Legal Cost vs. Risk Analysis

By Lisa Thomson

During a divorce you will require legal advice and assistance to divide assets and settle support issues.  I have never heard of anyone divorcing amicably, unrepresented.  However, if your divorce has gone beyond the basic requirements and you find yourself forced to engage in legal matters, then at this juncture, you’ll have to make a tough decision.  Do you continue dwindling your children’s college fund to pay for legal costs or do you defend yourself?  What are your costs and what are you possibly risking by taking either one of these paths?   Either way, you risk a loss and I know from experience it takes a desperate situation to represent yourself.

When my ex-husband decided to continue litigating following our divorce trial I was faced with this very decision.   Do I go into debt in response to the Appeal or do I go ahead and research and attempt self representation?  As I said, desperate situations call for desperate measures.  Unfortunately, a person can find themselves in a similar situation when their adversary has the economic advantage over them.  Did my ex’s economic advantage made it possible for him to exact revenge?  Divorce is often appealed based on a low bar of legal unjust.  (See Divorce Law, Protect or Infect) Rather appeals are often pursued in the off chance a person will get a better ‘deal’.  In other words, everyone has a right to Appeal therefore it is very common to see plenty of them based simply on the dissatisfaction of one party.

Following an expensive divorce trial, I was tapped out financially, as most people are in this same situation.   When I speak with my lawyer about the upcoming Appeal, he states that he will need a $10,000 retainer just to respond to the appeal file.  I am aghast.  He estimates the costs at fifty thousand dollars to defend the trial decision at Appeal.  This leaves me reeling.  I have to make a weighty decision.  I have to look at the cost vs. the risk of continuing on this path.

If you are faced with a similar situation how do you weigh the cost vs. risk?  Firstly, take your worst case scenario, your opponent gets everything he asks for at the hearing.  What does that mean for you?  How much money will you lose?  Secondly, if you have a lawyer how much money will you spend to protect against that loss?  Thirdly, look at the difference in the numbers.  Are you going to spend more money than you are defending?  How much more?  Are you going to spend less than you risk losing?  If so, then perhaps it is worth retaining your lawyer.  Bear in mind that what a lawyer estimates as his costs could end up being much greater.  For example, when your case is an active file you may receive bills from $1,000 to $5,000 just for innocuous work, like a review, or photocopying, or phone calls. These add up quickly.  Also, there are no guarantees your lawyer is going to win your case, so you’ll have to consider the possibility of double losses when you factor in losing your case and spending your savings on legal fees.  Lastly, consider the type of case you have.  Is this a family law case or something else altogether?  If it is your divorce it should be straightforward.  You should have full knowledge of the facts unlike a business lawsuit which would rely on several witnesses and be much more complex.  In other words, if you’re a defendant in a case of which you are knowledgeable, it would make more sense for you to consider self representation.

If you find yourself in a situation similar to mine, and after careful cost vs. risk analysis you must retain a lawyer, how do you know a good lawyer from a bad one?  That is a true challenge since you don’t know for sure until they are working for you.  Here’s my list to get you thinking about it:

A good lawyer cares about your case;  A bad lawyer doesn’t remember your name

A good lawyer explains the risks in your case;  A bad lawyer will tell you he can ‘win’ it for you

A good lawyer is involved in the community; A bad lawyer only has time for self promotion

A good lawyer bills reasonably; A bad lawyer bills out of control and increases their fees without notice

A good lawyer takes action to look out for your best interests; A bad lawyer fraternizes and assists the opposing lawyer

A good lawyer isn’t afraid of going to court; A bad lawyer will avoid court at all costs (usually yours)

A good lawyer listens to your instructions; A bad lawyer does not act according to his client’s     instructions

A good lawyer returns your phone calls within a week; A bad lawyer disappears

A good lawyer is organized and knows how to address a Judge; A bad lawyer forgets documents and makes excuses to the judge

A good lawyer knows the law mostly by rote; A bad lawyer has to constantly look ‘things’ up

I am not a proponent of self representation.  In spite of all the complaints I put forward about lawyers, it is a fact we would be lost without the good ones.  However, if you are talking about risking the value of your home, or RRSP with no guarantee of success, you must conduct your cost vs. risk analysis.  When it comes to legal matters, there will be times you have no choice but to engage as a defendant or respondent even during your divorce.  Since we are talking about large sums of money, it’s a good habit to analyze your own situation, financially and legally.

kick ass articles
image source; Erin Smith Art- used with permission
Copyright 2012 by Lisa Thomson.  All rights reserved.  No part of this article may be used or reproduced in any manner without written permission.  For information or permission to use this article please contact theauthor.
Know someone who would enjoy this post? Share it!
Pin It

2 Replies to “Legal Cost vs. Risk Analysis”

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge