When Should You File a Lawsuit?

[This month’s article is colored by having just finished two of the best written novels I’ve read in many years. One is The Rent Collector, by Cameron Wright. The other is Mary Coin, by Marisa Silver. Both talk about real estate in a broad sense, but more, by far, about human existence in markets none of us ever want to know. The books are available at a wonderful little book store in Niceville (and probably one or two other places as well).]

Too long ago I visited Alaska. I saw there, and did not bring home, a most unsettling picture of 2 elk antlers stuck together from mortal combat. The antlers were sun-bleached and abandoned on a hillside, the bodies of the animals long since eaten away and gone. What a bleak picture. Yet I wanted it for the wall in my office because it reminded me of too many litigants in a Court case. There comes a time when the honor and glory of the fight ought to be weighed against the costs of the struggle. If someone could have told those 2 elk that their horns would become forever locked together, to die from starvation, eternally glued to a mortal enemy, would the fight have been so important?

Twice in the last month I have talked to parties to bygone lawsuits who were desperately trying to figure out how to pay for the consequences of a long court struggle. In one case a guy was selling what sounded like a great condominium unit, just to get the money to pay for his courtroom losses. Looking at the suit, it was so stupid and poorly considered that it never should have been filed at any price. In the other, a person had lost his business trying to defend in a Tennessee court against a partner who sued him. He “won” the lawsuit, but the process took 8 years, a jury trial, and all his business assets. Now he’s stuck trying to figure out how he can save his family from losing its long-held investments in other states.

Judges and lawyers come to understand that when conflicts arise, unlike the law school analysis of the problem, the contest is not just to see what yesterday’s courts said about who should win. In fact, a trial, and especially a jury trial, costs so much and risks so much that it is typically a loss for both sides. The real challenge for lawyers is to get to a satisfactory resolution quickly and as inexpensively as possible for the client. Testosterone has no business in that equation. Unlike the lawyer, the client’s business is not law practice. If the attorney gets through a trial, wins all the marbles, and the client has spent all the money that could have been spent on new employees, equipment, or for his own profit, then even the attorney is not a winner, because chances are he will no longer have a client. “Winning at all costs”, is only for elk. And then only the young and stupid; elk that get old know better.

Some will argue that most contracts, and many statutes, allow the winner to be awarded attorney fees from the loser, and they are exactly right. But litigation will put many people out of business, even if it’s the other guy. Unless you subscribe to the view that the world always belongs to the stronger, then society is no better off because one business succeeded in the courtroom, while another went out of business because of a jury’s verdict. In addition, an increasing number of people don’t have the resources to pay a judgment even if you get one. So what good is a judgment that the guy owes you, and even your legal fees, if you can’t force him to pay the judgment?

There is another cost that most people should factor in. Driven people are driven by their thoughts. If you are truly driven to learn golf, your last thought in the evening might be your golf swing. Your first thought the next day may be that as well. In tennis, it will be a nicely hit forehand, or how to hit a backhand without embarrassing yourself. For many people in a lawsuit, especially one that means a lot, their last thought in the day will be about that lawsuit. Their first thought the next day will rehash yesterday. During the day their conscious thoughts will return to the lawsuit, even though they try to crowd it out with things they can do something about.

Even if you can manage the financial burden, can you also handle the emotional weight of a lawsuit? Lawyers live in that world, and for them it’s tough. You don’t, and for you it will be personal.

A lawsuit is a bit like invading Iraq. The outcome is difficult to predict, hard to control, and expensive. You should file a lawsuit only when all other reasonable solutions have been tried, and then only after deciding that the probable benefit outweighs the probable cost.

[As a postscript, I have been told that lawyers will not appreciate this article. To the contrary, in my world most lawyers agree and often give the same advice. They know that their first job is to avoid getting caught in a rush to the courthouse, even if they think they can “win”. I also have to add that there’s a reason every time there is a populist revolution somewhere in the world they run to a copy of the Declaration of Independence and the U.S. Constitution. It’s because in spite of its faults, and its expense, ours is still the best legal system in the history of the world. I am proud to play a role in that system.]