4 things to consider before issuing a lawsuit
How do you know when it is worth it for your company to litigate, and when you should pursue other methods of recovery?
There are times when litigation is appropriate and times when it is not. We invite to analyze the situation with these reminders:
Cost/Benefit
First and foremost, you must do a cost/benefit analysis of the potential lawsuit. As a business owner, you should be very familiar with weighing risk versus reward in your decision making process. As with any business decision, you must weigh the various risks involved in filing and potentially losing a lawsuit versus whatever it is you stand to gain by winning the lawsuit. If the reward outweighs the risk, then litigation may be the right approach.
Chance of winning
Take an objective look at the details surrounding your case and ask yourself, “Can I really win?” You may be 100% confident that you have been wronged and you deserve compensation, but if you don’t have the evidence or there is some other reason that you stand to lose the case, then it is probably not worth it for you to pursue legal action.
Alternatives
Make sure you consider all possible alternatives to litigation. Don’t assume that some other method of recovery won’t work. You may be able to simply send a demand letter and that will be enough to resolve the dispute. If not a demand letter, some other settlement or alternative form of dispute resolution like mediation may be a better route depending on the circumstances of the case.
Time
How much time are you truly willing to spend mired in litigation? It is no secret that litigation can be a long and drawn out process. Think about how important it is to you to win the case and weigh that against your opportunity costs. If you are busy with a court case, that is time you will not be able to spend on your actual business, improving your product and making money.
Alert
Keep in mind that this is not constitute legal advice for your specific situation. You should always consult with an attorney like those at the Trembly Law Firm before pursuing any form of legal action.
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