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How to Survive a Lawsuit, Part III: Are You Ready to RUUUMMMBBBLLLE???!!!
Parts I and II of this series dealt with the dos and don’ts in the event you are sued. Now, however, and due to popular demand (10 cents was desperate), some thoughts on how to avoid a lawsuit. I’ll begin by saying that the first trick to avoiding a lawsuit is to be a lucky, lucky son of a gun. If you’ve made it this far in life without getting sucked into the dark spaces of the litigation system, you are thrice blessed because you’ve probably done at least three things in your life that, were the planets otherwise aligned, would have landed you in court. If, for example, you’ve ever driven drunk, only a special sort of grace prevented the police from spotting you, and only your guardian angel guarded you against running into someone. Believe me. If you keep it up you might as well paint a bullseye on your car bumper. And you’ll deserve it.
As for business owners, if you’ve been around for more than 10 years and never found yourself on the business end of a civil complaint, you are living under the blessing. This is doubly true if you have employees, and triply true if your business involves contracts (as most do). Whatever you’re doing, keep it up.
Vigilance is the price of peace, but a guard walking the prison walls can never let his (sorry for the obvious pun) guard down. Nor can you, if you operate a business, own real estate, or drive a car. The key to preventing a lawsuit is to be prepared. Plaintiffs’ lawyers will often run from defendants who have their act together. Most plaintiffs’ lawyers operate on contingency fees. In order to profit from such cases, contingency lawyers seek to spend minimum effort to obtain the maximum return. For example, a car wreck guy will take in dozens of low value whiplash cases, but to truly profit he must settle those cases quickly. If he gets bogged down in a case, and must spend disproportionate amounts of time on it, he’ll have less time to spend on other work. If a contingency fee lawyer puts in $50,000 worth of time for a $15,000 dollar reward, he has been creamed and he may have to pass on the new Ferrari.
Business cases are somewhat different, because the lawyers involved are usually all billing by the hour. But when a lawyer bills $100, 000 for a $50,000 outcome, he will face a very irate client.
Lawsuits can get out of control for many reasons, but as a general rule, if the evidence from one side or another is organized, highly probative, and verifiable, cases end quickly, and often are never even filed. Be ready to fire back with a full metal jacket.
How, then, to prepare, and, one hopes, avoid, the death knell of litigation?
FOR BUSINESSMEN (and women, but I don’t do inclusive language)
Read the Blooming Contract: This may seem obvious, but every commercial litigation lawyer will tell you that this advice is too often honored in the breach (did you appreciate that pun?) Contracts, even when simple, are very difficult for laymen to read and understand. That’s not a sign of laziness or a dull mind, but rather because the people (lawyers, if they are people) who write them are lazy and dull. When you hire a lawyer to draft a contract, you probably assume that he’ll make it from scratch. But no. Lawyers rely on form books, publications that are full of suggested language (sometimes suggestive, but that’s another post) gathered together in one book so that the lawyer can put find acceptable terms that have already undergone the crucible of an in-court test. Most contracts are derived from standard terms used in most all such instruments. This is commonly referred to boilerplate. That’s where they get you. When contract specific language is finalized, it will set out the terms directly involved in the deal. That language is subject to negotiation. But lawyers rarely fight over boilerplate — until the lawsuit comes. Then the boilerplate can hogtie a good case. So read it — every boring, repetitive, excruciatingly arcane word. If you do not understand even the smallest bit get a lawyer to review that contract.
Keep up on current events: Evidence is everything in a lawsuit. Opinions, personal feelings, outrage, are all but useless in building a case. In fact, most of that stuff is irrelevant and therefore inadmissible. What you need is evidence.
Among the most potent forms of evidence is the contemporaneous record. In other words, keep a record of everything you hear, say, or do in any situation that so much as sniffs of possible legal entanglement. If an employee whines about a co-worker, make a note of the exact complaint and file it away. Make sure you include the date and time so that when an issue arises you are not just relying on recall, but can pull out the note and hand it to your attorney. Believe me, if your lawyer has such records to provide to a potential opponent, he can sink many a plaintiff’s ships. Juries are highly kindly-disposed to parties who’ve shown sufficient concern by keeping track of possible trouble.
Drink Your Insure Everyday: Okay, that’s a cheap rip off of a popular commercial, but I like it because it reminds me to tell you to get insurance. This is obvious for car owners (although the number of drivers without insurance is astounding, and failure to carry liability insurance is morally contemptible). Businessmen should try to insure against every possible risk. In the early days of my career, employment lawsuits were gaining in popularity. Defense lawyers routinely turned these cases over to insurers. But many insurance companies fought tooth and nail to avoid having to cover such matters. Case law on employment insurance coverage became a special literature of its own. Over the years, insurance companies began to offer specific coverage for employment matters. It was pricey, but employment cases can rack up hundreds of thousands of dollars in fees and costs. If you have employees, get coverage if you can possibly afford it. Insurance in employment cases can be the difference between survival and insolvency.
