Two Major Questions to Ask Yourself Before Filing a Lawsuit

If you spend much time watching the news then you may be under the assumption that you can file a lawsuit for just about anything, and that suing someone is a simple process.

This is not necessarily the case.

Questions-to-Ask-Yourself-Before-Filing-a-LawsuitWhen your company has been financially wronged, choosing to file a lawsuit is not a decision that should be taken lightly. Certainly, you should not be taken advantage of and you have every right to pursue restitution. However, there are two very important questions that you need to ask yourself before making the choice to enter into a lawsuit.

Two Question to Ask yourself before Filing a Lawsuit

How much money have you lost, and is it truly worth pursuing? As a business owner, you should be very familiar with the term “cost-benefit analysis.”[1] This systematic approach to decision making weighs the costs of taking some sort of action versus what you stand to gain.

You probably use cost-benefit analyses every day to make decisions about your business and appraise how desireable certain policies and actions may be. It is vital that you apply a cost-benefit analysis to your choice to file a lawsuit as well.

The truth is, litigation is a time-consuming and expensive process. Not only do you have to weigh the quantifiable potential court costs, but any other affects the lawsuit could have on your company, such as how it could impact community goodwill. If you didn’t lose a significant amount of money, it may not be worthwhile to sue those who wronged your company.

No matter how angry you are over the dispute, you need to take a level-headed, business-like approach to your decision, apply a cost-benefit analysis, and base your decision on whether filing a lawsuit would actually be the best move for your company. Even if you feel strongly that your company is in the right, the answer could very well be “no.”

The second question you need to ask yourself is whether or not the money you stand to gain from a lawsuit is actually collectible.

As a matter of practicality, even if you win a lawsuit, there is a reasonable chance that the person or entity you are suing does not have the funds to pay the award. Consider whether or not the potential defendant in your lawsuit has enough funds or any form of insurance that would allow you to actually collect any damages if you win the case.

If they do not, then why should you waste money litigating for an award you will never actually receive? This question should also enter into your thinking with regard to your cost-benefit analysis as well.

If your company has been financially wronged, you should always consult with an experienced and knowledgeable business attorney who can help you decide what form of legal action you should pursue, if any. Please contact the law office of Muir & Associates if we can assist you in making that decision.


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Author Bio

Jane Muir

Jane Muir is a Shareholder and Managing Partner of J. Muir & Associates, a Miami business law firm she founded in 2018. With more than 13 years of experience in business, she is dedicated to representing clients in a wide range of legal areas, including business litigation, contracts, corporate formation, insolvency, nonprofits, partnership disputes, and other business law matters.

Jane received her Juris Doctor from the University of Miami School of Law and is a member of the Dade County Bar Association and Coral Gables Bar Association. She has received numerous accolades for her work, including being named among the “20 Under 40” in 2016 by Brickell Magazine. Super Lawyers named her a Rising Star from 2014–2019 and selected her for the Super Lawyers status.

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