Do you want to be right, or do you want a practical outcome? If you’re facing a legal dispute and considering litigation, you’ll probably have to confront this question.

If you just want to be right, there are certainly legal pathways that can help you achieve that. Going to trial being the most alluring. And when emotions are running high, there is certainly a temptation to rush down those pathways. But there is a danger in doing so.

The litigant who is fuelled by emotion will generally want to do everything possible to prove that they’re right. Answer every allegation. Respond to every point. Bring everything to the table.

With this approach, you might find yourself wading into areas of risk and cost that were unforeseen, unexpected, and ultimately unpleasant. You might find yourself making the kinds of decisions that see you spend far more than you should have and take far longer than you should have, just to be told that you’re right. By then, of course, much of that originating emotion will have diffused, and it likely won’t feel worth it.

If it’s not just about being right, if it’s about getting the most practical outcome, then you need a different mindset.

The investment mindset

In our experience, the most effective way to approach a legal dispute and the way in which to achieve the most effective and practical outcome, is to adopt an investment mindset.

Now, this is not to say that we can ignore the emotion. The emotion, of course, is there. It is what motivates our behaviour and desire to pursue legal action: to right some kind of wrong. But it’s crucial to be able to separate that emotion from the approach to attaining an outcome, treating litigation as if it were an investment or a balance sheet item. Because, ultimately, it is.

If you were to say, ‘I want this is a matter of principle’, you probably don’t mean, ‘I’ll spend $20 million to achieve $5 million.’ Some people do, but usually, somewhere beneath that kind of language is a series of other rational considerations that are going to play into the kind of outcome that will be satisfying in the end. Considerations that would apply to most other investment decisions.

Applying the investment mindset

So, what does having an investment mindset in litigation look like?

Rather than initiating legal proceedings quickly, it involves analysing the range of factors that will affect your expected return of pursuing legal action, all before making the investment decision.

These considerations include:

All of this leads to a mindset that is focused on how to achieve the most effective, practical outcome in the shortest possible time, at the least possible cost, to achieve the biggest possible return.