When to Proceed in a Lawsuit for Damages

I am Richard Annunziata, one of ABN Law’s founding partners and as a litigator for 17 years, I can tell you there are three things a client and attorney should consider before filing suit. First, the right and the wrong; secondly, the economics, and third, the impact on your life.

Generally, one must take a good hard look at the facts of a case. You and your attorney must assess the facts as they really are, and not as you or your attorney would like them to be. This means that you and your attorney will examine the circumstances of your dispute (for example the parties, their contracts, communications, interactions, actions, inactions and overall events leading to the dispute) and determine the various claims that could exist.

As part of the process, your attorney will be assessing whether your facts give rise to a cause of action, or at the very least, that a reasonable argument that can be made on your behalf before a judge or jury. If the facts of a case do not support a claim, or if a reasonable argument cannot be presented, you and your attorney should think twice before proceeding to the court system.

Once the facts are considered and if there is enough to support a claim and/or defense, the next consideration is the law – do you have a legal claim based on the facts of your case? This part is typically handled by your attorney and, based on their experience or the issues at hand, they may have an answer immediately or may need to research how other similar cases and/or claims have been handled by the courts.  If the facts and the law together give you a reasonable argument and claims to assert, then you’ve generally covered the first basic step.

There are three things you should ask yourself from an economic standpoint:

  • What can I potentially recover?
  • How much will it cost?
  • Can I really afford it?

Having represented people across the economic spectrum – from those with hundreds of millions of dollars to those who have nothing – I can tell you that economics can and will determine whether or not you should or could pursue a claim sometimes even more than the facts or law in some instances.

This is the time for good business decisions to be made. Throwing good money after bad is not something to do lightly. But that does not mean that you should shy away from asserting your rights if you’ve been wronged either.  Ideally, the best situation for progressing forward is to have a situation where the amount you’re seeking is substantially more than what it will cost, you can afford to carry the lawsuit to conclusion, and you may have the ability to seek and recover your attorney’s fees.

Sometimes, it is worth it to be able to recover just the damages you’re due, even if it costs you the same or more to get that judgment. For example, if moving forward with a lawsuit will cost you x and you will only recover y, and you have a basis to potentially recover fees and costs, a lawsuit may be the right way to go from an economic standpoint.

There are also instances where the damages are quite low, but the potential to recover fees and the cost of carrying the lawsuit are not an issue. The ability to recover fees should be a critical part of the discussion with your attorney.  If you’re in a situation where you cannot afford to carry a lawsuit, you can discuss the possibility of your attorney handling your case on a full or partial contingency fee (which is a business decision you make together—especially if the potential for recovery is high, the damages make sense, and you can under no circumstances afford to carry the litigation).

Alternative fee arrangements should also be discussed if applicable. Your lawyer and you should discuss the economics of a lawsuit to make sure it is right to proceed for both of you. It has to make sense for everyone involved. The most important part of the economic decision is to be honest with yourself and your attorney about what it is you’re fighting for, whether you can afford to carry a litigation, and for you both to assess whether it’s worth pursuing.

Also consider the impact on your life. Believe it or not, you will be affected by a lawsuit other than just economically. Your time and energy will be affected.  Typically, you will need to be kept up to speed, make decisions with your attorney, spend time away from work and/or family addressing the lawsuit on some level. This is especially true when you are required to prepare for and attend meetings and court proceedings, and your focus pulled away from your business and personal needs at certain points in any lawsuit.

If these are not an issue, great!  If they are, you should discuss this with your lawyer who can counsel you as to how to address this. At the end of the day, only you know whether you have the wherewithal for the impact that litigation will have on you.

The information contained in this article is provided for educational and informational purposes only.  The content of this article is not and should not be construed as legal advice, an offer to perform legal services on any matter, and should not be construed to form an attorney-client relationship.  This article should not be construed as a legal opinion on any specific facts or circumstances. The information contained in this article is intended for general information purposes only, and you are urged to consult a lawyer concerning your own situation and any specific legal questions you may have.