Should I file a lawsuit? My entire practice is filing and defending business and commercial lawsuits. So, I get this question a lot. Deciding to file a lawsuit is a business decision as much as a legal tactical analysis. For any case, it’s a three-legged stool. First, there has to be liability – a legal wrong that can be remedied by a lawsuit. Second, there has to quantifiable damages. It can’t be mere speculative damages or harm that may come someday. There has to be real damages that can be reduced to dollars and cents that a judge or jury can award. Third, the damages have to be collectable. There’s an old adage that a judgment and $1.40 will buy you a cup of coffee. A judgment by itself is worthless unless there is insurance or assets that can satisfy the judgment.
There are some exceptions, of course. Injunctive relief can be a solution to prevent a competitor from using stolen trade secrets or preventing a former business partner from violating a non-compete. This type of relief may not result in an immediate monetary award but may prevent further damage to a business (attorney’s fees are usually recoverable in such case).
Every case that I evaluate, I start with the three-legged stool analysis. If a case is missing one of the legs, it’s usually not worth the fight because it can’t support itself. Undoubtably, some cases can improve through discovery and at trial, however, the basic structure of the case must be there before a client decides to go forward with filing a lawsuit.