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1. Before You Sue
People involved in disputes often rush to judgment and decide to sue. Here are some things to think about before deciding to start a lawsuit to settle your dispute.
Do you have a good case?
This may seem obvious, but you need to have a cause of action for your claim. You have to understand what all of the elements of your claim are. For example, for a claim of "breach of contract," you need to establish the following elements: (1) a contract; (2) performance due under the contract; (3) breach of the contract; and (4) damages. An attorney can help you determine if a cause of action is present based on your facts.
Have you demanded payment in connection with your dispute?
This step also seems obvious, but is often overlooked by plaintiffs in their rush to the courthouse. If they know they owe and are able to pay, most businesses will pay rather than be dragged into court-just ask them.
Have you tried to settle the dispute by compromise?
Take a realistic look at the other party's point of view. Perhaps he or she has a valid defense or claim against you. Maybe some of the goods you delivered were defective. Adjust your claim accordingly. Also, you may want to think about reducing the amount you are asking for. From a purely practical point of view, you may receive more that way than you would suing because you will have to pay attorneys' fees and other costs in connection with the lawsuit.
Will you be able to collect the judgment if you win?
Take a hard look at the financial condition of the party you are going to sue. You want to be reasonably certain that you will be able to collect a judgment before you spend a lot of money on a lawsuit!
Do you have the money to pay a lawyer to handle the lawsuit?
Lawsuits are expensive, and recovering your attorneys' fees is, most often, not an option. Ask your lawyer for an estimate of legal fees, and then determine how far you are willing to take your case based on the wanted outcome. It is often much cheaper to settle.
Do you have the time and resources to devote to a lawsuit?
Lawsuits take a lot of time and energy, and can be emotionally draining. Remember that you and your employees will have less time and energy to devote to your business for the duration of the lawsuit.
Are you within the applicable statute of limitation?
Check with your lawyer to make sure that any time periods have not run.
Where will you be able to sue?
If you are suing someone from a different state, a court in your state may not have personal jurisdiction over the defendant. In that case, you might have to sue the defendant in his or her location, which will probably be more expensive and inconvenient for you.
Is your claim small enough to bring in small claims or?
If so, you will usually be able to represent yourself, if you wish, However, you may wish to pay an attorney to coach or advise you how to prepare your case.
2. Things you Might be Thinking: Being Involved in a Lawsuit
This is a waste of time.
It may well seem like a waste of time, but you have to take ANY lawsuit seriously. Even if you are being sued for something that you are completely innocent of, you have to address all the issues raised in the lawsuit as if they were real claims.
I don't have an attorney.
Most people don't. If you get involved in a lawsuit, shop around for an attorney you feel comfortable with. You and your attorney are going to spend a lot of time together during the course of the lawsuit, and you need to find someone you can work with. Make sure that you have a written retainer agreement with your attorney, detailing what you will be charged and for what, and what your attorney will do for you.
I'll get in trouble if [fill in blank] comes out.
That might be true, but it is also probably true that if you are involved in a lawsuit, it WILL come out. Be honest and forthcoming with your attorney. Even if it is embarrassing, even if it makes you look like an idiot or a crook, it is better if your attorney knows. Give your attorney everything in your relevant files, again even if it is embarrassing or incriminating. If you have the document, the odds are that someone else does too.
I can't afford this.
No one can really afford the expenses of a full-blown lawsuit, however, the ultimate damages may far outweigh the cost of a successful legal defense. You should look at all legal actions as a balancing act between the expenses of going forward and the costs to you if you don't. This calculus also comes into play when deciding at what point you might wish to settle and on what terms.
Why are we fighting about something so silly?
You should realize that most lawsuits settle, and that the court system is designed to put pressure on you to settle the lawsuit. You continually need to reassess whether the lawsuit makes economic sense. If you are spending a large portion of the amount at issue in the lawsuit on legal fees, the lawsuit is not a good business move.
My attorney doesn't understand I don't have time for this.
Yes, he or she does. Adequate preparation for a lawsuit, though, takes time. Make yourself available to your attorney for discussions regarding the case, including working on discovery and preparation for depositions and trial. It is not a waste of your time if it helps you to win the lawsuit.
Court is scary, and too formal.
Yes, it is. That means you should follow your attorney's advice about courtroom decorum and behavior, and don't be afraid to ask him or her if something is appropriate. It's one of the things that you are paying your lawyer for.
This is insulting.
No it isn't. Don't take this lawsuit personally. If you are being sued, it is probably for economic reasons, not because you are a bad person. If you are forced to sue someone, it is probably for economic reasons or because communications have broken down.
Well, at least my opponent will have to pay my fees.
Probably not. Even if there is a statute saying you can be awarded fees, judges are very reluctant to award them unless the positions your opponent takes are frivolous. Never make the decision to bring a lawsuit based on the possibility that you might be awarded your attorney's fees. Even then, it may not happen. Don't pursue a lawsuit for revenge, either. Lawsuits are expensive, which means that revenge is expensive.
I could never pay this judgment.
True, but irrelevant. Don't be intimidated by the amount that your opponent is requesting as damages. Often, this figure is dictated by a civil procedure rule or statute, and bears no relation to the opponent's actual damages. Also, remember that no one asks for the reasonable damages that they feel they are owed; in a lawsuit, they are asking for their best-case scenario. By the same token, don't become tied to the amount you have asked for in damages. It's your best-case scenario, too, and the odds are, if you go to trial or settle the lawsuit, you will receive less than you have asked for.
Will this ever end?
