June 18, 2014

The Most Popular 1,265,974 Myths About Lawsuits


Myth #1: There are 1,265,974 popular myths about lawsuits.

I suppose there could be, but I don't know of that many. In fact, I don't even know of that many unpopular myths about lawsuits. But a big number always makes things seem important, which is why a plaintiff will almost always sue for the biggest possible number — not for a reasonable number that makes sense.

Myth #2: Lawsuits are efficient.

Lawsuits are sometimes efficient. American court processes are certainly more efficient than those of many other nations. However, "efficient" still means that: (1) it will be at least a year before your case goes to trial (and perhaps much longer); (2) an obstructionist opposing party or lawyer can add layers of delay and cost for no good reason; (3) a trial judge could make a critical (but mistaken) legal ruling that you won't be able to fix until you get to the court of appeals about three years later; and (4) time and energy you want to devote to your business, family, or favorite charity will instead be eaten up by depositions, hearings, searching through paper and electronic files for pertinent documents, and preparing for and attending trial.

Myth #3: Lawsuits may be cumbersome, but my victory will make it worthwhile.

The flaw in this myth is obvious: both the plaintiff and defendant in any lawsuit would say this.

They can't both be right.

Only one team can win the World Series. Sometimes the team that plays better wins. Sometimes the team that played well, but second best, wins because of a critical error by the other team or a grand slam homer by a hitter otherwise batting .198.

Similarly, while most wins and losses at trial are directly connected to who had the better case, some are the result of witnesses who got tongue-tied or the fact that jury forepersons disliked critical witnesses for reasons nobody understands.

Trials are made up entirely of people, and people are never entirely predictable.

If you and the other side to your contract can't agree what the contract means even though you were involved in negotiating it, then there is obviously a risk that a judge or twelve people in a jury box may not read the contract in a way that will make you happy. At a trial, a judge or jury who knew nothing about the situation before the trial started will tell the people who knew everything about the situation where they stand.

Myth #4: Trials are unpredictable and can be cumbersome. Therefore, I should avoid them.

If people never drove because they could end up in accidents, the highways would be empty. But of course, they are not. We drive because it is convenient and often necessary, even if driving presents risks and uncertainties.

So it is with litigation. If the other side to your contract insists on breaching it and cannot be made to see reason despite your best efforts, then the courts are your mechanism for enforcing your rights. But entering into litigation should be a carefully considered decision. Can you recover your attorney fees from the other side if you win? Can the other side recover its attorney fees from you if you lose? Can you determine if the other side has assets to pay a judgment even if you get one? Will a jury agree with you that contracts like this NEVER mean what the other side says this contract means, even though the jury members have never seen such a contract before?

Myth #5: All lawsuits should settle before trial because trials are inefficient and unpredictable.

See discussion below of Myth #6.

Myth #6: Showing an interest in settlement once a lawsuit has become necessary will prolong it by signaling weakness to the other side.

Myths 5 and 6 are "flip side" myths, and both are wrong.

Lawsuits are indeed complicated, expensive, and they can be unpredictable. It is therefore not a sign of weakness to look early and seriously for a way out that makes sense. I view an opposing party and opposing attorney who raise settlement possibilities early as smart business people.

On the other hand, the other side must recognize your willingness to take the dispute to trial if the other side will not be reasonable. Although the threat of continued litigation is just that — a threat to the best interests of both sides — it is also leverage. It should be viewed and used as leverage.

This requires settlement negotiations that make clear the distinction between a willingness to be reasonable and a fear of the outcome of a trial. I believe that such negotiations should almost always take place, but they need to be the result of a carefully planned settlement strategy.

This article is intended to inform the reader of general legal principles applicable to the subject area. It is not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations. For more information on this topic, please contact marketing@jordanramis.com or call (888) 598-7070.

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