I’ll Be Your friend But Not Your Buddy: I worked as a disc jockey as a young and carefree youth. I assure you I was a star (of the falling kind). Anyway, one of my employers, upon hiring me, told me he’d be my friend but not my buddy. I’ve never forgotten that, and have told client after client to heed his advice. Do not buddy up to your employees. If you do you are weaving your own noose.
Some of this is obvious. When the boss gets a bit too chummy with an employee of the opposite sex, very bad things can happen. Even if the lady’s husband misses when he takes a shot at you, be assured that the object of your affections will display superior marksmanship skills when she sues you for sexual harassment.
And don’t deceive yourself that all will be well if you avoid mistaking the boudoir for the boardroom. Friendly banter over a couple of beers may reveal things you do not want to know, and effectively bind you up if an employee decides to haul you into court. I once had a case where my client had been out boozing it up with his employees and learned that one of them had a son with a colorful criminal record. Shortly thereafter my client fired the employee for poor performance — the guy was utterly useless. He nonetheless threatened to sue my client by claiming he’d been fired because his kid was a rotter. I had ample evidence of the nitwit’s uselessness (see above on keeping records), so when the cretin’s lawyer called it was easy to shut the thing down. But my client would never have been in the crosshairs if he’d gone home instead of to the bar.
Get to know your employees, that is meet their spouses, learn some things about their kids, and that sort of thing. But do not be their buddies.
For Property Owners:
Let’s face it. If you own anything of value, you are begging to be sued. You could sell it all off, give it to the poor (“Have mercy on me Lord,”) and retreat to a monastery, but most of us are not built for so austere a life. Instead, we work for things; we want things; “Oh if I only had your things.” (Do you hear me Mr. Long?)
And there’s the rub. Too many people are obsessed with their neighbor’s stuff and, if they get the chance, they’ll try to take it for themselves. I’d like to defend trial lawyers — I was one, after all — but America is boomtown for litigation. The reason is simple: money, money, money (okay that’s three things). I didn’t completely understand this when I first entered practice. Law School professors love the theory of the law, but are often squeamish about the simple reality that money is the deciding factor in almost all lawsuits. My Torts professor loved to talk about duty, breach, and causation, but when it came to damages he’d crinkle up his noise because — “Yikes, money!” But a couple of weeks in I had an epiphany — money is just about all that matters. If you own something, someone else wants it, and there are thousands and thousands of lawyers (okay, nearly all of us), who long to siphon off their extravagant portion.
So you may be thinking, “Gee, thanks Mikie Boy, now I’ll never sleep peacefully again.” Well, it’s not quite that bad. If you are aware of your surroundings — battle ready, as it were — you can limit your exposure.
More ideas for property owners:
Don’t Guess Who’s Coming to Dinner: Personal injury cases involving accidents on private property are a minefield. Property law in general is complicated, what with all the old common language of fee simple, future interests, tenancy in common, joint tenancy, ugh. But when someone trips over your rake, you have entered the incomprehensible realm of “Who, exactly, is that guy?”
I’m not going to bore you with the legal flubdubbery, but the best way is to figure that no one who comes to visit is a completely trustworthy friend. Shortly after I joined my first firm, the senior partner handed me case in which the plaintiff in a slip-and-fall was suing her church. A Catholic Church! The boss insisted that I take the case forward. He seemed utterly unconcerned for my eternal salvation (“Bless me Father, boy have I sinned.”) The lesson? Keep your property as safe as you can — for everyone. Do not assume that trespassers have no claims against you. I don’t want to suggest that you be nutty about it … but please be nutty about it. If your kid leaves his bike lying on the sidewalk, tell him to pick it up immediately, then send him to bed without dinner. If you get sued, and if your homeowners insurance doesn’t cover all your risk, the kid may never eat again.
Love Your Neighbor – But Never Trust Him: I’m building a staircase to hell with all these scriptural metaphors, but there is much practical wisdom in reading between the Lord’s lines.
The tiniest offenses can set off a Hatfield’s and McCoy’s feud between otherwise friendly neighbors. Lawyers are famous for telling war stories, and I’m probably overdoing it, but experience is the source of practical wisdom (and I am a wise guy). Normal, nonlawyer, and hence reasonable people look at trees as a gift from God, and a reminder of the beauty of creation. No sane person thinks trees will rise up and conquer the world. Sane persons.
