The cost of business has risen over the past 5 years. Many factors, including a global pandemic and various conflicts, have driven up the cost of living for many consumers.
When you’re a business owner trying to balance the need to make a living against attracting a customer base, it’s very difficult to come out the other side with the books firmly in the green.
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Costs such as commercial real estate, energy and utilities, production, staff salaries, and marketing all add up to tens of thousands per year.
If you throw legal trouble into the mix, the cost of litigation could outright close down your business and make it impossible to keep on trading.
The Cost of Avoiding Litigation
Most companies do their best to avoid litigation in the first place, either by having a lawyer look over their terms and conditions and terms of use policies, or simply getting the lawyer to draft those up in the first place.
In terms of data protection laws active in both the UK and the EU, once again, many companies will work closely with a relevant advisor to outline a suitable cookie and/or privacy policy.
When these documents are in place, and with the right legal protections underlined throughout, a hard cap can be put on any litigation that might be brought your way.
But what does it cost to avoid being sued?
Obtaining legal advice: hourly rates
Most law firms will charge by the hour.
In 2026, the average hourly rate for simple legal advice is around £375 for local offices, with bigger, more reputable law firms charging upwards of £500 for their services.
It’s possible to pay a retainer up front, to ensure you have legal advice available whenever it’s needed, but most small business budgets don’t stretch this far.
Investigation lengths
Another factor that increases this hourly cost is requiring law services for longer than a day at a time.
If you’re in the midst of a dispute, for example, and require a full length investigation to be carried out, you’ll see these costs grow exponentially. Indeed, the firm itself may even charge by the day, rather than the hour, in the most extreme cases.
Of course, the use of legal software like eDiscovery Tools, and understanding your own position within the dispute can simplify evidence gathering and legal defense prep.
What Legal Issues Do Small Businesses Encounter?
For small businesses, some legal issues are more common than others.
These include:
- Employment disputes, such as lack of contract or unfair termination
- Customer disputes that involve your company being taken to a small claims court
- Trading issues, including accusations of false advertising
The potential of commercial litigation keeps many business owners up at night.
It’s a cost many would not be able to front, and even if they won, they’re unlikely to see their court costs paid in full.
Be aware of your chances for litigation at all times, and plan ahead to avoid it.
