Conflict is sadly a part of most relationships, be it business or otherwise, but in the context of former, litigation for many is often their preferred choice to resolve issues. In this podcast, Heath Berghofer of OMB Solicitors provides useful information on the processes available to you in resolving disputes.
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Dan: Heath, why do people choose to litigate?
Heath: People choose to litigate most normally to recover a debt or potentially to resolve some form of dispute. Normally it’s around a commercial law issue, but sometimes it can also be to right what they call a wrong that’s been made against them.
Dan: Do people choose other alternatives like mediation, or the other options available to them?
Heath: Yes, they do. One of the things we like to discuss with people when they first come in or they want to sue someone else to recover money or potentially some sort of family law matter to resolve a dispute between their former partner, the question is always, what are we trying to achieve here? How much it’s going to cost? It’s an important thing to keep in mind from the outset because obviously litigating can be a very expensive exercise and there can be, in some cases, no winners at the end.
Dan: There’s often a winner and a loser, isn’t there? Worst still, you’re giving that discretion to somebody else to make the decision for you, potentially?
Heath: That’s right. That’s very important. So particularly at the outset of any sort of dispute, for example a monetary dispute, someone’s done work for another person and that person has decided for one reason or another not to pay, the question needs to be asked at the outset, ” yes, you may have been wronged, and yes you may have an action, but how much is it going to cost you to recover this debt?”
The first question is, how much is the money that’s owed? What are my options for recovery? So that leads to two potential avenues. The individual could go through our Queensland Civil and Administrative Tribunal, which is a very fast and effective dispute resolution process, which involves things like mediation and gives those options for people to potentially resolve their own dispute, and if they can’t resolve it, go before a judicial member to have their dispute resolved.
Alternatively, they can pursue their debt recovery matter through the state courts, depending on what monetary amount they’re seeking to recover. But if that amount, for instance, is $5,000.00 or $10,000.00, it would be very difficult in certain circumstances to engage a solicitor to effectively recover that debt. So then it becomes a question of the individual; do I want to pursue this myself through our tribunals? Because it’s not only a monetary decision they need to make, but also a time commitment as well. There’s an emotional component that touches every piece of litigation. Litigation can go for a number of years, and it can be quite a tax on an individual emotionally to go through the process.
Dan: Heath, how do people actually prepare themselves for litigation?
Heath: That’s a good question. It’s very difficult for people to properly prepare for litigation, because you really don’t know what the outcome is going to be. But I think a clear mindset of what a person wants to achieve at the start is the most important point. A good question to ask is, what’s this going to cost me? What am I going to achieve here? Because ultimately, if you walk into any sort of debt dispute matter or litigation with the objective of punishing the other person, well more often than not you can end up effectively just punishing yourself through your own actions. That’s not what you want to achieve. You want to be able to achieve a result here that’s beneficial to you, not the opposite.
Dan: So if a person wishes to litigate, what are the steps? I’m assuming that they need to go and seek some legal advice before contemplating this?
Heath: The person firstly should get some legal advice. They should go to a solicitor. If they can’t afford a solicitor, then they should go to one of our free local community centres in the Gold Coast region. After receipt of that advice, they’ll need to make a decision about what they want to do with the dispute. That may be at the first instance to contact the other side to see if they can resolve between themselves, which is always a very good option.
If the other side doesn’t want to discuss the matter or resolve the matter, then they need to make a decision as to whether they want to institute any sort of formal proceedings, either in QCAT or our state courts, or walk away from the dispute from a commercial basis, conceding that it’s going to cost a lot of time, money, and effort to do this. Maybe it’s better for me to spend my time with my family and with my job, because that’s going to be more beneficial.
If they do take the course of instituting the proceedings, then they can go in a number of directions. QCAT, for instance, it means preparing the required documentation, filing the first step for a mediation between the parties, which can be very effective in most circumstances. It can get the parties meeting each other to discuss the issues and potentially resolve it. If that doesn’t resolve the dispute, then they’ll be before a tribunal member who will resolve it for them. I think the key there, and the key with all of this is if you get before that tribunal member, that may be a decision that both parties ultimately are not happy with. So it’s something to consider at the very outset that, again I refer to what I said before, there may be no winners because ultimately the decision may be in no one’s favour, and everyone will come out unhappy.
Dan: I was just going to say Heath, the irony or the paradox of all this is that for those people that perhaps are wanting to punish the other side, the path to resolution does always involve mediation, so they’re going to have face off with this person at some point during the journey, aren’t they?
Heath: That’s right. It’s a really important step, particularly face-to-face mediation, getting the person in the room opposite you is normally the best way to resolve a dispute with someone facing you. You have to speak your complaints or the issues that you have and what you’re trying to resolve here, rather than doing it through paper or over the telephone. It seems to produce a better result for whatever reason.
Dan: So, okay. It’s gone to litigation, or has gone to court. Now what are the outcomes of litigating? What can be the orders given by the judge or the tribunal or whoever it might be?
Heath: So in a typical debt recovery dispute, it may be in the tribunal, for instance, that amount of money is awarded to one party or another, or no money is awarded either way and the action is simply dismissed. In a state court, again similar circumstance. But if the party’s actually represented, then they may get a cost order as well on top of that. Which can recover, in part, some of the legal costs incurred. But it will not be all the costs incurred under the proceedings.
Dan: So I suppose the take home message for people that are perhaps wanting to seek some sort of recourse, be it through mediation or litigation, is to get some advice at the outset?
Heath: It’s very important to get advice, that’s right. Very important to get advice, and particularly get an understanding of what this process will involve so you can make a really good informed decision before they start taking steps, rather than blindly running through thinking everything will be fine at the end of it, because it may not be. Because particularly from a solicitor’s perspective, we want to achieve the best result we can for our clients on a commercial basis. There are some instances where that may be a very difficult thing to do, and it may be that they have to do it themselves. But it’s better to, from the client’s perspective, to have that understanding from the start than to find that out halfway through the proceedings. So it’s quite important for people to understand that before they start.