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Part 2 Case Analysis: Costs and Benefits of Litigating a Case

We are exploring the costs and benefits to filing a lawsuit in this seven-part series. If you have not read part 1, start here.

Ask yourself what you hope to gain by bringing a legal action. Most people want a lawsuit for one of several reasons: (1) money; (2) some kind of help that doesn’t involve money; or (3) justice.

Money

Let’s face it, dollars and cents drive most lawsuits. You have heard about multi-million dollar settlements and jury verdicts. But this may give you a wrong idea, because most cases are not worth that much. In reality, how much money a lawsuit can bring you is usually tied to the damages or injury you actually suffered.

We’ll explain. The main damages you could take home at the end of the day will be “compensatory” damages. The point of compensatory damages is to compensate the Plaintiff (which would be you) by fixing the injury, or putting her in a similar position that she would have been in if the Defendant hadn’t done something wrong. In other words, the money brings you back to “normal” or compensates you for the cost of the injury.

How much money that will take varies a lot, so similar-sounding claims can turn out quite differently. For example, take two different employment discrimination lawsuits. Suppose that both employees successfully proved they were fired on account of sex by the same very large multi-national company. One employee was a lower-level hourly employee making minimum wage, who was not eligible for benefits. The other employee was the COO, making well over six-figures, with additional stock options, and who had a contract for employment. While both employees suffered the same harm (being fired on account of gender), their lawsuits are worth very different amounts, based on the damages they may be able to receive. Supposing that both were out of work for a year, the loss of wages damages of the hourly employee might only be around $20,000, while the damages of the corporate executive might be well over $1,000,000.

You could also get punitive damages, which are meant to punish the wrongdoer so they won’t do it again. Usually punitive damages are limited by statute. Also, they are only available under unique circumstances, such as when the Defendant acted intentionally or at least recklessly. Usually, you cannot count on punitive damages.

Once your lawsuit is filed, the damages question will probably need a professional opinion from an accountant, medical professional, or another expert. But even at the beginning you can often get a ballpark idea of what your case is worth by looking at the actual out-of-pocket losses you have, whether you suffered some unique harm that should give you more in pain and suffering, or whether you might be able to get punitive damages.

Non-Monetary Relief

What is non-monetary relief? This is everything else besides money that a court can award if you win your lawsuit. Here are some examples:

  • Injunctive Relief. Injunctive relief could include a court ordering that someone do something. Integration of schools was accomplished by injunctive relief.
  • Reinstatement. You get your job back. This is common in employment discrimination lawsuits.
  • Declaratory Judgment. In a declaratory judgment action, the court could issue an order announcing, for example, who owns a particular piece of property.
  • Specific Performance. This might apply in a contract case, for example, where the court orders a party to complete its end of the bargain.

Justice

Finally, people want to file a lawsuit because of a sense of justice. Lawsuits publicly show that something wrong happened. A verdict in your favor would vindicate you. Criminal lawsuits are mostly about justice. For civil lawsuits, justice is still important. But because over 95% of civil cases settle out of court, with no public admission of guilt by the defendant, justice may be secondary to the other factors. In the end, private parties rarely bring lawsuits for justice alone, because it doesn’t make financial sense. We’ll look at that next.

Featured Image: "Hammer" by Pixabay

More articles in this series: Part 1, Part 2Part 3, Part 4

 

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