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‘It’s the principal’

2 min read
01 June 2019

Key Takeaways

  • Pursuing litigation on the basis of principle can often be more costly than the principal
  • Litigating based on principle should be carefully weighed up by the lawyer and the client before taking the first steps
  • It is crucial to undertake a cost benefit analysis before proceeding

As lawyers, we often hear our clients tell us that they want to pursue a matter because of the principle.

Regardless of the wrong you have suffered, it is human nature to fight for the principle.

That being said, the principle should never be the sole basis to pursue litigation.

Often when principles are involved, objectivity is thrown out the window, your blinders come down and the only result that matters is having the principle rectified.

Rarely can Courts and lawyers achieve this. Litigation is expensive, uncertain and often very stressful.

As lawyers, the balancing act starts as soon as you say ‘it is the principle’ when talking about your matter.

There are two issues to consider when suing over the principle of a matter: cost and outcome.

When a matter is more about the principle than the principal, if not properly advised, clients can pour more money into achieving a result than they hope to recover (especially in claims of $20,000 or less).

Ultimately, this result is not beneficial for anyone, especially lawyers who finalise a matter with an unhappy client. More often than not we will undertake a cost benefit analysis of your matter with you in order to determine the best steps forward.

Often, the principle leads to an unpalatable outcome for clients as the cost of a result is too great, or an unsatisfactory outcome is achieved in Court. Even in most best case scenarios, principle based matters end with a nice piece of paper and a significant hole in the wallet.

Neither of these situations benefits anyone involved.

This is not to say that all matters of principle should be abandoned. A matter of principle is not in itself futile. However, electing to pursue a matter over principle must be balanced with regard to the principal, which a client also hopes to recover.

Of course the principal varies significantly for each client that comes through our front door. Whether the principal is $2,000, or $200,000, the principal and principle must always be carefully considered.

If you are too principle oriented, you may throw good money after bad by pursuing your action through litigation. Hence the much-needed balancing act.

We strategically assist clients in taking the right first step to ensure that they are best placed to recover the principal with the least cost, time and stress so you can feel that you are also achieving some personal, and principled, satisfaction.

For example if a you are owed $2,000 or more by a company and there is no genuine dispute as to the basis of the debt, then a Creditor’s Statutory Demand is often the most effective and simple manner for recovery. The added benefit is that the principle is also upheld this way.

Ultimately, every client and their principal/principle balance differs and this should be strategically considered before taking your first steps.

The information in this blog is intended only to provide a general overview and has not been prepared with a view to any particular situation or set of circumstances. It is not intended to be comprehensive nor does it constitute legal advice. While we attempt to ensure the information is current and accurate we do not guarantee its currency and accuracy. You should seek legal or other professional advice before acting or relying on any of the information in this blog as it may not be appropriate for your individual circumstances.

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