Tuesday, April 19, 2016

Is it worth suing?

Sometimes things happen in life that give rise to a legal claim but are not worth pursuing.

Let's suppose you bought a tin of beans from a store and when you opened the can the beans had turned rancid. The store refuses to refund your money. Technically you have a valid legal claim but if your loss was the price of a can of beans only then you would be foolish to proceed with a statement of claim. Suing over a few dollars is silly.

The can of beans example is obvious but even larger cases can be financially too small or too uncertain to make a law suit worthwhile. That's largely because it costs a great deal of money to go to Court. Even a matter in small claims court can cost thousands of dollars if you have a lawyer and if you proceed in the higher court the costs rapidly move into the tens of thousands of dollars.

A one week civil trial will cost between $25,000 and $100,000 in fees depending on the case and the seniority of the lawyers.

What's more, even if you have a good claim for significant damages there is no point in suing unless there is a good chance of recovery. An example may help to clarify. If you get a judgment against, say, the Government of the NWT for ten million dollars it will, after all the appeals are done, be paid. If you get a judgment against me for ten million dollars it won't be paid ever because I don't have ten million dollars and am not likely ever to have that much money. A judgment is only worth what the defendant can pay.

This means that unless a case has significant damages and a real chance of recovery it probably does not make sense to sue.

Sometimes people ask me to sue where their damages are low or recovery unlikely as a matter of "principle". I always discourage that. The legal a system is a way of trying to resolve civil disputes; it is not a way of making a political or moral point. In civil law "principles" can be very expensive indeed.

That doesn't mean you never sue where damages are low or recovery unlikely but it does mean that when you do sue it should be for a practical reason.

Some years ago a school teacher was the subject of a chain letter suggesting the teacher was a child molester. The author of the letter was basically bankrupt and recovery of any damages was inconceivable. Nevertheless the teacher asked me to sue and we got a judgment – even though we knew the judgment was financially worthless. The judgment had no monetary value but when the teacher was asked about the chain letter the teacher could point to the judgment and say he was vindicated – that had a real value.

Law suits are costly and take a lot of effort. Before starting a law suit consider carefully if it makes sense to spend that money and invest that effort.

5 comments:

Anonymous said...

Heard a great line on this topic recently: Best to avoid the courtroom as you would an operating room.

Anonymous said...

Best to avoid James Morton representing you, he will scam you, steal from you, deceive you, lie to you, take as much money as he can from you, and sell you out to the other side.....ask him why he got dumped by his former law firm to end up as a cockroach hole in the wall worm chasing legal aid cases.....a true scammer - the worst of the worst.

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