Litigating Your Case

Summary of the “Life” of a Lawsuit

Deciding to file a lawsuit.

At the beginning of any dispute, tempers run high and one or both parties to the dispute has a strong desire to sue the other party. This is a natural reaction. In fact, in many cases filing a lawsuit is a necessary step. Why? It shows the other party that you are committed to “doing what it takes” to resolve the dispute. In this light, filing a lawsuit may actually encourage settlement of the dispute, not litigation.

Most lawsuits that are filed actually settle out of court.

Once a lawsuit has been filed, each side will generally perform its own “cost benefit analysis.” In other words, the parties will each look at an estimate of their likely expenses, specifically 1) attorneys’ fees, 2) expenses of litigation (including costs for depositions and court reporters), and 3) the more difficult expense to estimate, their time spent away from other productive tasks. The party will then need to compare those expenses to what they anticipate winning.

An example would be as follows. Suppose a party estimates that a case will require approximately $10,000.00 in attorneys’ fees to litigate. Let’s also assume that the party feels there is a reasonably strong likelihood that, if they win, they will be entitled to recover $20,000.00. In this case, a party might decide to settle the case if the defendant offers to pay them $12,000.00, especially if that offer is made right after the suit is filed.

This type of analysis occurs daily in the judicial system. In the late 1990's, the University of Georgia conducted a study on civil lawsuits in several counties (Bibb, Cobb, Fulton, Gwinnett, Irwin & Oconee). Remember, civil lawsuits are those between individuals or companies, as opposed to criminal lawsuits that are prosecuted by the state. The study analyzed court filings from 1994 to 1997 and revealed some interesting facts. First, only five percent (5%) of cases that were filed were actually tried to a judge or jury, i.e., 95% of the cases settled out of court.

Even if you do win, filing a lawsuit is not like playing the lottery - don't expect to "hit it big."

While juries are generally thought of as being generous, the above-referenced study did not come to this conclusion. In fact, of the 829 cases that were tried during the study period, plaintiffs won only a little more than one-half (½) of the cases decided. More surprising in some respects is that plaintiffs were more likely to win their cases when presented to a judge rather than a jury. Also, when plaintiffs did win, damage awards were generally modest. The study found that verdicts of $1 million or more were “exceedingly rare.” Finally, punitive damages (damages that are meant to “punish” another party for intentional misconduct) were awarded by juries in only 15 of the 3,700 cases in which they were pursued.


What can a party who is filing a lawsuit learn from the statistics above? First, realize that if you do file a lawsuit, you are never guaranteed of winning. As shown by the UGA study, in the 829 cases that the study analyzed, the plaintiffs won only about 450 of those cases. If you have ever tried to convince your friends or family that you were right on some issue, just imagine trying to convince a group of 12 skeptical strangers that you are entitled to what you are asking them to give you. Once again, there is no such thing as a certain victory in court.

Second, if you do win, don’t count on winning “the lottery.” In general, the law only allows you to recover your actual damages. Your damages are usually limited to the direct financial harm caused by the other party. For example, if a party’s claim is one for breach of contract, the party will generally only receive compensation for the actual amount of that party’s damages. Most contract and business related cases do not allow for “pain and suffering” or “mental distress” and juries are generally skeptical of such claims.

Now that I have filed a lawsuit, what happens next?

Litigation is a time-consuming process. There will be periods of time when a lot is happening and there will also be periods of time when nothing happens. This will be aggravating but it is simply how the system works. Remember, there are thousands of cases in addition to your case and they all must go through the same process.

Filing lawsuits in magistrates’ court

If your claim has been filed in magistrates’ court (small claims court), you will have a resolution fairly quickly, probably within 60 days of the date of filing. The procedure is as follows. Once a lawsuit is filed, a copy of the lawsuit is delivered to the defendant by the sheriff. The defendant has 30 days from receipt of the complaint (“service date”) in which to file an answer to the lawsuit. If he or she does not file an answer, they will be in “default.” If they do not cure their default by filing their answer within 15 days after the default date and paying the plaintiff’s court costs (filing and service fees), the plaintiff will automatically be entitled to judgment.

