What type of damages or victories can you recover from a lawsuit?

November 9th, 2022, 12:00 PM

It's always a challenge to have to bring a client down to manage their expectations when it comes to lawsuits because what people believe they should be allowed to sue for and recover in a lawsuit doesn't match up with the way the law actually works, unfortunately.

I'm going to tell you a little bit about what type of damages you can recover or what type of victory you can claim in a lawsuit. I'm talking about Pennsylvania, and it may be different in other states. I don't know; I'm not licensed there. But in Pennsylvania, generally speaking, when it comes to business disputes, meaning disputes between partners, disputes between two businesses, a vendor, and sometimes an employee, a contractor, things like that.


A customer who owes you money, you're going to file a lawsuit, typically, in the Court of Common Pleas if there's enough money at stake, gotta be over 12,000, I think 12 or 14 to get out of small claims court. So you're going to sue for monetary damages. 

A lot of people think lawsuits are quick and easy. It's just a matter of filing some paperwork, getting in front of a judge and or a jury, and getting your verdict. The reality is lawsuits take years for it to take less than a year is pretty surprising. I don't have any statistics to back that up other than just what I've seen from every lawsuit and every thought ever filed. So warning, number one is keep in mind that somewhere between 97 and 99% of lawsuits, lawsuits get settled before they get to a jury. They may get settled before a lawsuit is filed, they may get settled shortly after they may get settled after years of litigation and messing around in the court system. But most cases get settled. 

And when a case gets settled, typically, that means both sides have made some sort of compromise; maybe the defendant has been willing to pay more than they think they owe. Maybe a plaintiff has been willing to accept less than they think that they're owed. But that's the reality of most lawsuits. The skill of a litigator is often in negotiating and posturing. And not necessarily in putting on a show. In a courtroom.

A lot of people also think they can sue to recover their attorneys fees. So if they have to pay a lawyer to file a lawsuit and go to court, they think that those fees are recovered. In most cases, they're not, though, and that's one of the most disappointing things to a lot of clients.

I can be heartless about it and say, Listen, hiring a lawyer is the cost of doing business. You have to have some budget for either transactional work, to set up your business or preventative work to avoid lawsuits, or to actually get involved in litigation. And unfortunately, in most instances, you've got to pay for your own lawyer. Now, there are exceptions to that with certain types of lawsuits, which is way too much detail for this video. And there could be you could have insurance coverage; sometimes your insurance company will actually provide a defense for you. Sometimes you get to pick your lawyer, and sometimes you don't. But you may not have to go out of pocket as much to hire a lawyer to defend you.

So that's a big one, right? Because attorneys fees and lawsuits can be $10, $20, $50, $100 grand depending on the complexity of the case, or more, obviously. And if you look at some of the famous lawsuits that you see in the news, one of the recent ones was Johnny Depp and Amber Heard. That case went on for like three or four years before it ever saw a jury. I mean, those lawyers, you think about how long that trial lasted, how many witnesses they called each and every one of those witnesses had to be prepared, they probably had a deposition taken at some point in time, meaning they already testified under oath in front of a court reporter. So there's significant costs that can go into a trial like that, like any trial, any lawsuit. 

So I think a lot of people get disappointed about that. I think a lot of people also or a lot of clients also hear about these really big jury verdicts or these big settlements, especially when it comes to car accident cases, which is not the type of law that we do. And they hear things like punitive damages, meaning one company is going or one party is going to be punished for their actions. So there's compensatory damages, meaning you get paid back what you think you've lost or a portion of that. And then there's punitive damages, and that's to punish, and that's to send a message to other potential defendants or bad actors. And I think a lot of people hear about this, and they think, wow, there's going to be a lot of money at play.

But in most business disputes, you can't get punitive damages. Most business disputes are what are considered a breach of contract claims. So all you can sue for typically, is something like your compensatory damages or what it would take to make you whole or get your money back. So you may not be able to recover attorneys fees, you can't recover punitive damages. 

So in a lot of lawsuits, people are looking at recovering some amount less than what they're actually owed. But hopefully, some amount more than zero or the lawsuit won't cost them more than it, then it recovers for them. Although it's usually impossible to tell earlier in a case. 

So that's just some information on lawsuits. It's obviously much more complex than this. You can also see what's called specific performance, meaning I'll give you an example. If I had a contract to buy a house and then some they sold that house to someone else, or they decided not to sell it at all. I may be able to sue for my monetary damages, meaning how much money I lost by not being able to buy the house, or I may be able to force them to sell me that specific house. That's pretty rare. In other instances, in business relationships, if I've hired someone to perform services for me, and they don't do it, I probably want monetary damages. I probably don't want to hire that deadbeat. I don't want to force that deadbeat to do the work that they were obligated to do because our relationship has probably soured. 

So there's lots of options when it comes to lawsuits. You need to make sure you understand all of them because sometimes you can recover attorneys fees, sometimes you can get punitive damages. Other times there are protections that you have or steps that you need to take in order to recover the damages that you're owed. So like all of these, if you've got questions about lawsuits, reach out to us, we can answer the questions and we can walk you through your specific scenario because it's a little bit different for everybody. Every case is different. It's very difficult to compare what's happening in your lawsuit with what's happened in other lawsuits. But lawyers with experience and research capabilities can try to draw the analogies or make the distinctions between different types of losses. 

Please reach out if you have any questions!

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