“Even with High Chances of Success, Lawsuits Are Avoided If Costs Are Too High”

‘The London Disputes Report’ by UK Legal Media

It has been observed that British companies and law firms are increasingly approaching commercial litigation and arbitration from the perspective of business decision-making. There is a growing trend for companies to evaluate not only the likelihood of winning a case but also litigation costs, case duration, and the potential impact on business when deciding whether to proceed with a legal matter.

The London-based legal media outlet ‘The Lawyer’ and asset management firm Burford Capital released ‘The London Disputes Report: How UK GCs and Law Firms are Approaching Commercial Litigation and Arbitration in 2026’ on July 7 (local time). The report is based on a survey of 100 individuals, including law firm attorneys and in-house legal counsels, as well as in-depth interviews with 20 participants.

It has been observed that British companies and law firms are increasingly approaching commercial litigation and arbitration from the perspective of business decision-making. The Legal Times.

According to the report, the most significant factor influencing the decision to file a lawsuit was cost. Among respondents, 57% cited litigation cost as the most influential aspect in deciding whether to proceed with a dispute. Other important factors included the counterparty’s financial standing (32%), the nature and complexity of the dispute (31%), reputational risk (28%), and the business and financial impact (27%).

In addition, 67% of respondents said that “even cases with a strong chance of success are often not pursued due to cost or risk.” The report analyzed that cost and risk effectively act as a ‘filter’ for litigation, causing many cases to be screened out before any legal judgment is made.

The duration of a legal matter was also identified as a significant variable. A total of 64% of respondents considered the length of a case to be either ‘very important’ or ‘extremely important’ when deciding whether to litigate. One telecom company lawyer who responded to the survey noted, “If a dispute can practically bring business activities to a halt because it is intertwined with key negotiations, then it’s impossible to drag it out for three or four years. Considering the impact on business, we must look for quicker solutions.”

Settlements, too, were found to be driven more by economic considerations than legal ones. Some 59% of respondents said “most disputes are settled for reasons unrelated to legal issues.” Key factors in settlement decisions included rising legal costs (48%), the time required to resolve the matter (41%), and reputational risk (39%). Furthermore, 60% of respondents said “management fatigue often leads to settlement.”

Many respondents also reported experience in settling for lower amounts than initially expected due to budget constraints or risk aversion. Specifically, 22% said this happened ‘often’ and 46% ‘occasionally,’ meaning a total of 68% had settled for less than anticipated for reasons of cost or risk.

Domestic Companies Also Prioritize Cost and Speed

A similar pattern was identified in ‘The 2026 Korea Law Firm Consumer Report’ published by The Legal News in May. The criteria companies use to select law firms have become more diversified than in the past. While ‘competence and expertise’ remains a key metric, growing emphasis is placed on cost efficiency, communication, and proven work execution experience.

Analysts explained that companies’ increased focus on cost during the law firm selection process is the result of both enhanced internal legal capabilities and evolving legal service markets. As mid-sized and specialized boutique firms have become able to handle work previously reserved for only the largest law firms, companies have begun comparing expertise alongside costs.

In-house counsel also listed prompt case handling and clear communication as key evaluation factors. Notable opinions included, “The professional capabilities of law firms are converging. The ability to accurately identify customer needs and ensure promptness will become crucial criteria for assessment,” and, “Even if a law firm delivers a positive result, if it charges excessive fees once, it is unavoidable that the company will avoid assigning work to them again.”

There were also comments that “the core value expected of law firm engagement is to reduce dispute costs and achieve favorable outcomes or settlements through professional guidance,” and, “Practical solutions based on an understanding of the client’s business and industry, prompt response, and clear communication are the essential elements that determine client satisfaction.”

Hanju Cho, The Legal News Reporter

※This article is based on content supplied by Law Times.

This content was produced with the assistance of AI translation services.