If the defendant files an answer, the court will schedule the matter for trial within about 30 days from the date the defendant files an answer. On the day of the trial, the judge will ask the parties if they are interested in mediation. Most magistrate courts have mediators on staff who will meet with the parties and attempt to get them to settle the claim. Mediators cannot make decisions about the case but will attempt to get the parties to agree on a settlement. If the parties cannot settle the case with the mediator or do not try to mediate the case, a magistrate judge will hear the case and make a decision. If either party is dissatisfied with the judge’s decision, they may appeal the case to the State or Superior Court within 30 days.


Of course, the benefit of magistrates’ court is that it is a fairly quick process. It does have its limitations, however. First, you cannot recover more than $15,000.00 in magistrates’ court. Consequently, if a party is seeking more than $15,000.00 in damages, magistrates’ court is not an option. Second, another disadvantage in certain cases is that there is virtually no discovery allowed in magistrates’ court. Discovery, as discussed below, is the process by which the one party is required to provide the opposing party with detailed information about their case. This discovery process is helpful because it keeps a party from being “ambushed” at trial by surprise evidence. Finally, if you do win in magistrate court, realize the other side may file an appeal. This starts the case all over again in state or superior court and may leave you feeling as if you "wasted" your time in magistrate court.

Filing a lawsuit in state, superior and federal court

If your claim has been filed in state, superior or federal court, the initial process is similar to that used in magistrates’ court. Once a lawsuit is filed, a copy of the complaint is delivered to the defendant by the sheriff or a marshall. In some cases, primarily in Federal Court or with an out of state defendant, an “acknowledgment process” is used. A party may have up to 60 days to file an answer if the acknowledgment process is used. The acknowledgment process is where a copy of the complaint is simply mailed to the defendant. The defendant is then required to acknowledge or admit receipt of the complaint rather than having a copy of the complaint delivered to them by a sheriff or Marshall. This acknowledgment process is meant to save the resources of the sheriff’s department and also has the additional benefit of saving the parties the cost of the sheriff’s delivery fee. In either event, a party has 30 days from delivery of the complaint (the delivery date by the sheriff or the acknowledgment date) in which to file an answer to the lawsuit. If the party does not file an answer, they will be in “default.” If they do not cure their default by filing their answer within 15 days after the default date and paying the plaintiff’s court costs (filing and service fees), the plaintiff will automatically be entitled to judgment.

What happens after the defendant files an answer?

If the defendant does file an answer, the discovery period begins on the date that the defendant files its answer. The discovery period generally lasts anywhere from four months in federal court to six months in state and superior courts. It is during this discovery process that the parties will send each other various discovery documents, i.e., documents intended to “discover” and establish facts underlying the lawsuit. There are three (3) primary types of discovery documents. The first type of discovery document is what is known as “interrogatories.” Interrogatories are simply written questions that one party sends to the opposing party. Typical questions a party might ask could be “Provide the name of each individual who has knowledge of the facts concerning the formation of the contract” or “Provide a list of all the customers you lost because of defendant’s alleged breach of contract.” Interrogatories are generally meant to identify and limit the “universe” of witnesses and documents that will be used in the litigation. The party receiving the interrogatories must swear or affirm that the answers given are true and furnish those written answers to the opposing party within thirty (30) days of receiving them.

The second type of discovery document is a request for production of documents. This request is simply a document that asks for the opposing party to provide a list of certain specific documents or categories of documents. For example, in a breach of contract action for a past due account, the defendant might dispute the amount owed. If this occurred, the defendant might ask the plaintiff to produce (or send them) copies of all invoices that are allegedly owed to plaintiff. Plaintiff, in turn, might ask defendant for a copy of all checks that defendant allegedly paid to plaintiff.


The third type of discovery document is known as a request for admission. This document, as the name implies, simply asks the opposing party to admit or deny certain facts. For example, the plaintiff in a breach of contract action might ask the defendant to admit that he or she signed a contract or that the defendant received certain products and has not paid for them.

A final common tool in the discovery process is the deposition. Depositions involve witnesses giving testimony under oath before a court reporter, usually in the conference room of one of the attorneys. The testimony is then converted into a written transcript which has many potential uses. The deposition process is expensive (in terms of attorneys’ fees and court reporter expenses) but it can be a very valuable tool and is used, among other things, to “pin down” a party’s testimony before appearing in court.

