To Sue or Not to Sue: Determining when bringing suit is worth the time and expense - and when is it an expensive exercise in futility - Part 1
As most people are aware, litigating can be an expensive, time consuming, and unpleasant experience. I find that an important part of competently counseling clients or prospective involves helping them determine whether bringing suit is a good economic decision. I find that achieving a successful result for my clients involves taking the time to make a sober assessment of his or her claims, and dispelling myths about litigation which may distort the client’s decision making process in determining whether to proceed with a law suit. It is best for the lawyer and the client to discuss these aspects of the client’s claims before the decision to go forward with litigation is made.
Attorney’s Fees
Very often, clients will come to a lawyer soon after a dispute – looking to bring suit in order to win “justice” for a perceived wrong done to them. Just as often, these clients come to believe that the “justice system” is a misnomer because they are surprised to learn that winning “justice” can mean paying more in costs and fees than a judgment is worth. Many critics of the American Court system fault the “American Rule” for this belief that justice is often denied due to the costs and expense of pursuing a legitimate claim against a defense that appears to be less than meritorious. The “American Rule” employed in most American Courts holds that for most claims each party will bear the expense of Court costs and their respective attorney’s fees. This is contrasted with the “English Rule,” employed in the Courts of the United Kingdom and most Commonwealth countries, which provides that the loser in a case that proceeds through trial bears the expense of all costs and the winning party’s attorney’s fees in addition to its own.
Other than the customary contingent fee arrangements in personal injury and worker’s compensation claims, or specific fee shifting statutes, most claims will require that each party bear its own attorney’s fees and costs. The attorney’s fees and costs that will accrue during litigation are the major out of pocket expenses which must be weighed against the potential dollar value of any judgment, the likelihood of success at trial, and what I call the “collectability” of that judgment.
Potential Dollar Value of the Judgment
The next important factor to be weighed in determining whether to proceed with a lawsuit is the potential Dollar value of the judgment sought. I list this factor second because the comparison of attorney’s fees and costs against the maximum potential value of a judgment – a “homerun” – will often bring matters into perspective for the client considering pursuing litigation. Contrary to what many people may believe, damages in most kinds of cases are limited to an amount necessary to compensate the aggrieved party for his or her losses - and for only those losses that are reasonably foreseeable. Generally, Courts will not award a judgment for damages that are causally remote and merely consequential to the defendant’s conduct if the class of damages was not reasonably foreseeable by both parties. Punitive damages – damages imposed by the Court to punish and deter particularly malicious conduct – are only available under certain specific circumstances, and even more rarely awarded by Courts and Juries. A realistic assessment of the damages suffered by the client for which he or she may receive compensation is indispensable in making the decision to pursue a claim in litigation.