One sunny and otherwise pleasant afternoon I got a call from an old country lawyer whose client was a wee bit upset because one of my clients had threatened to shoot him. “Why Mike,” you ask, “what kind of clients did you have?” Well, most were reasonably normal, but some hid their craziness behind a calm façade. As it turns out, my client was upset because his neighbor had cut down some trees on my guy’s property. My client was so angry that he sat on one of the felled trees, shotgun at the ready, with the intent of pointing it at the perceived tree thief. Except, as it turned out, my clients fence encroached about 50 yards onto the other guy’s property. My client was armed and ready to shoot the guy for harvesting his own trees. Worse, the total value of the trees was about 200 bucks.
People lose perspective when it comes to property. What that means is that if your neighbor wants to raise a ruckus he’ll find a way to do so. Protect thyself! In this case I offer the contrary of the advice I gave about employee relationships. Be your neighbors buddy — drink beer with him every chance you get—just don’t delude yourself into thinking he will always be your friend.
Won’t Someone Think of the Children: There won’t be any attempts at humor here. If there are children in your neighborhood you have a clear legal obligation to protect them from what the law calls attractive nuisances. This is more than a legal duty. It is a moral imperative.
An attractive nuisance arises when there is something on your property that is almost certain to draw attention — especially from children. A swimming pool, a trampoline, or a tree house are examples of attractive nuisances. If you have one of these make sure to protect against unwanted visits from the neighbor kids. It will make little difference what you have as a defense if a child is injured or killed in your pool.
But of paramount importance, please remember that there is nothing so tragic as the death or disfigurement of a child.
I hope these posts have been of some help. Our buddy Dime is to be thanked for inviting us to participate, even though no one should ever be his buddy.
Tomorrow, as an act of mercy, I’ll put up my final post about surviving a lawsuit. Meanwhile, sleep well … sleep well …
Published in Domestic Policy, General, Law
Mike,
Great post!! Good things to remember before the problem.
You guessed it. I will remind you to put a “,” after “Group Writing”. No comma makes all the words one long tag.
Okay, I think I fixed it.
Thanks.
My little brother had followed your advice about keeping a record for bad employees. If he fires them they don’t come back.
I liked the way you handled these serious subjects. A few wise choices will cover a world of hurt. There are bad actors who look for weaknesses and know the law. We have to outsmart them.
Oye… And a reminder that civil law is no better than criminal law!
Worse in many ways. Often enormously more expensive–especially discovery.
Any thoughts on how the US addiction to litigation can be broken? You can run a substantial business for decades in other parts of the world and never face a civil suit (except from an employee, and that will be in a specialised tribunal). If the regulatory state is a multi-trillion dollar drag on economic performance, what must the de facto lawyer tax be costing?
Mike I need you to become my attorney to sue the property management company of the apt complex I live in. It will also involve suing the government, and a couple of the management team personally. If you are successful, both our families may retire to a lovely island someday. Deal?
I have advised colleagues and proteges to always, if your jurisdiction allows it, record conversations when you are alone in a room with someone (i.e. when there are no witnesses). Anyone. Friend or foe.
The smartphone revolution makes this very easy. No longer must one carry a microrecorder, since every smartphone has a “voice notes” app. File the recordings away on an encrypted thumbdrive not connected to the Internet. One can never, ever know when corroborating evidence of a manager’s exact instructions or a subordinate’s acknowledgement of a message received will be useful.
It would be better to never be alone in a room with anybody, but that’s simply not feasible.
First, I want to know which editor picked that picture. As a personal injury attorney I find it objectionable – so objectionable I might be moved to action, but I’m a little busy right now counting stacks of money.
But seriously, let me address this paragraph:
Mike,
I’ve enjoyed your series and agree with a great deal of it. You are obviously one heck of a business transactional and litigation attorney.
But please take my word for it on this – your description of personal injury work is 180 degrees from how we operate. My firm is 18 lawyers who are a boutique – we do nothing but personal injury, from construction accidents, to products liability, to medical malpractice, to premises cases, to worker’s compensation and, yes, automobile negligence cases. You won’t find one of us in divorce court one day, criminal court the next, etc. We concentrate on serving the injured.
“Minimum effort to obtain the maximum return.” That’s just not how it works. Minimum effort will get you malpractice and ethics complaints. The reason I average 55-60 hours per week at work is I put in the time on every case. You can’t look at a smaller valued case as being unimportant. It’s not to the client. The only way to maximize the value of any case is spend money and time on the preparation. Insurance companies will give bigger settlements to the prepared guys, not the unprepared. The really big ones will average out the hours you spend on the really small ones, but NEVER short change the smaller ones in an effort to save money. You’ll lose money. Plus that makes for a better system – if the larger value cases didn’t help pay me for work done on the smaller ones, there would be a whole group of people – those with smaller cases- that could never get a lawyer.
“For example, a car wreck guy will take in dozens of low value whiplash cases, but to truly profit he must settle those cases quickly.” Settle quickly??? What the hell is that? This isn’t a contract case, my friend. The facts on a personal injury case aren’t clear when the client comes in the door. There is no such thing as settling quickly.
