Your Rights as an Individual
An important step in determining whether to sue a company is understanding the legal rights you have under the particular circumstances. In many cases, the first step in the analysis is determining the nature of your relationship with the company and the rights that exist under that relationship. For example, a company is generally required to meet its contractual obligations or pay damages. A company is generally required to meet its tort obligations or pay damages. Likewise, a company is generally required to follow the rules and regulations of statutes of which it falls within the scope.
Breach of Contract
In the context of a contract, a party (for example, an employee) has a right to sue a company if the company has breached the contract. Many different types of agreements, such as employment contracts or agreements for the sale of goods, qualify as contracts; however, some require particular terms and formalities to be valid. In its simplest form, a contract is an agreement, usually in writing, between two parties where there is an offer, acceptance of the offer, mutual promises and consideration. If either party breaches the contract, the party who has not breached may be entitled to damages from the other party. The damages are generally based upon the actual loss that the non-breaching party suffers , expect that profits that the party had hoped to achieve from the contract are not generally recoverable. Companies are also frequently entitled to sue employees for breach of non-compete agreements where the employee had contractually agreed that he or she would not at any time compete with the company for a specified period of time after termination of employment.
Negligence
Another common basis for a lawsuit against a company is negligence. There are generally three elements to a negligence claim: first, as a result of the relationship with the company, there must have been a duty owed by the company to the injured party; second, there must be a breach of the duty, or careless conduct on the part of the company; and third, the resulting injury must have been suffered by the other party, and must have been proximately caused by the breach of duty.
Fraud
In addition to a breach of contract or negligence claim, a party may also have a cause of action against a company for fraud. A plaintiff must prove that the company knowingly made a false representation with the intention of inducing the plaintiff to act in reliance upon the misrepresentation. The plaintiff must prove that he or she did, in fact, rely upon the false representation to his or her detriment.
Statutory Violations
The scope of legal rights that a person may possess when suing a company is broad. A lawsuit against a company may also be based upon the violation of statutory regulations. For example, there are countless laws that apply to consumer purchases and regulatory standards. A company may also be liable for violations of labor laws, tax laws or labor laws.
When to Make the Decision to File a Suit
When dealing with any legal matter, the decision to sue a company should not be taken lightly. There are certain circumstances under which it is advisable to consider going the legal route when resolving a dispute. Lawsuits take time, money, mental and emotional investments and can be taxing on an individual and their family. A legal expert would be able to better assist an individual in their particular personal situation but there are some general guidelines as to when suing a company may be advisable. If a company has injured you or someone close to you, you’ve lost money or face irreparable harm, you may want to consider suing them for reparations. When deciding whether or not to sue a company, you may want to consider whether any of the following statements apply to you:
Your injury/harm was a direct result of the action(s) of the company.
You’ve reasonably tried to resolve the problem with the company without success.
You have lost money or were harmed due to the actions of the company.
You want the damages or compensation.
You want justice.
You want to make sure that the company doesn’t hurt anyone else the way they’ve hurt you.
Any of these situations may very well justify taking legal action against a company.
Hiring the Right Attorney
The prospect of suing a company may be as daunting as it is necessary, but the process starts with the selection of the right lawyer to handle the case. Finding and choosing the proper lawyer is paramount to the successful prosecution of any lawsuit. Armed with the right lawyer, you can be assured that the case will be aggressively fought, as needed, and that a meaningful settlement should be no less than if the lawsuit were prosecuted to verdict.
The first step is to find an attorney who is experienced in handling claims against corporations. Finding an attorney who has represented clients in lawsuits against corporations, and has succeeded in those efforts, is imperative. While the attorney does not have to have prosecuted claims against the same corporation, this helps, as it places the lawyer one step ahead of other lawyers who may not know the manner in which a given corporation conducts itself in litigation. Knowing how a corporation will react to legal efforts, including depositions and written discovery demands, is invaluable.
Also, there are many law firms that specialize in corporate or commercial litigation. These firms usually have an experienced corporate law litigation department with a track record of representing clients in corporate lawsuits against a variety of companies. A review of a firm’s website will give an indication of its capabilities.
To ensure that your lawyer is right for your claim, you should meet with the lawyer in-person in order to facilitate as complete an exchange of information as possible. However, do not mistake the lawyer’s interest in obtaining as much information as possible to help evaluate the case for a desire to take your claim for himself or herself. Certainly, any interested lawyer will need to know the particulars of your claim to advise you correctly, but providing the lawyer with information does not mean the lawyer will then "steal" your claim. A lawyer who shows an interest in obtaining as much information as possible about a claim, but then provides a realistic evaluation or opinion as to the merits and pitfalls of a claim is best.
Bringing a Lawsuit Against a Company: What’s Involved
Filing a lawsuit against a company is a fairly straightforward process. However, it is fraught with pitfalls for the uninitiated, and missing one of the steps can result in disaster and a dismissal of your case.
First, you have to file a legal complaint with the court. This complaint has to detail why you are suing the company. In legalese, this is called a cause of action. For instance, let’s say you ended up with a defective laptop that broke. The cause of action would be: breach of warranty. This basically states that since the laptop broke, the company was negligent in letting a defective laptop out into the world. Normally, this is enough to force the company to settle the issue for you.
The complaint has to be filed with the appropriate court, which will vary by your location and the amount of your damages. Normally, small claims court is suited for disputes between $2,500 and $15,000. Now, getting all this information right can be difficult. Even I usually recommend using an attorney for this reason.
However, once the complaint is filed with the court, you need to serve the company with it. There are several ways you can do this. The easiest way is called personal service. This means you literally have a person hand a copy to an agent of the company who is authorized to accept legal documents. There is a fee associated with this, but most personal servers will charge less than $50.
