Even If You Prevail In Litigation It Is Sometimes Slow And Expensive

The Decision

A published opinion of the Colorado Court of Appeals was released today in a lawsuit that I have been part of the team litigating actively for eight and a half years (I didn't participate in the briefing of this particular appeal, and I wasn't involved in the earliest parts of the litigation.) 

The main holding of the decision pertains to what documents must be attached to an application for attorneys' fees in a case whether a statutory fee shifting provision favors your client, which will be an important precedent on a nuts and bolts issue faced by lawyers in thousands of cases a year in Colorado. 

Litigation Can Be Slow and Expensive

But, the matter of more general interest to the public is that it provides an illustration of how long it can take to get justice in the civil court system and what it costs just one side in that dispute to do so. The Court of Appeals summarized the situation at the outset:

This case arose out of a property dispute between petitioner, Rita A. Nesbitt, trustee of the Rita A. Nesbitt Trust (Nesbitt), and respondents, Kathryn Y. Scott, Rodney A. Scott, and Vicki K. Scott (collectively the Scotts). The dispute led to protracted litigation, including an action in trespass and private condemnation proceedings, that lasted nearly a decade and involved two reversals by divisions of this court. Ultimately, the trial court awarded the Scotts $400,431.85 in attorney fees and $35,066.25 in costs. Nesbitt mounts two challenges to this award of attorney fees and costs. 

The term "costs" in this context means filing fees, service of process fees, fees to have transcripts made of depositions and hearings, charges for copying, printing and mailing documents (honestly, there isn't much mailing these days although postage used to be a pretty significant item in many cases), mediator charges, and much more than everything else combined, fees paid to expert witnesses such as, in a property dispute/easement/access dispute, surveyors, real estate appraisers, and road construction cost experts. 

The other side incurred costs that may or may not have been recoverable if they had prevailed, for flying the judge and representatives for both parties in a helicopter over the mostly roadless land in Pueblo County that was the subject matter of the dispute to aid the judge in independently and personally evaluating against the filter of dueling experts testifying for each party, whether it was practicable for the land owner that sought access to do so over an alternative access route that was preferred legally.

The Court of Appeals went on to affirm the award of fees to our client in this case (the award does not include fees and costs incurred by the respective parties in the prior trespass litigation) in the amount noted. The judgment in favor of our clients (following a third appeal that affirmed the trial court's final ruling) had come earlier. (There was also a fourth appeal earlier on in the case regarding attorneys' fees that was mutually dismissed as moot along the way when a decision on the merits in favor of our clients was reversed.) The other side also incurred fees of the same order of magnitude, although, of course, not an identical amount.

So, in the end, it took a decade and many hundreds of thousands of dollars spent by the parties, in addition to a much more modest but not entirely insignificant investment of public resources (certainly well in excess of the filing fees paid) by the court system, and some time and inconvenience for third-party witnesses in the case, to get it resolved once and for all. Litigation to collect the fee award is ongoing, and it isn't impossible that the opposing party could try to appeal this favorable Colorado Court of Appeals decision on the fee award to the Colorado Supreme Court. If you consider both side's litigation costs in this case and also in the previous case that led up to it, and also the public sector and third-party witness costs at some reasonable valuation and assign some modest dollar amount per hour to the time that the parties on both sides devoted to managing this litigation, the total societal cost of resolving this property dispute was roughly one million dollars, and that costs continues to accrue.

One of the reasons that civil procedure and litigation process reforms are so attractive from a policy perspective is that solutions don't have to be that wonderful to be a significant improvement. If a proposed reform could have caused this case to be resolved the same way with five years of litigation instead of almost ten, with a combined societal cost of $500,000, instead of something on their order of twice that much, and also had similar benefits in the significant minority of long, expensive civil disputes like it, to be consistently resolved more quickly at less expense, this would be a huge policy win that doesn't seem like it should be outside the realm of possibility.

It is also worth understanding that the fee award in this case was quite moderate compared to what some large law firms in Colorado charge their client. There are firms in Denver that have charged more than this amount to their client for prevailing on a single motion to dismiss in the trial court with no evidentiary hearings, followed by an appeal to the Colorado Court of Appeals, and then another appeal from that decision in the Colorado Supreme Court.

Better funding of the court system, especially at the appellate court level, could make the process move much more quickly and could have trimmed many years off the length of this litigation, but would have only moderately reduced the cost of this litigation.

Were Either Side's Lawyers Stupid?

This also raises another issue for lawyers generally, and it isn't a simple issue of either side's lawyers being stupid or incompetent. The litigation decisions each side had to make at some key junctures of the case were not easy ones with clear answers.

The other side lost their case every early on in the trial court, in 2012, when neither side had incurred even a tiny fraction of the attorneys' fees and costs ultimately incurred. They appealed the decision, and I would be the first to agree that they had every right to do so, and in the short run, they were right, they won on that appeal. 

But, as a result, their client spent seven more years in litigation only to produce exactly the same outcome on the merits, but with a far larger attorneys' fee obligation for their client. If the money had not been spent on litigation, it could have been used to secure non-legal solutions to their underlying problem which was getting access to a parcel of land that they owned. In 20/20 hindsight, the opposing party would have been much better off giving up their legal fight at that point and accepting the trial court's initial ruling against them.

It isn't uncommon that continuing to fight in litigation after an initial setback is ultimately a bad decision, especially when you win on "technical" grounds that don't really go to the merits of your claim. But, it is very easy for even good lawyers and well intentioned clients acting in good faith to underestimate the possibility that a short term win will backfire. 

Moreover, in cases like this one, with a fee shifting statute that applies to the case, the decision making process in evaluating the possibility that a short term win will end up being more costly in the long term tends to get worse rather than better, because each side has a stronger incentive to win on the merits without regard to what is actually at stake on the merits, and this clouds their judgment and makes the right choice harder to determine.

Conversely, sometimes you get get a quick win on the merits for your client that increases the risk that a decision will be overturned by a higher court relative to a slower win (indeed, this is true of almost all quick wins in litigation that don't involve a settlement). If the quick win is later overturned by a higher court, this is usually less desirable for your client in the long run. But, it is very hard to pass up an opportunity for a quick win, because saving time (that has great value apart from the litigation cost related aspect of this) is valuable and this usually reduces litigation cost and expense. Also, appellate outcomes are hard to predict in practice, and most trial court wins are not overturned on appeal, either because they are not appealed or because they are affirmed on appeal.

Finding a way to reform civil procedure and substantive private law to discourage this kind of decision making is a non-obvious matter, which is an important reason that this system is still around after literally hundreds of years of experience with the same basic grounds rules, and many decades of experience with the most pertinent of the very specific civil procedure rules in question.

It would be possible to significantly reduce the time and expense related to collateral fee award disputes, but that is a subject for another day.