Yes, but not soon. Don't forget that lawsuits can take a lot of time. In some large cities, it can take five years for a civil suit to go to trial. Even in low-population areas, it is typical for a civil suit to take a year from start to finish.
3. Preserve the Evidence
If you have been injured in an accident of any kind, make sure you protect yourself by preserving the evidence of the accident. The following guidelines can be applied to almost any situation.
If you've been in automobile accident, take pictures of your car as soon as possible, before it is repaired, and if you're able, take pictures of the other car also. Take as many photos as possible from various angles so that you can recreate the damage on film to anyone from any angle, including the undercarriage of your car. Photographs will illustrate the nature and severity of the injury, as well as preserve the state and condition of the location where you were injured.
Take photographs of the area where the accident happened. Try to capture the area as it looked at the time of the incident, especially debris and/or markings or damage to the roadway.
Preserving these conditions can be even more import when you are a pedestrian or a bicyclist. In this case, photographs provide you with the advantage of being able to point and direct, with specificity, where you came from, where you were going, and what you did at the time of the accident.
One of the most critical things you can do to protect yourself is to obtain the written description of an eyewitness's perception of the accident, while the facts and images are still crystal clear and fresh.
Ask the witness draw a diagram of the location, giving details where possible. A detailed diagram or map can become a great advantage to you in the event that the witness forgets many of the details at a later time. This can be used to refresh the memory of a witness after the passage of time, if it becomes necessary.
It seems obvious, but make sure you record the witness' name, address and telephone number. It's also a good idea to get an alternate contact, such as a spouse, parent, or other relative.
If you have been involved in automobile accident, take your damaged vehicle to a repair facility as soon as possible. Visit at least two repair yards and obtain written and dated estimates. This, coupled with the photographs of your vehicle, will provide you with the advantage of knowing that you have done what you can do to support your allegation of injury.
Be absolutely certain that you have written down the name, address, and telephone number of the drivers of all vehicles involved in your automobile, pedestrian, or motorcycle accident. Don't forget to copy the license plate information, and registration information of the other vehicle/s, along with the license information of the offending driver.
Store the clothing and shoes you were wearing at the time of the accident in a place where they will not be destroyed or altered.
If possible, get a sample of the object that caused the slip and fall and store it where you stored the clothing and shoes. Try and obtain a sample of the object, if possible, that caused you to slip and fall and store it in a safe place. Should it be stored in the freezer? Yes, if it is an item that will perish.
Keep a paper trail by documenting all verbal communication related to the case, particularly when dealing with insurance companies. The best way to do that is with a dated letter that confirms what was discussed during the communication.
4. Settling the Case
Talk to your lawyer about his or her assessment of the case. Consider the following points:
Amount he or she thinks the case is worth in a range of dollar amounts
Verdicts and settlements in similar cases
Chances of winning at trial
Civil trials are open to the public; unfavorable publicity
Amount of personal information that could be revealed at trial
Possible disclosure of business information or trade secrets
When the case is likely to be called for trial
Practical difficulties in trying the case
Weaknesses in your evidence
Weaknesses in your opponent's evidence
The amount of the defendant's insurance coverage
The defendant's own monetary resources
The defendant's lawyer's negotiation tactics (your lawyer may have negotiated with the lawyer before, or has talked to other lawyers to get an idea of what to expect)
The extent to which your opponent is likely to play hardball
If you are the plaintiff, ask how much of the settlement proceeds will be applied to your lawyer's fee and your expenses.
If you are the plaintiff, ask how the settlement payments will affect your federal and state income taxes.
Talk about what you're willing to concede in order to get the case settled.
Discuss the minimum amount you will accept, or the maximum you will pay
Consider the possibility of a partial settlement, that is, settling the easy issues first while you continue to negotiate the knotty issues.
If you are the plaintiff, consider accepting a remedy other than money.
5. Collecting Judgments
Even when you "win" in court, the opposing party may not just pay you the amount of the judgment. You may have to take additional steps (and incur additional expenses) to collect the judgment.
Individuals and businesses that are solvent usually pay judgments that are entered against them. They do so because they want to avoid unpleasant "collection" activities and additional expense.
If an individual or business debtor is insolvent, however, or stubbornly refuses to pay a judgment, it can be quite difficult to collect a judgment.
In most states, you can conduct post-judgment discovery (depositions, interrogatories, requests for production of documents, etc.) to uncover a debtor's sources of income and assets.
If the person you hold a judgment against is an individual, you can garnish his or her wages to collect your judgment. Many states limit the amount you can garnish from a debtor's wages to 25 percent of the debtor's paycheck.
You can also garnish the bank account of an individual or business debtor.
If you hold a judgment against a company, you may be able to get the sheriff to seize the money in the company's cash register. Businesses may also have machinery, equipment, or other assets that you may be able to seize.
The time period for collecting judgments in many states is ten years. You can usually renew the judgment for another ten years. So even if the person that you have a judgment against does not have any income or assets today, he or she may have income or assets in the future.
If the person that you have a judgment against files a Chapter 7 bankruptcy, your ability to collect your judgment is cut-off just like everyone else. However, you may receive priority over lesser creditors in a bankruptcy action depending on the types of the other debts in existence at the time of the bankruptcy.
In most states, you will need to retain an attorney to assist you with your collection efforts. You can usually hire a collection attorney on an hourly basis, or pay the attorney a percentage of the amount collected.
To collect a judgment against a debtor (or the debtor's property) located in another state, you will need to record your judgment as a foreign judgment in that state.
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