If you do not want to do personal service, you can also mail the documents to the company. You have to return a signed form to the court if you do this. This can take a little longer because of the need to mail the documents, but is totally acceptable.
Once the company has been served, it has 20 or 30 days to respond to the court with its written version of events. This is generally what we call the answer, and it damages what is known as a responsive pleading. This basically says, okay, you’re suing us, here’s our answer to your complaint.
The response contains a list of denials that specify if the company agrees or disagrees with your complaint. It may also include affirmative defenses, which I won’t go into here because basically, they are stated reasons why the company isn’t legally responsible for the situation. If you can prove even one of these, the company wins and you lose.
Once the company files its answer, your case is in front of a real court where a judge will oversee everything from that point on. Depending on the case and how the negotiations go, you may end up going through mediation before you either decide to trial or settle.
The overall process may seem simple, but it can get very complicated very quickly. Even Bar Association’s agree that the average consumer is better off hiring an attorney to handle the bulk of the prep work. Also, don’t let the timeframe scare you. You have a full year from the incident to file your complaint. If you wait longer, technically, you’ll have lost your case.
Ways Litigation Could Turn Out
Suing a company can lead to a variety of outcomes. In many scenarios, the most desired result is a settlement, where the companies agree to abolish the problem without ever leaving the courtroom. Alternatively, a company has the option to appeal any unfavorable decisions with which it disagrees. In either of these cases, however, it is advisable to consider filing an insurance claim directly with your insurer before considering legal action.
Settlements
The most desired result of a lawsuit is typically a settlement in a sufficient amount that compensates the plaintiff for his or her various losses. When damages are awarded, the ruling often requires the company to make the necessary changes to fulfill its legal obligations . Companies often opt for settlement of a lawsuit rather than taking the case to court. Sometimes, settlements do not provide as much money as was requested, but the relief provided is often enough for the injured plaintiff.
Court Rulings
Sometimes, the ruling ends in favor of the defendant. In most of these cases, the defendant can appeal the ruling, prolonging the proceedings and preventing the plaintiff from collecting any compensation in the meantime. Even if some compensation is awarded, the losing party may be liable for the attorney’s fees for both sides. In the end, it may actually hurt the plaintiff more than help him or her.
The Price of Litigation
The financial cost of litigating a lawsuit can begin even before the first complaint is filed in court. Some of the more common types of filing fees include court clerk filing fees, process server fees, writ of execution and garnishment fees, etc. As a general rule, filing fees range from about $50 to $800. Most courts also require an electronic or printed copy of the documents filed with the court clerk. If a plaintiff goes through an attorney, that attorney may charge $500 to $1,500 per hour (although most charge a flat fee for an entire case). For a simple case, attorney costs can reach $20,000 to $75,000 if the case is complicated and drawn out. An average case requires about $10,000 to $25,000 in attorney’s fees.
But costs do not apply only to the plaintiff. If the plaintiff loses a lawsuit involving private parties (meaning not against a public entity or government), the plaintiff pays the defendant’s attorney’s fees. A losing plaintiff also pays court and process server fees.
A lawsuit is also risky in that the defendant could file a counter-claim against the plaintiff. So, even if the plaintiff believes she has a strong personal injury case, there is the possibility that the defendant could prove that the plaintiff was at least partially responsible for the injuries she claims. In that case, the plaintiff could end up paying not only her own fees, but also the defendant’s fees and still walk away empty-handed.
In addition to financial risk, suing someone is emotionally draining and psychologically taxing. It is often said in the legal community that "most cases are won in the discovery phase". Discovery, however, involves depositions and interrogatories, which can drag on for weeks or months. Emotions can run high, so the plaintiff can be overwhelmed by the process. There is also a chance that, because of high emotions, the defendant could try to retaliate against the plaintiff, which could lead to another lawsuit. For example, if the plaintiff posts disparaging comments about the defendant on social media, the defendant might sue for defamation. In this way, one lawsuit could easily turn in to another, so the plaintiff’s emotional and financial liabilities balloon.
Litigation is not a bad way to solve a dispute, but keep in mind that it is a gamble. Like poker, the more the plaintiff knows going into the game, the easier it is to play with more confidence. You need to know when to hold them and when to fold them. Be sure to tally the risks before betting your life’s savings when asserting your rights in court.
Other Avenues for Resolving Disputes
Suing a company is not the only way to resolve a dispute when you have a problem with a company. There are other forms of conflict resolution that may be preferable: (1) arbitration; (2) mediation; and (3) negotiation, whether independently or with the assistance of a professional.
Arbitration
An arbitrator is someone that helps both sides learn about each other’s positions and come to terms on a solution. The arbitration process is more similar to a trial than a mediation. However, a trial is much more formal. There will be rules of evidence that must be followed and grounds for objection. Also, a verbatim record will be kept.
Mediation
A mediator is a third-party that helps both parties come to terms or "make peace" on a dispute. A mediator does not decide what should be done. The mediator merely facilitates discussion. In arbitration or mediation , the cost may be shared between the parties. There is no expense to file or serve. A judge does not oversee the process. Each party is likely to use an attorney.
Negotiation
Negotiation is the most informal of all three methods and is just that…a direct dialogue between the other parties with no third-party intervention. Unlike mediation and arbitration, there are no rules of procedure. There is no judge to hold parties accountable. A lawyer is not necessary. The costs are usually minimal. However, often, the parties are not able to negotiate until the lawsuit is filed. An additional consideration is that torts are often times unintentional. However, if a company consistently engages in the same behaviors, it is likely that they did so intentionally. Therefore, even though you attempt to resolve the matter, it is likely you will end up filing a lawsuit against that company.