As seen from the summary above, the discovery process is very valuable. It is valuable because during this process each party shows his or her “hand” to the other party. By the end of discovery, all relevant documents should be exchanged between the parties and each party should know the identity of the opposing party’s witnesses and what those witnesses will say at trial. Cases are often won or lost in discovery as a result of parties realizing that certain key facts may or may not be provable. Many cases obviously settle during or at the end of the discovery process when “all the cards are on the table.”

It is during this discovery process that many individuals feel that litigation “lags” or that nothing is happening. In some cases this is true. Other times, however, action is occurring but it is occurring “behind the scenes.” In addition, there can be a significant advantage to this “lag” or delay. Specifically, during the delay the parties can “cool off” and when this occurs hopefully logic and reason return to help solve and ultimately settle the dispute.

What happens after the discovery phase of litigation?

At the end of the discovery process, one or both of the parties may file a “motion for summary judgment.” This is one party showing the court that the other side cannot prove certain facts needed to win or defend his or her claim. This is a critical motion and if the court grants summary judgment for plaintiff or defendant, the case is at an end. The expense of a trial is not needed. Of course, if summary judgment is granted, the losing party may generally appeal the decision to the appropriate appellate court.

How does my case get decided by a judge or jury?


If the court does not grant summary judgment to either party, the case is placed on a trial calendar. The trial calendar contains a list of cases which are ready for trial. There may be as many as fifty (50) cases on a trial calendar. The cases are generally taken in order, with the oldest case taken first, followed by more recently filed cases. The courts generally conduct trials during one or two weeks of every month. Since the court’s time for trials is limited during any given month (they are handling other matters such as motions for summary judgment during the remainder of the month) and since the court has many cases that require trial, your case may appear on several trial calendars until your case becomes first for trial. This process may take anywhere from one (1) to twelve (12) months after discovery has concluded, depending on the trial court’s workload.

When a case is finally tried, a judge or jury will decide who is right and what damages, if any, the prevailing party deserves. Of course, a party may appeal if they lose. If a plaintiff wins and the defendant appeals, the plaintiff generally will not be able to collect any monies owed the plaintiff until the appeal has been resolved. As one might imagine, however, appeals are expensive and even at this late date the parties may elect to settle. In such a case, the defendant will waive his or her right to an appeal and will generally pay the plaintiff a sum lower than what the judge or jury awarded. The benefit to the plaintiff would be receiving prompt payment of some amount from the defendant without the risk of losing on appeal.

Who pays my attorney’s fees?

At the end of the litigation process, the plaintiff or defendant may have incurred a significant amount of attorneys’ fees. For plaintiffs in some types of cases, attorneys may handle cases on a contingency fee basis. In these types of cases, the plaintiff does not have to worry about his or her attorneys’ fees since they will be collected out of the money recovered from the defendant or, if the case is unsuccessful, will not be owed (litigation expenses, however, such as filing fees and deposition costs, may still be owed). In all other cases, the general rule is that each party must pay their own attorneys’ fees. While some statutes allow a winning party to recover their attorneys’ fees under certain circumstances, it is not the general rule and each party should plan on having to pay all of their own attorneys’ fees. As one might imagine, this is a significant reason to settle many cases, especially if the financial loss sued for is slight or if the prospects for winning are not great.

If I win, when do I get my money?

If a plaintiff sues a defendant and receives a judgment for a certain amount, the plaintiff must then actually collect the money from the defendant. This is not always an easy process. If the defendant is an individual, he or she may not have the money to pay the plaintiff or may file bankruptcy. In most cases, the court cannot force the defendant to pay the plaintiff. Such a defendant may be “judgment proof” and filing a lawsuit against someone in such a situation is rarely recommended. If the plaintiff has sued another large business entity or a government entity, the chances of collection are usually quite good since the business or the government entity will usually have the insurance proceeds, cash or assets to pay the judgment.

Conclusion

The above summary is just that, a summary of the litigation process. It is not meant to provide legal advice or to encourage or discourage litigation, it’s purpose is simply to provide you with an overview of the process and events which commonly occur in many cases. Again, remember that most cases settle early on in the litigation process. In the final analysis, this is usually the best outcome for both parties.