Why Is It Legal for a Larger Company to Drag Out Legal Proceedings?

Legal fights between companies, particularly when a larger corporation is involved, often result in an extended legal battle. This post delves into the reasons why companies can legally prolong these proceedings and the potential strategies they use to gain an upper hand in court.

Understanding the Legal Framework

When a larger company engages in protracted litigation, it is often within the bounds of the Rules of Civil Procedure (RCP). However, several factors allow them to manipulate these rules to their advantage:

Following Rules of Civil Procedure

Companies are required to adhere to the RCP, which includes local rules set by the presiding judge. These rules ensure that the legal process proceeds smoothly and fairly. Despite this, corporations can still use them to their benefit. By following the rules to the letter, they avoid the appearance of frivolous or abusive behavior.

Managing Discovery and Motions

Discovery is a critical phase in any lawsuit, where each side digs for evidence. Frivolous motions for continuance and intentional delays can be strategically employed. While these practices are not entirely illegal, they can be weaponized by larger corporations to gain a tactical edge.

Levelling the Playing Field

Proponents argue that adherence to these rules ensures a level playing field. Critics, however, contend that the corporate landscape is far from level, as the rich and large corporations can afford to engage in prolonged litigation with ease.

The Financial Power of Larger Corporations

Larger companies have the resources and time to engage in adversarial legal practices that smaller entities cannot match. This financial advantage translates to several strategic benefits:

Wearing Down Opponents

Extended legal battles can exhaust opponents financially and emotionally. This wear and tear can lead to settlements that might be unfavorable, especially for smaller companies.

Settlement Strategies

Deliberately prolonging a case can also be a settlement strategy. By making the legal process so arduous, companies can influence plaintiffs to seek more favorable terms before the case is decided.

Real-World Examples and Lessons

The following case study provides a real-world example of how a corporation might use prolonged litigation to its advantage:

Case: Defending a Nationwide Home Builder

In one instance, a nationwide homebuilder faced a lawsuit regarding cracked foundations. Initially, they thought settling would be the most cost-effective solution. However, the lawyer handling the case insisted on conducting discovery and hiring experts, which was not in the builder's interest.

The homebuilder ultimately agreed to settle prematurely, but this decision proved costly. Not only did they have to pay additional costs for discovery, but they also faced astronomical defense costs. This forced the company into bankruptcy, turning all their lawsuits worthless.

This case study underscores the risks associated with prematurely settling and highlights the strategic advantages larger companies can gain through prolonged litigation.

Conclusion

Larger companies often use legal processes to their advantage, dragging out lawsuits to wear down their opponents. While this practice is often within the bounds of the law, it does highlight the inherent inequalities in the judicial system. Preventing such tactics requires a reevaluation of current rules and potential caps or budgets to ensure fair and balanced outcomes.

Disclaimer

While this content is provided as a general response, it does not constitute specific legal advice. Legal strategies and their effectiveness can vary based on individual circumstances. Always consult with a legal professional for tailored advice.