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Should I Even Bother Filing Suit? One Lawyer’s Take on a Commonly Asked Question

gavel1-300x169This is a question that I am asked over and over in my practice: Should I even bother?

It is a good question. A valid question. Why? Because filing suit, hiring attorneys and spending the next year (or more) and thousands of dollars in litigation is not something that should be taken lightly.

So, how do I answer the question? I answer by asking questions. Mainly, it is three questions, with several sub-questions that follow: How much is the case worth?; Who are we suing?; and is there an alternative to filing suit? Once we answer these questions and their follow up questions, I can usually put together a case plan tailored to your case that will help us determine what steps to take first, including whether or not you should even bother filing suit.

Question One: How Much Do They Owe You?

This is a very important question. If they only owe you a few hundred bucks. Either say “forget it” and move on, or take it to justice court. The cost of litigation is too high. However, if it is thousands, or potentially thousands of dollars, then you need to take a hard look at whether or not you should file suit against this person or entity. This is especially true if it is based on a contract. In Texas, if you incur litigation expenses related to a contract, such as attorney’s fees, you may be able to recoup the cost of your lawyers, if you win. Now, that is not a guarantee. The statute is a “may” statute, not a “shall” statute. So, the judge may order attorney’s fees, but they are not required to do so. However, in my experience, someone always gets at least some of their attorney’s fees if they have won, even where they are not really entitled to them because no contract or statute says they are entitled to them. Sometimes judges just do it.

There are other statutes that require attorney’s fees. The most apparent, and often used, is the Deceptive Trade Practices Act. This one is a “shall” statute. If you win, you get your attorney’s fees back.

The reason I harp so much on recouping costs in relation to the amount in controversy, i.e., your damages, is because these are still, in all likelihood, running costs. You will have to pay your attorney up front unless they are working on contingency. Because of this, whether or not attorney’s fees are recoverable in the action is important, especially if you are on the lower end of the damages spectrum.

Then there are times when the amount in controversy is either so high that you have to do it or risk completely losing out or the amount in controversy is not the deal breaker. Sometimes it is the principal of the matter. Sometimes the damages are not monetary. Sometimes it is about your reputation.  By reputation, I do not necessarily mean that you or your business have been libeled. I mean that the other party has taken advantage of you. Defrauded you in some way. In these cases, yeah, you have lost money. But that is not really the issue. The real damages will ensue if you let this person get away with it because other people may take notice. This person got one over on you and you let it go.

Don’t think reputation like this matters in business? Well, there is a reason that Guest and Gray has a strict policy that we will not just be hired to send demand letters. If we send a letter, we are prepared to back it up. If all the client wants to do is send a letter and see what happens, but if they don’t pay, we do nothing, then we do nothing at all. Why? Because our reputation matters. If we send a bunch of demand letters and never back them up, or file a bunch of lawsuits against people but never litigate them, then what are we? We are just a bunch of paper Tigers who never back up what our word says we will do. That is why so many lawyers call themselves “litigators” and “trial lawyers”. That is our stock-in-trade. Our reputation is our livelihood. I am sure it is yours, too.

So, in all, there are numerous factors that play into the damages portion of whether you should even bother with filing suit. The amount of damages, type of damages and whether you can get attorney’s fees back if you win. Those are all questions that should be given proper thought before moving forward.

Question Two: Who Are We Suing?

Next we need to think about “who are we suing?” Is this an individual or an entity? Will we be going against an insurance policy that they may have?

If it is an individual, then we start out on the spectrum of “don’t do it” and we either work our way up or down from there. Suing individuals is, for the most part, a waste of time. Why? Because no one has any money or assets, and even if they do, it does not mean that you will be able to get to it. For you to be able to get to an individual’s assets there are several things that have to work in your favor, including the person having significant assets, in order for you to even think that suing a person individually is a good idea.

Now, don’t get me wrong: I sue individuals all the time. Each case is its own set of facts and you must look at the case with fresh eyes each time. The most frequent case I have involving suits against individuals is suing bad contractors. Guys (and ladies) who decided that they wanted to take a bunch of money from people to perform work on their homes or businesses and then they decided that they’d rather have the money. In most of these cases, these contractors are doing work under a D/B/A, or doing business as, i.e. John Doe d/b/a Honest John’s Amazing Construction Company. These guys have business assets that we can go after to collect the judgment.

