Cost of administration and/or litigation

Jamie

I am looking for figures on the average (or ballpartk)cost to defend a case whereby an employer doesn't comply with regulations or processes (ie., FMLA, ADA, COBRA, and FLSA case).

What is the cost to administer such programs? I am having trouble finding research.

As a consultant, I want to express to client employers how important an HR service is, and how we can keep them out of trouble. I need to quantify this HR service and be prepared to site cases when possible.

Gillian

I don't think that you will find any research which means that you may have to do your own. The cost of losing a case is more that just the settlement or the judgement. It is the legal expenses, probably for both sides in a loss, plus all the time that people have to spend providing information so that the attorneys can prepare the case, going to depositions etc. What is the cost of these individuals not doing their job because they are spending a lot of time on the case. If I were doing this, I would contact a few HR friends and get an estimate of the amount of time all the people at their company spent on the case, multiply that by their salary, then add all the other stuff. You may have to work around the fact that some settlements and judgements are confidential. Given all the time that individuals have to spend working on the case, a win or a settlement is still very costly. This sounds like I spend a lot of time in litigation. As an HR person, I don't, but I have a lot of expert witness experience.

Gillian

I don't think that you will find any research, which means that you may have to do your own. The cost of litigation is much more than the cost of the settlement or the judgement. In addition, there are the legal expenses (attorneys, court costs, expert witnesses, etc) and in a loss, the losing side sometimes has to pay the legal expenses of both sides. Then there is the cost of the time that is spent by company employees gathering data, being interviewed by the attorneys, going to depositions etc. This time also means that the employees are not doing their job, sometimes for hours on end, and what is the cost of that? If I were doing this, I would contact a few HR friends and make some estimates based on their experiences. You may have to work around the settlement or judgement amounts because they are sometimes have privacy provisions so they aren't public knowledge. This sounds like a spend a lot of time in litigation. As an HR person I have very little pertaining to the organizations I have worked for but I do quite a bit of expert witness work.

Theresa Gegen TX

There should be lots of cases available on the costs of litigation. These cases will be one's where the plaintiff won the case and was awarded attorney's fees by the court.

So you will be able to see what it costs one side (and you can bet that the other side -- the company is paying as much or more for their legal expenses).

Another means of determining the costs of litigation is to find out what the prevailing hourly rate for attorneys is in your area. This shouldn't be too hard to find. It will be pretty high, I'm sure. Then you could just ask an attorney to outline an estimate of hours for a standard case (of couse, each case is dependant on its facts, but any attorney with lots of experience is used to doing budgets for client on these types of cases.

Note: it is not unusual to find that the cost to litigate a case (attorney's fees) is much greater than the settlement the plaintiff could ever get.

Good Luck!!

Gillian

Add to that the productivity loss caused by the loss of employees from doing there job full time, then one might have an idea of the true cost.