To Sue or Not to Sue: When is a Lawsuit Necessary?

To Sue or Not to Sue: When is a Lawsuit Necessary?

Has a business, individual, or organization caused you monetary damages and not accepting responsibility? When these parties won’t work with you and won’t pay up, a lawsuit may be necessary to hold them responsible.

 

What is a lawsuit?

When one party files a complaint or takes a civil action against another to recover property, money, or damages of any sort, it’s called a lawsuit. Each “party” is generally an individual, business, organization, or a government agency. 

The litigants could be seeking monetary damages, injunctive relief, or declaratory judgments against those being sued. There can also be scenarios where there are multiple plaintiffs, defendants and even third-party plaintiffs and defendants, and it must be decided if both are liable and what percentage each defendant is liable for. 

Lawsuits exist to create a way for the parties to settle disputes on an infinitely wide array of issues and disagreements. Often, lawsuits are started with the sole intent of the parties settling. More than 90% of cases are resolved through settlement or mediation.

 

Cause of action

Every lawsuit includes a set of facts to justify the right to sue to obtain damages. This is called the “cause of action,” and it sets the foundation for which a lawsuit is built.

In court, this cause of action is laid out in a document called a “complaint,” which the plaintiff will file. Here, the facts of the case are laid out and the legal theory on why it should result in damages paid to the plaintiff is built.

If the court finds that “cause of action” is insufficient, they can dismiss the case through motions practice.

 

When should you consider a lawsuit?

Broadly speaking, consider a lawsuit when you feel like you have been wronged at the hands of another party. 

Some causes of actions that may be a good time to consider a lawsuit include…

  • Enforcing a contract: If you have a signed contract with another party and they are failing to comply with what you’ve agreed to, it’s your right to have the contract fulfilled. A lawsuit is a way to apply pressure and get them to comply. 
  • Protect your property: Property, both physical and intellectual, needs to be protected. If you feel someone is infringing on your property rights, suing may be the only means possible to protect what is yours. 
  • Recover damages: If you or your business is harmed financially or physically by another party’s negligence, filing a lawsuit may be the only way possible to make yourself whole. 
  • Replace fiduciaries: In the business and organizational world, company management has a fiduciary duty to act in the best interest of shareholders. This also applies to investment advisors or attorneys you feel were negligent in their handling of your finances or case. 
  • Dissolving a company or partnership: If your business involves a partnership or joint venture with another party, dissolving this partnership if both parties are not on the same page may be necessary. 

 

Should you file a lawsuit?

When it comes to lawsuits in the business world (or whenever), there is never one right answer. Lawsuits are complex and many considerations go into whether you’ll actually “win” a lawsuit, including the:

  • Jurisdiction the lawsuit is filed in
  • Quality of the other parties representation
  • Judge presiding over the case
  • Damages you are seeking
  • Strength of your case
  • Clarity of the law your case is built on

The short answer is that every case is different. Knowing whether a lawsuit is a good idea for your specific case requires a deep look at the circumstances and an analysis of outcomes.

 

What to consider before proceeding with a lawsuit

  • Do you have a rock solid case? This is the first thing you have to think about. Your cause of action must be solid if you’re going to move forward with a lawsuit. And this goes far beyond the amount of damage you incurred. Just because a party indirectly caused you to lose money does not mean they owe you damages if you’re using a shaky legal theory in your cause of action. 
  • Do you have a good lawyer? When filing a lawsuit and taking another party to court, you absolutely need to have good representation with deep knowledge in the jurisdiction you’re filing your lawsuit in. The success of your case is grounded in your case’s legal framework, and without experience and intelligence on your side, you may be left in the dust. 
  • Have you made an effort to settle? The best way to “win” a lawsuit is to come up with a compromise out of court. There is no reason to not explore amicable solutions that avoid the headaches and risks of a trial. Since you won’t have to pay as many legal fees, you can likely get away with accepting less than what you’re suing and come out about even.
  • Is it worth the time? Trials can take a long time and come out to cost a lot. If you’re suing, make sure the time, stress, and money it’s going to take you to come to the result you want is worth it for you. If not, it may be better to cut your losses and focus your efforts elsewhere. 
  • Will you actually be able to collect anything of value? If you’re suing a party that isn’t paying because they’re bankrupt or in a weak financial position, you may not be able to recoup the financial judgement even if you win your case. If they declare bankruptcy, you can kiss what you “won” goodbye.
  • Could you just settle in small claims court? If the damages you are seeking are under $5k, you can bring the case to small claims court to more easily seek the damages you deserve. 

While you can often win a larger amount by pursuing a lawsuit, they are risky endeavors that could lead to a bigger headache than they’re worth. You could win your case and be awarded full damages— but you could also lose the case and be left with a pile of legal bills.

Settling can be a much better option. While a lawsuit should never be taken off the table if the other party is being unreasonable, a settlement compromise with the help of an experienced attorney can be a positive for both parties to avoid the headache a lawsuit would bring. 

 

Talk to the attorneys at JJH Law before filing a lawsuit 

A good business attorney will help you file a lawsuit that will actually achieve results. The lawyers at JJH Law will help you… 

  • Develop a sound cause of action that shows the court the legal framework for which you’re owed damages 
  • Help you find the best way to serve your lawsuit 
  • Negotiate with the defendant to try to help you achieve your monetary goals without going to court
  • Fearlessly go to court if the defendant is not reasonable

Contact us today to learn how we can help get your business what is rightfully yours. 

Joseph Haddad
jjhlawpdx@gmail.com

Joseph is a business lawyer and founder of JJH Law. He focuses on complex civil litigation with an emphasis on employment-related matters on behalf of employers and employees. He's also an avid card player, and in 2006 was ranked #118 in the world by CardPlayer Magazine.

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