Cavalier about lawsuits? Think again – a defendant’s perspective

Often times during business disagreements, I hear owners and executives say “let them sue us — bring it on!” While that might be our initial response in the middle of a rip-roaring business dispute, trust me — don’t let feelings and emotions drive your actions when lawsuits are involved.

Why am I writing this? I have been a defendant in both corporate and personal litigation. In all instances, I/we “won” (more on that later). Several years ago, I was named personally in a lawsuit by a vendor of a former employer. At the time I was sued, it had been four years since my resignation (four years – that’s not a typo). While working for this employer, I was paid an annual bonus. I then left this employer to pursue a new opportunity. After my resignation, my former employer failed to pay a vendor’s bill. Even though I had a binding employment contract that outlined the bonus obligation (and precisely how it was to be calculated), the vendor’s lawsuit alleged that my bonus was a “fraudulent transfer” and I had “breached my fiduciary duty” as an officer by accepting the bonus. Yes, pretty unbelievable and completely false — but sometimes that just doesn’t matter.

Unless you’ve been though the “process,” it’s hard to appreciate being a party to a lawsuit — especially an ungrounded, frivolous lawsuit. It’s hard to understand the time commitment, the financial impact and, last but not least, the emotional drain of litigation. Following are a few of my experiences that few folks understand — unless you’ve been in the crosshairs of a fit-for-reality-TV attorney.  Read on….

1. When the complaint shows up, you’ve just bought the ticket. Get ready for the ride. That’s right, when the “complaint” (i.e., the lawsuit) is served, you’re on the roller coaster, and there are only a few ways off. Within days, you’ll need to retain legal counsel, perhaps pay them a five figure retainer and, within weeks, respond in a formal court filing. That’s just the beginning of the fun and excitement. Next, there is “discovery” (production of requested documents), affidavits and possibly mediation and/or arbitration before trial. All of this is very time consuming, so be prepared to invest significant time locating documents and getting your attorney up to speed.
2. Things move at a snail’s pace – or slower. Hopefully, logic and reason will prevail and both parties will agree to an out of court settlement. If not, you’re heading into the legal “machine” of discovery, depositions, legal filings, maybe hiring expert witnesses, hearings and so forth. No one seems to be in a hurry, and the entire process can take months, if not a year or more, before the case ever gets to trial. That’s just how the machine works, and there is precious little you can do to speed it up. Frustrating, at best.
3. Sometimes, these things just don’t go away – no matter what you do.  Sometimes your case will go to mediation. Sometimes arbitration. You may try to reason with the other side and reach a settlement. Sometimes none of this works, and you’re headed to trial. In my case, I made several settlement offers – not as an admission of wrongdoing, but simply to bring the litigation to an end. Here is where business judgment vs. emotion comes into play: Emotionally, any type of compromise or settlement is just plain wrong. Rationally, however, you might want to make every effort to resolve the litigation and preserve your (or your company’s) financial resources – not to mention your emotional health. In my case, the other side’s attorney was determined to take my case to trial. He lost, but that didn’t stop him. He then appealed the case to the Colorado Court of Appeals. Another grueling 18 months later, he lost again….all the while collecting ample legal fees from his client, I’m quite sure.
4. The other side will sometimes resort to “interesting” conduct. You can’t predict what the other side is going to do in a lawsuit – and sometimes it’s just not right. In the lawsuits I have been involved with, plaintiff’s counsel found clever ways to use obscure legal concepts, out-of-context statements in depositions, and other clever ways to obfuscate the truth to their nefarious advantage. Yes, these are legal “professionals.” (My apologies in advance to all my attorney buddies….a few bad apples don’t spoil the entire bunch.)
5. Lawsuits aren’t for control freaks. If you’re the type person who is a “fixer” or a control freak, trust me – being on the receiving end of a lawsuit is going to drive you nuts. Don’t believe me? Go back and read items 1. – 4.
6. Even when you win, sometimes you don’t really win. As I mentioned above, I have prevailed in all of the legal actions I have been involved with. In the end, however, usually the only folks that win are the attorneys. Any vindication that you may feel by winning a lawsuit can easily be overshadowed by the time commitment, the emotional drain and the financial investment.

Admittedly, no lawsuit is exactly the same, and “your mileage may vary.” That said, think long and hard before saying “just let ’em sue us…I’ve got this covered!”