Decisions made in anger are rarely the correct decision, yet we often find ourselves talking to clients who have decided to start a law suit in a fit of anger. While ultimately the law suit may have merit, we always talk the client through the potential pitfalls of litigation.
The issues every business needs to consider before litigating include:
1. What are the legal fees likely to be? Yes, when you win, the Court will award between 60 and 100% of the fees back to you, but what is that initial out of pocket expense going to be and can it be staggered over time?
2. Does the defendant have the ability to pay a judgment/your legal fees? We always search for property, credit status and other judgments before we start litigation – I tell our clients, it’s not a good outcome if our firm is the only one that makes money on a lawsuit.
3. Who will the corporate witnesses be and can you afford to have them take time from their positions to be witnesses? A lawsuit can require employees be cross examined or examined for discovery before a hearing and then of course, attend at trial. All of this can take time away from productivity at the office and it is something to consider before charging ahead.
4. Are the corporate witnesses still employed by your company? Tracking down employees who are no longer with your company costs more money and ultimately makes them less predictable in many circumstances.
5. Do you have documents to support your position? Papering transactions makes lawsuits a lot smoother as there is a written history to reflect on. While verbal contracts can also be enforced, it is more complicated and that generally means more expensive.
Generally, if there are good reasons to sue, those reasons will reveal themselves without anger fueling the process and the outcome will be a good one.
However, don’t just sue in anger and avoid lawyers who fan the flames of anger as lawyers need to be coolheaded to do their job, not just an ember in the fire.