The reason for that is orthopedic injuries have a tendency to deteriorate into a worse condition with the passing of time. If you believe your client has “whiplash” as you put it (that’s not an injury, but a mechanism of injury – you probably mean just a sprain) and you “settle quickly” for short money in a month, what are you going to do when a year later, your client shows up and says, “I got worse, got a series of injections, ended up with a fusion surgery and lost my job?” You’re going to call your malpractice carrier, that’s what you are going to do, because you messed up that poor soul’s life for short money.
On my injury cases I tell the client up front I won’t even file suit for 8-10 months to let the injuries season and investigate the liability end to make sure we have a good reason to give someone the “bad day” you are talking about, and to make sure we identify the responsible people.
I know it’s easy to go to the stereotype on injury lawyers as “ambulance chasers” (which is illegal itself) and as doing unimportant work. Well, trust me, there’s a lot more “vocation” than job to this.
When a little girl is brain damaged and bedridden due to a drunken driver who got loaded on a dozen drinks because his bartender didn’t have the sense to cut him off and let him drive away, the issue is how will her family pay for the constant care she will need for years to come. When I can solve that problem for them – I can’t think of a more important business case than that.
Sorry if that ended a little preachy, but I do this for a living and take seriously helping people who are injured.
Tommy:
I am so glad you posted this rejoinder. I was hoping somebody would because I was “Trmp-eting” to the base a bit. I know many plaintiff’s lawyers and you’re obviously one of them–deeply concerned about their clients’ welfare. I haven’t done PI work in many years, and did mostly defense. I dealt with many pliatiffs’ attorneys who did do a bulk business, hiring a substantial staff of paralegals to process low value cases for purposes of quick settlement. I’m not so much criticizing them, as explaining their business model. I remember one guy who had a standard letter of about 15 pages filled with threats of millions in damages, but who quickly settle for a few thousand. He did a land house business. In my experience there are a lot of such lawyers. As you know, insurance companies very often seek early settlements, and these lawyers take advantage of that willingness.
A good, conscientious plaintiffs’ lawyer is worth his price in gold. There are plaintiffs who’ve suffered horrific in juries and who need high damages to get on with their lives. I applaude those lawyers.
I should also have pointed out that many, many defense lawyers also profit hugely from the present system. Discovery has been a boon for defense firms. I would even speculate that discovery has built many large litigation firms. I haven’t practiced in six years so don’t know what reforms have been made, but I know the Federal Courts were in the process of streamlining the system. I hope this have continued to improve.
Thanks again. If you are so inclined, I would invite you to write an OP on the subject. I think it could spark an interesting and fruitful debate. My final post on this subject is due tomorrow. Among the topics will be tort reform. I’d really appreciate your input.
BTW: I didn’t find the picture, although I did find it amusing. Microaggression I guess. I might have gone with this(-:
I hear you Mike about the personal injury “mills” as they were. But here in the Garden State the lawsuit threshold has driven most of them out of business. You can’t take on hundreds of cases anymore – the litigation is too expensive for small payoffs. And the insurance companies will offer nothing on lawsuit threshold cases until the eve of trial, and about 92% of drivers are subject to the threshold.
Those types of mills were still around when I started but they are gone now.
Of course it has resulted in a “Walmart-ization” of the law practice around here. You can’t do personal injury some of the time and you can’t be a small practice either – the outlay on these cases is just too expensive. So it really does take a firm with some numbers and a wallet to front the expenses to do this kind of business.
Your right about the “Walmartization.” I hate it. But law is a business, and volume is everything. Large firms can handle the big claims, but a lot of lawyers, especially new lawyers, open firms because they cannot find work anywhere else. As you know, these lawyers are often ill prepared for major PI cases, and often mess things up.
I sent you a PM on the subject, if you’re interested.
I’m glad you told me you PM’d me. I never look at that thing and I miss some. Ricochet needs some sort of tickler when you get a PM.
Mike,
Reading posts I-III just confirms for me every single lawyer joke out there is not only funny, but just a good start.
I am starting to think we should go back to the old Anglo-Saxon blood money system. So much money for an arm, twice that for a leg, an eye is worth an arm unless it is the only eye remaining…
Hundreds of thousands of dollars to defend a single business lawsuit would bankrupt nearly any small business even if they won. Just might as well declare bankruptcy immediately and blow all your assets on a really kick-ass vacation before the lawyers get it all.
What plaintiffs don’t understand is the harm they do to our economic system.
I’ve worked both sides. I did the first 8 years of my career on the defense side, then I switched to Plaintiff’s work and have done that for 16 years.
I can attest that there are far more “frivolous defenses” that tax the system than frivolous lawsuits.
They just aren’t as widely published.
Thanks for 3 great posts!