Counting The Cost

by Murray Armes

Litigation has always been expensive but the signs are that it is becoming increasingly so. A survey conducted by the US Chamber Institute for Legal Reform and others¹ showed that costs were increasing at a faster rate than increases in hourly rates. In the UK cost budgeting introduced by the Jackson Reforms has made participants more aware of the need to control costs but it is too early to say whether this has reduced them². Things are little better with international arbitration where both delay and costs appear to be rising_³. The costs of litigation, and by implication, arbitration, also have a wider impact (some say they do actual economic harm) to society as a whole as a larger part of company budgets, resources and productivity are invested in litigation rather than productively in research, capital investment and market development⁴ . Anything that might help to reduce both the actual and consequential costs of disputes must be beneficial…