Client-Oriented and Results-Driven Business Solutions

Sit, Settle or Sue

by | Sep 19, 2019 | Firm News

Let’s face the truth that is litigation is expensive. So is settling a case just because of a lawsuit or claim. The long term costs of not pursuing action or settling a case that has no merit is difficult to quantify, but the intangible cost can be huge. Settling meritless claims puts a target on your back resulting in an easy mark for others to follow. Not taking action when there is a right can result in becoming an easy mark for others to take advantage. There are five things you should consider in deciding if a lawsuit should be filed, be resolved or should involve no action at all.

Who is wrong-is there blame?

If it sounds wrong to a reasonable person, it probably is and may be the subject of a civil action. I could provide a history lesson on the development of law and various causes of actions that have developed for hundreds of years. Suffice to say if someone behaves in an unreasonable manner or does not honor a contract (written or verbal) that results in damage, there is likely a civil remedy. In deciding to pursue legal action, the first issue is who is actually wrong. This is not always clear and takes guidance from experience and legal knowledge. The sooner you consult on such an issue, the quicker a resolution or decision can be made and what action, if any, should be taken or what defense exists.

Reputation-protect it or be target.

This is the intangible question that really needs to be considered. What is the long term consequence of not taking action or quickly settling? Does it make you an easy target for other lawsuits or for others to take advantage? I have been involved in many situations where the cost of settling may have been less than the cost of proceeding. Businesses that do not take action where there are serious damages from another’s action frequently develop a reputation that they will not force others to comply with their contracts. Our firm will not send threatening letters or claims without assurance that the client will follow through. This is important, because opposing counsel knows we will simply not go away. We protect our reputation as well as our client’s because our client’s need assurance that if we take a case we will proceed legal action until the end.

Probability of outcome-can you or the other side collect?

There is more to this question than will the case succeed or fail. It is easy to obtain a multi-million dollar judgment against a company that cannot pay. Most litigation is filed against companies with “deep pockets” or involve insurable claims. Is the case about the money and, if so, can you collect? Is it about principle and reputation and, if so, does collection matter. This is true whether you are pursuing or defending a claim. This is what I consider in determining predictive results. Goals of a case must be established early on and a litigation road map created.

Economic reality-is it purely about money?

This is purely a monetary consideration involving the costs of litigation versus the costs of resolution. This completely ignores the intangible aspects, the reputation or the principles. This is only part of the equation to consider, but it must be realistic. Many times spending money in litigation results is a greater settlement for one side and a lesser settlement in another. It may take hard fought litigation to achieve the results. Sometimes it makes no sense to sue as there is nothing to gain even from a non-monetary point.

Available resources-is there commitment to the cause?

This is a mistake many make in prosecuting or defending a case. It is not necessarily about out spending the other side. I cannot stress the mistake it is to believe you can outspend the other side. It is amazing how much effort and resources many spend on meritless litigation. You must assume the other side will prosecute or defend an action to the bitter end. The real issue becomes that you must be willing to put in the time and focus on the litigation.

The best advice is to obtain early and sound counseling from a seasoned professional in making the decision concerning litigation.

Stephen Fuller is the managing partner of Fuller Sloan LLC and has practiced in business litigation and consulting for 37 years and has over 25 years representation of the founder of one of the largest sit-down casual restaurants in America. For more information, send Mr. Fuller an email.