Negotiation vs. Litigation
Attorneys who believe that negotiation and settlement of disputes are result-oriented people who prefer controlling the result as much as possible even if it means reducing the likelihood or the amount of a lawsuit judgment. They are principally risk averse and do not like 3rd parties to determine the result.
Litigators, in turn, prefer the process of getting to court and the possibility of a big payout. They love motions and pleadings and fights about evidence and depositions, discovery and the courtroom. They are in love with litigating as a thing in itself. The honest ones will try to tell you to cut the best deal possible. Litigation is time-consuming, expensive, and unpredictable. The risk takers found at the craps table in Vegas will tell you to always sue.
Nowadays most common pleas judges come from backgrounds at the Prosecutor’s or Public Defender’s Offices. Their experience is in criminal and maybe domestic relations matter. They frequently do not have any experience in corporate, securities, intellectual property, UCC, or commercial contract matters. In those cases they try to be fair – as they are required to do – by going very, very slowly and learning the subject area of the law. So, you had better be patient.
Frequently you have to take chances in life. And sometimes you need Tough Dutch Uncle Advice and take the deal. If you have a real legal injury and damages in excess of a $1M then litigation may be the best path. If not, work with what you have.
Only the best lawsuits go to trial unless one party is a real risk taker or overestimates its case and wants to roll the dice. I would estimate 75% of those fail. Miserably. And the losing side is then liable for court costs and expenses, or worse like a counterclaim for the other side’s damages.
But the purpose of litigation is not just to win but to get paid or to get some sort of equitable relief like a Permanent Injunction. Ask yourself: why am I suing? Can I get the same or better deal by negotiating?
Filing a lawsuit and getting to trial and getting a jury verdict or judge ruling takes lots of time. Lawyers will purposely delay, delay and delay. Yours is not the only case. Remember that.
In most commercial (contract or corporate) cases lawyers want a substantial retainer upfront that is filled back up each time it goes to zero.
Consider this:
If you sue someone and they counter-sue, you are stuck in the lawsuit. You can dismiss your case but the other party’s case lives on. You go from offense to defense in a New York minute. You are now stuck unless you settle with the defendant.
If the court rules in your favor and you get a judgment that does not mean that you get paid by the loser defendant.
The court gives the plaintiff (hopefully you) the right to seize assets from the defendant as of legal right – so long as this is done through civil process and without disturbing the peace.
The Court does NOT ORDER THE DEFENDANT to pay you. YOU the winner have to go and find the defendant’s assets and seize them by using the Sheriff to do so. This costs money by way of legal fees and Sheriff expenses.
You take the judgment, and after the appeal time has run and the defendant has not appealed, you can immediately get the Sheriff to go after the assets of the defendant if you can find those assets.
(Frequently, clever defendants move their assets around or change their ownership right before a lawsuit is filed or just after. Now you have to prove to the court that this was done to defraud judgment creditors.)
The collected assets go to the Clerk of Courts who collects them and then, after applying a fee, pays you the balance. You have to do that for each asset or account until the debt is paid.
However, the defendant still has exemption rights under state debtors law – you cannot seize so much of their assets that they become penniless and go on public support.
The defendant also has the right to file for bankruptcy. In that case, you are merely an unsecured general creditor (unless the judgment results from an intentional tort). You might get a nickel for every dollar the defendant owes you. If you are lucky.
Defendant’s having no money are uncollectible. Never sue people with no money or assets. It might feel good in the moment but when you get your legal bill it will taste like bitter herbs.
Civil judgments last 7 years in many states and then, in some states, they can be renewed. In others . . . you need to check what happens.
Sometimes it is worthwhile to roll the dice and go to court.
Other times, it is better to take an ok deal versus a great but contested result.
Do you have 1 – 3 years of your life and lots of time, sweat and money to put into your dispute? Go to court. If not, cut the best deal that you can and move on in your life.
Contingency cases in tort cases (like, car accidents, medical malpractice, etc.) cases are easier to prove than those in commercial settings where liability is more uncertain and economic damages are more questionable.
Your lawyer has to estimate the likelihood of winning, the amount of any judgment, and the likelihood of getting paid.
If the defendant does not have any money or if the judgment will effectively take all of their money, expect them to file bankruptcy. In that case, you the winner, will get not very much for your time, efforts or money.
