30 Sep How Much Will it Cost to Sue Under Rule 16.1?
In our last three blogs Edwards Law discussed the new mandatory Rule 16.1 now governing how cases are litigated in Colorado — major changes to expect, how to prepare for the changes, and the types of cases that are conducive to 16.1 litigation. In this blog we address how much litigation could cost under the new mandatory Rule 16.1.
Goal of Rule 16.1 is to Cut Down on Litigation Costs and Time
As stated in our prior blogs, the idea behind Colorado Rule of Civil Procedure 16.1 or Rule 16.1 is to provide a more streamlined process for litigating cases worth less than $100,000. The Rule accomplishes this by extremely limiting discovery and the time frames for deadlines leading to trial. Limited discovery and expedited deadlines are not good for complicated cases, but if you have a straightforward case with little need for discovery, the new mandatory Rule 16.1 could have the effect of keeping your litigation costs down and making the process of suing more attainable for the small business owner.
What Should I Expect to Pay in 16.1 Litigation?
Because the mandatory procedures of Rule 16.1 will typically only be helpful in simple cases that do not require a lot of discovery, you can expect to pay a lot less to pursue 16.1 litigation.
Prior to Rule 16.1 being mandatory for most cases, a typical litigation with a fair amount of discovery could cost you close to $100,000. Here is just a sample breakdown of the costs you might incur if you were a commercial landlord suing your tenant for a breach of contract claim worth $60,000-$90,000:
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SAMPLE LITIGATION BUDGET, BEFORE RULE 16.1 BECAME MANDATORY
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| Client: | Commercial Landlord | Sr. Attorney | Lit.Paralegal | RUNNING | ||||||||||
| Matter: | Landlord v. Tenant | Fees | SUB TOTAL | TOTAL | ||||||||||
| Rev. Date: | Rate | $300 | $90 | |||||||||||
| Case Assessment, Development, and Settlement Offers | ||||||||||||||
| Fact Investigation | 2 | 0 | ||||||||||||
| Analysis and Strategy Development | 2 | |||||||||||||
| Settlement Offers and Final Demand | 3 | 0 | ||||||||||||
| Documents and File Management | 4 | |||||||||||||
| TOTAL HOURS | 7 | 4 | ||||||||||||
| TOTAL COST | $2,100 | $360 | $0.00 | $2,460 | $2,460 | |||||||||
| Pre-Trial Pleadings and Mediation | ||||||||||||||
| Initial Pleadings (Answer & Counterclaims) | 8 | 2 | $376.00 | |||||||||||
| Responsive Pleadings (Answer to Counterclaims) | ||||||||||||||
| Service of Process and Filing Fees | $300.00 | |||||||||||||
| Required Meet and Confer with Opposing Counsel | 2 | |||||||||||||
| Case Management Conference (CMC) | 5 | |||||||||||||
| Case Management Order (CMO) | 2 | 1 | ||||||||||||
| Notice to Set Trial | 1 | |||||||||||||
| Filing Fee for Case Management Order | 0.5 | $13.50 | ||||||||||||
| Prepare Confidential Mediation Statement | 8 | 3 | $0.00 | |||||||||||
| Prepare for and Attend Mediation | 10 | 2 | $2,200.00 | |||||||||||
| Prepare for and Discuss Settlement | 3 | |||||||||||||
| Dispositive Motions (Mtn Jgmt Plding/Mtn to Dismiss) | 12 | 3 | ||||||||||||
| Filing Fee for Dispositive Motions | 0 | 0.5 | $13.50 | |||||||||||
| TOTAL HOURS | 50 | 13 | ||||||||||||
| TOTAL COST | $15,000 | $1,170 | $2,903.00 | $19,073 | $21,533 | |||||||||
| Disclosures and Discovery | ||||||||||||||
| Initial Disclosures (Rule 26(a)) | 5 | 2 | ||||||||||||
| Written Discovery | 15 | 3 | ||||||||||||
| Document Production | 5 | 3 | ||||||||||||
| Expert Witnesses – Interview, Prepare Disclosures | 15 | 4 | ||||||||||||
| Depositions – Preparation and Conducting | 30 | 5 | ||||||||||||
| Discovery Motions | 8 | 2 | ||||||||||||
| Other Discovery | 0 | 0 | ||||||||||||
| Discovery Cutoff | 0 | 0 | ||||||||||||
| Amend Pleadings (new claims or parties) | 5 | 2 | ||||||||||||
| Respond to Amended Pleadings | 0 | 0 | ||||||||||||
| TOTAL HOURS | 78 | 19 | ||||||||||||
| TOTAL COST | $23,400 | $1,710 | $0.00 | $25,110 | $46,643 | |||||||||
| Pre-Trial Motions | ||||||||||||||
| Other Written Motions and Submissions | 8 | 2 | ||||||||||||
| Prepare for and discuss settlement | 5 | |||||||||||||
| TOTAL HOURS | 13 | 2 | ||||||||||||
| TOTAL COST | $3,900 | $180 | $0.00 | $4,080 | $50,723 | |||||||||
| Trial Preparation and Trial | ||||||||||||||
| Trial Management Order | 10 | 2 | ||||||||||||
| Finalize Witness List | 8 | 1 | ||||||||||||
| Finalize Exhibits | 8 | 4 | ||||||||||||
| Jury Instructions | 15 | 6 | ||||||||||||
| Prepare Opening and Closing Statements | 15 | 2 | ||||||||||||
| Prepare Fact Witnesses | 10 | 4 | ||||||||||||
| Prepare Expert Witnesses | 15 | |||||||||||||
| Written Motions and Submissions | 20 | 4 | ||||||||||||
| Other Hearing and Trial Preparation and Support | 20 | 15 | ||||||||||||
| Trial and Hearing Attendance | 20 | 10 | ||||||||||||
| Post-Trial Motions and Submissions | 8 | 4 | ||||||||||||
| Enforcement of Judgment | 8 | 15 | ||||||||||||
| TOTAL HOURS | 157 | 67 | ||||||||||||
| TOTAL COST | $47,100 | $6,030 | $0.00 | $53,130 | $99,773 | |||||||||
As you can see, the costs of litigation could likely exceed the amount of recoverable damages. This type of litigation would not make sense unless you had a provision in your lease that allows you to collect your attorney fees against the tenant if you win your case. However even then, you are rolling the dice because there is never a guarantee of winning, and you could potentially be on the hook for paying your tenant’s fees if you lose.
Under the new mandatory Rule 16.1 procedures, the costs of a Case Management Order, a Case Management Conference, most discovery and discovery-related motions are eliminated, cutting the costs of litigation by more than a third. This means the sample litigation budget above would total more like $60,000, if the case goes to trial (most cases don’t go to trial because the parties settle, or one party wins a dispositive motion which disposes of the case).
If you and/or your company are on the fence about filing a lawsuit because of fees and costs, you should consider speaking with an attorney about a litigation budget and how the new mandatory Rule 16.1 could reduce the costs of filing suit. Contact Edwards Law today for help in determining whether a lawsuit makes sense under the expedited procedures and if so, how to do it. The first call is complementary.
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