Blog reported that it costs employers a lot to defend the case:
The reality is that defending discrimination or another employment lawsuit is expensive. Defending a case through discovery and a ruling on a motion for summary judgment can cost an employer between $75,000 and $125,000. If an employer loses summary judgment (which, much more often than not, is the case), the employer can expect to spend a total of $175,000 to $250,000 to take a case to a jury verdict at trial.
What are examples of litigation defense costs?
Best Employment Law Attorney Answer: A recent race discrimination case against the Arizona Senate provides a good example. Because the defendant is a public entity, the costs of defense were available as public records. The employee, Talonya Adams sued in 2016 after she was wrongfully fired for complaining about race and gender discrimination resulting in significant pay disparities. The employer opted to defend the case through trial (as well as a second trial on a limited issue). The trial did not go well for the employer, who was found by a jury to be guilty of unlawful discrimination and liable for $2.75 million. However, due to damage caps under Title VII of the Civil Rights Act of 1964, the award will be reduced to $300,000. The real problem comes is that the employer spent $415,000 to pay its attorneys to defend the claim. To be clear the employer spent significantly more than it could have ever hoped to save by defending the action.
The choice to spend to defend becomes even more disparate when considering that the Equal Employment Opportunity Commission (“EEOC”) reports that the average cost of an out of court discrimination case is $40,000 and the average cost of an out-of-court harassment claim is $50,000.
Additionally, because courts have awarded fees in some cases, we can provide recent and real examples of how much it cost to handle a civil case through trial.
- In Perez-Sosa v. Garland, 22 F.4th 312, 319 (1st Cir. 2022), a Title VII case against the United States Attorney General’s Office, there were $170,331.56 in attorneys’ fees.
- In Nichols v. Longo, 22 F.4th 695, 697 (7th Cir. 2022), another Title VII case, there were $774,645.50 in attorneys’ fees and costs.
- In Sullivan v. Experian Info. Sols., Inc., No. CV 16-11719-MPK, 2022 WL 392848, at *14 (D. Mass. Feb. 9, 2022), there were $219,275.00 in fees and an additional $2,310.73 in costs.
- In Thomas v. Hughes, No. 20-50671, 2022 WL 620238, at *1 (5th Cir. Mar. 3, 2022), there were $163,644 in attorneys’ fees.
- In Krause v. Kelahan, No. 6:17-CV-01045, 2022 WL 306365, at *4 (N.D.N.Y. Feb. 2, 2022), there were $130,186.31 in fees and expenses.
- In Gulino v. Bd. of Educ. of City Sch. Dist. of City of New York, No. 96 CIV. 8414, 2021 WL 6105564, at *5 (S.D.N.Y. Dec. 2, 2021), report and recommendation adopted, No. 96-CV-8414 (KMW), 2021 WL 5866486 (S.D.N.Y. Dec. 8, 2021), a Title VII case, there were $2,993,200.66 in fees and costs.
- In Alozie v. Arizona Bd. of Regents, No. CV-16-03944-PHX-ROS, 2021 WL 5578858, at *4 (D. Ariz. Nov. 30, 2021), a Title VII case, there were $189,519.00 in fees reported.
- In Vega v. Chicago Park Dist., 12 F.4th 696, 701 (7th Cir. 2021), a Title VII case, there was $1,006,592 in fees.
I suspect that many will argue that I cherry picked several cases with high figures, but I spent 30 minutes searching for federal cases that addressed the award of fees and picked the most recent. I further suspect that some will argue that a few cases have abnormally large fees, which I agree. It would be unreasonable to point to an average of these cases being $734,398.22. However, I respectfully submit that none of the abnormally high fee cases knew that they were going to be the abnormally high fee cases when the case started. And, in case you are wondering, the median fee is in the $170,000 to $220,000 range, which is still lower than the range that Mr. Hyman estimated about a decade ago.
Lastly, none of this includes the costs of appeal, which will likely tack on another $50,000 to $70,000 in fees and costs.
What percentage of civil lawsuits settle before trial?
Best Ohio Employment Rights Lawyer Answer: It is difficult to find a lot of information about the cost of litigation through trial because very few civil cases are actually tried to conclusion with the most recent statistics show that 97 percent of civil cases will end with a settlement before trial. Quite frankly, I view that number as being very low. For example, Spitz, The Employee’s Law Firm handles approximately 2,000 employment cases per year (filing more federal lawsuits than the EEOC). On average, the Spitz firm will try approximately two to three cases per year, which is about 0.15 percent of cases. This is not for lack of trying as these attorneys love to try cases to juries. The reality is that at some point during the case, a defendant’s employer decides that it has had enough and wants to get reasonable about a settlement. It could be early in discovery or while the jury is walking into the courtroom.
This is not to say that all lawsuits should be settled regardless of merit, but almost all lawsuits have some merit – regardless of what the employer’s perspective is. Both sides will have evidence. Both sides will have arguments about why the other is wrong. But most importantly, both sides have risk.
So at some point, for a variety of different reasons, decades of statistics demonstrate that a settlement will be reached. The only question really is at that point, how much was wasted paying to defend the case up to that point.
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