| > | | | | yours, or will they be turned off by a vendor who they |
| This article outlines the 3 questions you should - or | | | | view as litigious? Moreover, if you sue, chances are |
| must - have answered before you decide to begin | | | | that L will defend this case by asserting that your |
| litigation. | | | | products were defective - whether true or not - which |
| Copyright (c) 2008 Law Offices of Jonathan Cooper | | | | will force you to defend the efficacy of your products |
| You're a manufacturer of specialty labels who has | | | | in a public forum. Again, you should ponder whether |
| worked with this customer - we'll call them "C" -- for | | | | having the quality of your product publicly questioned is |
| over three years, and filled several orders for them, | | | | likely to impact your bottom line. |
| including one for over 250,000 units, which netted your | | | | (2) What is the cost to me if I DON'T sue? |
| company a profit of over $50,000. Now, after filling C's | | | | (a) No Lawsuit, No Payment - On the other hand, if |
| latest order, which was for another 300,000 units, | | | | you don't sue, you are certainly not going to get paid |
| several months have gone by and you have not been | | | | what you are owed. Worse, your decision not to sue |
| paid; and although you've never had this problem in the | | | | may lead other customers to view you as "soft," and |
| past, they've stopped taking your company's phone | | | | start trying to force you to reduce your bills, which will |
| calls. | | | | negatively impact your bottom line. |
| You inquire through the grapevine that brought you this | | | | (b) Reputation - In the same vein, your existing |
| client to begin with, and you learn that C has retained | | | | customers (as well as your prospective customers) |
| another vendor through one of C's employees' family | | | | may view your unwillingness to pursue outstanding |
| connections. While you accept that these things | | | | debts as a concession that you don't really believe in |
| happen in business, that doesn't change the fact that C | | | | the value of your product. |
| still hasn't paid you. | | | | (3) What is the likely outcome if I sue? At the risk of |
| While most people's knee-jerk reaction is that you | | | | stating the obvious, if your chances of prevailing at trial |
| should sue them to recover your outstanding bill for | | | | are outweighed by the anticipated legal fees to get |
| services rendered, that isn't necessarily the right | | | | there, you should not sue. For example, if you stand a |
| answer. The more reasoned and balanced approach | | | | 50% chance of winning the case against L, it will cost |
| would require you (and your attorney) to consider the | | | | you $45,000 to litigate the case, and your best-case |
| following: | | | | scenario is winning a $60,000 verdict, it does not make |
| (1) What is the cost to me if I sue? | | | | financial sense, on these limited facts, to litigate the |
| (a) Legal Fees - Although the old joke is that there are | | | | case. In this scenario, the better course of action would |
| only 2 certainties in this world -- death and taxes - that | | | | be to try and negotiate a settlement before |
| is not entirely accurate; if you sue, there will be legal | | | | commencing formal suit. |
| fees, and if the amount of any judgment you could | | | | In short, before you jump head-first into litigation, you |
| possibly recover will either be nullified in its entirety, or | | | | should get the answers to these questions from your |
| approach the amount of the legal fees you will incur to | | | | attorney. By establishing what the reasonable |
| recover payment, then suing is probably not the best | | | | expectations for the litigation are, it will not only give |
| option. | | | | you greater peace of mind, but will also give your |
| (b) Reputation - In addition, you should consider | | | | attorney the financial framework within which he |
| whether your other customers are likely to hear about | | | | needs to operate, thereby saving you money down |
| your lawsuit, and if so, what their reaction to it will be: | | | | the line. |
| will they respect you for pursuing what is rightfully | | | | |