The United States is a very litigious society and employs more lawyers than any other industrialized nation. One reason why parties in the U.S. are more apt to sue may be that, unlike most countries in Europe and other countries where the loser pays the winner’s legal fees, each party pays his own expenses and is only able to collect legal fees where a law specifically authorizes it. As a result, parties will sue in the normal course or as part of a negotiation strategy, with less concern for the merits or the risk of having to cover the defendants’ expenses. But should they?
Just because you are wronged, damaged, or slighted does not mean that you have a meritorious case and should sue. A lawsuit is still very expensive, can take years to resolve, requires a great deal of time and effort, and is often unpredictable. Before filing suit, you should think hard about your motivations, research your causes of action, evaluate your evidence — it will be your burden to prove your case, contact any witnesses to see what they recall, consider whether a countersuit may be filed, and think about whether it is likely, even if you win, that you will be able to collect on a judgment.
If you or your business has entered into a contract and the other side is not performing per the agreement, you should consider the amount at issue, whether it is a written contract, if there are any ambiguities, and whether you have taken any action that the other side would seize upon to countersue. It is much more straightforward to litigate a written contract. If it is an oral agreement, it will be more difficult to prove the existence and terms of the agreement, and certain kinds of oral contracts are unenforceable.
As to the amount, it should be significant enough to warrant the costs of suit. You should expect to spend at least in the tens of thousands of dollars on legal fees, and complicated cases can cost many multiples of that, so if the amount of damages is only ten thousand dollars it may not be worth the effort. In that situation, you might take other steps to induce a settlement, such as having a lawyer send a formal demand letter, perhaps attaching a draft complaint, and hoping the other side takes the threat seriously.
If you are a homeowner and have been wronged by a contractor, you should consider whether the contractor is solvent, licensed and/or insured. If you sue an unlicensed contractor of questionable solvency, a judgment will do you no good if the contractor declares bankruptcy or disappears. If, on the other hand, the contractor has a legitimate business, owns property and has assets, you will have a much better chance of collecting at the end of the day.
In the personal injury context, lawyers typically litigate for a contingency fee. They will evaluate your case and, if they believe it has merit, will take the risk of suit by providing their services in exchange for a percentage of any winnings, rather than an hourly fee. The percentage is usually one-third. In this way, someone who has been injured and has limited resources can pursue a case without having to invest significant monies.
There are other alternatives to litigation. For instance, if two parties are at an impasse, they can agree to mediate their dispute, which is much less expensive than litigation. The parties would jointly select a mediator, who would listen to presentations by each side about the case and try to push the parties toward resolution. This is not binding, but is often effective at getting the parties to understand the strengths and weaknesses of their cases and the benefits of settlement.
Or, the parties can agree to participate in binding arbitration. In this regard, there are organizations such as the American Arbitration Association that provide retired judges or lawyers as decision makers, having expertise in an area of law as well as their own rules of procedure, and who render a decision that is binding on the parties. The procedures for arbitration are less formal and less expensive than a full-blown litigation.
So, next time you are aggrieved and ready to pull the trigger on a lawsuit, consult with a lawyer and consider all of the options. A lawsuit might be the best option, but there may be other ways to resolve the dispute. ©
[blockquote class=blue]Kenneth M. Bernstein, Esq. has a legal practice on Main Street in Irvington, specializing in intellectual property law, business law, litigation, real estate, and arts and entertainment law. He can be reached at firstname.lastname@example.org or www.kbernstein.com.[/blockquote]