Managing dissatisfied litigants

1 August, 2010
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Clients who are dissatisfied litigants can cause practitioners grief unless they are managed well.

Practitioners know that unhappy clients are less likely to pay them and more likely to sue them.

In the commercial litigation area in the past four years, the categories that accounted for 30.4 per cent by cost and 40.3 per cent by number of claims were:

  • sue for costs/counterclaim negligence or personal costs order; and
  • dissatisfied litigant.

In both categories the clients are unhappy with the outcome of the litigation. In the first category they refuse to pay their bill and then allege negligence when the firm sues for its money. In the second case, the client makes a complaint or brings a claim after an unsuccessful (in their eyes) judgment. Practitioners will know these clients as “the client from hell”.

These clients are often not managed well by their lawyers. In most instances the practitioner involved says after the claim is made that they knew “that client was trouble right from the start”, but they took them on anyway and did not do enough to manage the client and the situation.

What does a dissatisfied litigant look like?

Many litigation practitioners will recognise the scenario that follows and recognise clients, past and/or present, in it:

  • You take instructions to act for a client who has fallen out with their previous solicitors and who has a deadline looming, whether it be a trial date or other interlocutory date.
  • It takes some time to get access to the file and relevant documents and when you do, you realise that the client’s claim is flawed and/or inadequately prepared. It seems the client did not like the advice they had received from the previous solicitor on prospects of success and had not paid outstanding fees.
  • The client is hard to contact, reluctant or unable to pay disbursements and gives inadequate instructions, thus repeating previous bad behaviour.
  • The client becomes anxious and concerned about all the money spent to date which seems to have achieved nothing.
  • Counsel is briefed and he advises the client that the position is hopeless and/or that further (usually expensive) investigations are required to ferret out some evidence to support the case. You both warn the client of the cost consequences of proceeding.
  • A walk away offer is made by the other side. You recommend acceptance. The client insists on proceeding. As the trial date approaches, your requests for funds in trust to pay for counsel’s fees seem to fall on deaf ears. A week before trial the client eventually contacts you to say they cannot afford counsel’s fees. You agree to carry those disbursements after the client again refuses to make a settlement offer.
  • You drop everything else to get the matter ready for trial. The trial starts and you again recommend settlement. After a disappointing day in court and some comments from the Bench about the problems the client faces, you are instructed to settle on best possible terms.
  • You render an account which is not paid and shortly thereafter you get a letter from the Legal Services Commissioner. A complaint has been made about costs, your firm’s alleged failure to adequately prepare the case and it is alleged that the client was forced to settle.

You have taken instructions from a desperate client and put as much time and effort into the case as the client’s limited resources and your goodwill would allow. Now further time and money will be incurred responding to the commissioner and attempting to recover costs.

As the outlined scenario shows, these D-grade clients take up a lot of your time and energy, create much angst and offer little in return.

“D” characteristics

These clients all have “D” characteristics and might uncharitably be called “D-grade” clients.

These characteristics include that they:

  • are Dissatisfied;
  • are Desperate/Destitute;
  • are in Dispute with their previous solicitors;
  • have Deadlines looming;
  • have Dubious or Difficult claims; and
  • often have their matters Delegated by the firm to a junior lawyer.

Often these cases are delegated to more junior practitioners in the office because from a financial perspective they are virtually pro bono matters. The junior solicitor sometimes ends up “chasing rabbits down holes” because they do not know how to say “no” to a client or are reluctant to give them bad news. Some clients will manipulate or browbeat less experienced operators.

As the outlined scenario shows, these D-grade clients take up a lot of your time and energy, create much angst and offer little in return. Contrast that with the A-grade client who gives you clear instructions, pays your bills on time, appreciates your time and effort and gives you repeat work.

Client selection is the first – and some may say most important – risk management tool to avoid the pitfalls of acting for D-grade clients. Before taking on any new matter, practitioners should ask themselves the important question: should I act for this client, at this time, in this matter?

When considering the answer, consider whether the client has any of the D-grade characteristics listed. If you do decide to act for such clients, you need careful strategies to manage them.

Next month’s column will have further strategies for avoiding or managing the D-grade client.