The second most common suit against individuals in my practice is personal injury lawsuits. When you file suit in a personal injury case, you sue the person who wrongfully injured you. Although you almost never speak to or deal with the at-fault party, but instead their insurance company and its attorneys and adjusters, you still sue the person in their individual capacity because they are the one who committed the wrong, not their insurance company. In these types of cases, you are seeking recovery not just from the individual, but from their insurance policy. In all likelihood, you are only going to settle with the insurance company and you will never take a dime from the at-fault party’s actual bank account. Why? see above where I mention that individuals do not normally have any money or assets that we can go after anyway.

On the other hand, when suing an entity, there are several viable reasons for doing so: (1) they have money; (2) they carry insurance that will cover certain losses; (3) they are more likely to settle in order to avoid litigation costs and injury to their reputation. There are really only two types of “litigation” here: individual suing a business, or vice versa, usually for some consumer transaction, or a business against business where a breach of contract incurred or there was some tortious interference with a contract. In these types of cases, you sue the entity in almost every situation. Recovery for the client is much more likely against a business entity as opposed to individuals.

Question Three: Is There Some Alternative To Filing Suit?

This is something that I wish more lawyers would embrace. Is there another way of handling this dispute as opposed to filing a lawsuit? We could try some alternative dispute resolution, mediation, settlement conferences, etc.. in order to try and get the matter resolved prior to filing suit. In most cases, this will not be an option. However, that does not mean that it shouldn’t be addressed in each case. What lawyers often forget is that our duty is to our client, not our bank accounts. If there is a way to resolve a dispute without driving up legal costs, we should look into it and see if it is a possibility for this client in this case. Just because it didn’t work for one client does not mean that it won’t work for another. Each case is its own set of facts, and they need to be properly addressed and analyzed so that a good and competent case plan can be put in place. Otherwise, you’re leaving options on the table that could potentially benefit your client and end the matter rather quickly. In each case, that is something I look into. Although it is only a possibility in a small percentage of cases, you never know whether this case will fall into that narrow category until you think you about it.

And now that you know this, why would you settle for an attorney that does not want to cross every “t” and dot every “i”?

CONCLUSION

As a lawyer, I want to help my clients when they have been wronged, regardless of the case, its value, or the other party. However, in each instance, I must fully investigate each client’s case and determine whether or not it is in the best interest of the client to pursue the case. In a vast majority of the potential clients that I talk with, the vast majority technically have a case. However, in certain instances it simply does not make sense to pursue the matter. Either damages are minimal or the at-fault party is judgement proof, or some other reason, that makes the risks involved with litigation outweigh their benefits.

I believe that doing this probably costs me some cases and that is “okay”. Why? Because it is far better than having a lot of clients dissatisfied with the results of their case. Would you trade a dollar for a penny? Would you spend $5,000, $10,000 or even $15,000 knowing that, in the end, you are probably not going to get anything? I certainly would not. Here is an even more egregious question: Would you trust an attorney that didn’t even discuss the possibility of not recovering money on your claim before they took your case and started billing you hundreds of dollars an hour? I certainly would not. I would be livid.

I believe that informing my clients creates a relationship that is built on trust. I believe that my client’s deserve to know all of the facts of their case and whether or not my work will have a return on the investment they make when they hire me or my firm.

GUEST AND GRAY IS A DIFFERENT KIND OF CIVIL LITIGATION LAW FIRM

Scales-300x132Here at Guest and Gray, our civil litigation team takes a comprehensive approach to litigation and case management. We tailor a case plan for the needs of each client and each case. We are not a cookie-cutter litigation team. Your case is not just like our last case. It is its own and should be treated that way. We also know that at this point, we have probably handled several hundred cases much like yours, and by using our experience and expertise, we can tailor a plan for each case that best suits it in order to maximize your results.

Our method is not new, its just different in the legal community. It is a more customer service oriented where the client’s needs come first. We call it the “Guest and Gray Difference”. If you have a civil matter in the Dallas, Rockwall or Kaufman county areas, you need to call the civil litigation team at Guest and Gray and speak with an experienced attorney. The call is free. The consultation is free. Call today! (972) 564-4644.