The Cost of Pursuing a Lawsuit and When It Makes Sense
Deciding to sue someone is a significant and often complex decision that requires careful consideration. While the law grants you the right to seek remedy for any perceived wrongdoing, taking legal action is not without its challenges and financial implications. Understanding the costs and risks involved is crucial for making an informed decision about whether to pursue a lawsuit.
Legal Basis for Suing
One can sue another individual or entity if they believe that their rights have been violated according to either statutory law or contracts. A breach of contract is one common basis for a lawsuit, provided that the contract is valid, and one party fails to fulfill their obligations without a recognized legal excuse such as impossibility of performance. The legal rights at stake can range from torts—intentions such as assault or battery, negligence, or strict liability—up to legal rights provided by various statutes, such as those related to employment.
Financial and Practical Considerations
Deciding to take legal action is not just an emotional or ethical decision; it demands a careful evaluation of financial and practical factors. While legal rights might seem just, the reality of the legal process can be far from simple and straightforward. Here are some key considerations:
Significant Financial Risk
Probably the most pressing concern is whether the cost of pursuing the lawsuit is worth the potential rewards. Unless you have an airtight case with almost zero chance of losing and supported by the best law firms in the world, the odds of winning are slim. Even with a strong case, legal proceedings can be exceedingly expensive, with costs including legal fees, court expenses, expert witness fees, and other incidental costs.
Legal representation is often charged on a contingency or hourly basis, which means you may have to pay high legal fees upfront, even if the lawsuit is unsuccessful. Additionally, if the case takes a long time to resolve, the associated ongoing legal and related costs can accumulate quickly.
Marginal Returns
Even if you do win the case, the financial payoff may not justify the effort and expense involved. If the defendant is an ordinary individual or a small business, winning the lawsuit might mean recovering a significantly smaller sum than the legal costs and time invested. This is often referred to as the marginal return on your legal investment. The defendant may not have the financial means to pay out a large sum, and you could find yourself in a situation where you spend more than you recover.
Organizational Considerations for Corporations
For corporate entities, the decision to sue can present additional challenges. Corporations often have more resources to contest lawsuits, and their victories can be far-reaching. However, suing a corporation can also lead to brand damage, media attention, and potential PR nightmares. The fight for public relations and the potential impact on business relationships can be significant, even if the legal claims are considered valid.
When It Makes Sense to Sue
While the potential financial and practical challenges are significant, there are still scenarios where seeking legal action can be justifiable:
Stakes High and Revenue in Question
In cases where the stakes are extremely high and there is a direct threat to your business or financial interests, pursuing legal action might be necessary. This could include situations where a corporation is defrauding your company or where an individual has breached a significant contract that has caused substantial financial harm.
Moral or Ethical Obligations
There are also scenarios where moral or ethical obligations play a critical role. If an individual has committed a crime that goes beyond financial gain, such as a serious personal injury or property damage, seeking justice becomes more than just a financial decision. There may be a sense of personal justice that drives the decision to sue.
Conclusion
Deciding to sue someone is a multifaceted process that requires a thorough understanding of the legal landscape, the financial implications, and the potential outcomes. While the legal right to sue exists, the practical and financial considerations often present a significant barrier. Weighing all factors carefully can help ensure that a lawsuit is pursued only when it is truly justified and beneficial.