Don't sue the bastards

Life is not like television shows

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I have been in court three times. Once with my high school civics class, once when I was in law school as part of a class in criminal law, and once because of a conflict with a customer that had gotten out of hand. That last court visit was by far the most stressful...

Here is what happened: As you may or may not recall from earlier articles, back in the 1990s, when I struck out as an independent consultant, my first customer (an agency) went bankrupt. That was stressful but there was nothing I could do because there was no money to go around on either side of that affair. My second customer was an upstanding company that paid their bills on time. My third customer, another small agency, was unfortunately not as timely. As an independent consultant you often work through agencies that connect you to customers and that take a cut of the hourly rates. Things might have changed, but when I was consulting, some agencies were decent, but most agencies were sleaze bags that took a large cut, did little work, and took no risk. Through one of these small agencies I had landed teaching gigs at Global Knowledge Network (GKN), an IT training company that had spun off from Digital (and that has since been acquired by a private equity firm). 

After a few courses and a few unpaid invoices, I was getting worried and annoyed. The work had been done and I was pretty certain that GKN had been invoiced by the agency and had paid those invoices. Why had my invoices not been paid yet? I got so annoyed that I went to my counterpart at GKN and told him I would not show up for the course next week because the agency had not been paying me and I couldn't afford working for free. Specifically, I didn't want to add to the size of the outstanding amount of money that they owed me.

GKN’s general manager (remember: my customer's customer) was understanding but also somewhat upset, because it was hard enough to find good teachers for these courses and at this late hour it was almost impossible. Canceling is of course always an option but not a great one as the course schedules were often tied to the delivery of hardware and the newly baked system administrators needed some Digital Unix foo to get going.

One of the fun aspects of teaching at GKN (remember: Formerly a department of Digital Equipment Corporation) was that a fair amount of the course attendants were VAX VMS administrators that needed to retrain on Digital Unix. If you know anything about VAX VMS, you might know that, much like Linux, it's a cult and that everything in VMS is better. All of these forced converts were upset all of the time that they had stooped so low as having to work with Unix. One of them told me this fantastic story about his cleaning lady, Mrs. VMS. I'll save the story for a LinkedIn post with a reference to this article in a heartless attempt to drive engagement and new subscribers :-)

The GKN manager thought for a bit and proposed that I could do business with them directly, cutting the agency out of the loop. He'd even pay me the same rate as the agency, which represented a 25% rate increase for me. My contract with the agency explicitly forbade me from dealing directly with their customer, but I reasoned they were in arrears so the contract was void.

Legal advice: This is not true, or at least there is much more to it. Don’t try this at home!

At the same time I had contacted an attorney to collect on the outstanding invoices. The attorney put a lien on the bank accounts of the agency. The process for that in the Netherlands is that you go to court with some credible evidence that there is an outstanding debt that has come due. If you can convince the judge about this, she will then write a court order, authorizing this specific lien. You then take that court order to the bank and presto! Please note that the debtor (person or company) is not included in these proceedings! The rationale for this is that any foreknowledge of the lien would give them advance warning and they could use that to clear out their bank accounts and hide the money under their mattresses.

The lien got approved and the agency had a rude awakening. They countered by suing for relief, asking the court to cancel the lien. It was at that point that I found myself in court, facing a stern judge who clearly thought we were a pair of muppets who were wasting his time.

A decade later, partially inspired by these events, I thought that a career change was maybe called for and I got myself a law degree. The career change never happened, but I do use my law degree to help friends and family with small-scale legal problems.

On top of that, I am currently pursuing a second law degree specializing in privacy and data protection, so call me for all your GDPR and privacy related legal  problems because, believe me, I am one of the few lawyers out there who really knows what a cloud, a cookie or an IP address actually is.

After hearing about someone's legal problems, one of the questions I often get is: "Can I sue them?" The question to this is always "Yes". Both in the US and in the Netherlands you can sue anyone for anything. However, my advice is pretty much always not to sue the bastards...

Suing someone is super easy. It basically only requires you to write a letter to the court alleging that someone did you wrong and could the judge please grant some relief in the form of money or an instruction to do something or stop doing something, In most jurisdictions you need legal representation to sue in civil court, but there is by now an abundance of lawyers and if you are willing to pay their fees, they'll do whatever you want, even petition the court for relief on a bogus claim that has no basis in reality or established law. In principle courts can reprimand attorneys for filing frivolous lawsuits, but that happens so infrequently that when it does, it makes the news.

So if suing is so easy, then why not sue, especially if you have “clearly” been wronged?

Let's start with the most obvious reason: Suing can get really expensive really fast. Attorneys are expensive and they are under a huge amount of pressure to rack up billable hours and to make sure that literally everything they do gets billed. If they think about your case while knitting a brown sweater on the executive palatial john in their expensive downtown office, you can bet they will charge you for it. They also have no incentive to keep costs low for you. In theory, if your case is hopeless, they should tell you, but I rarely see that happen.

One of our family friends who was dumb enough to sue the Dutch IRS on a sketchy case was goaded by his attorney to sue all the way to the European Union court in Luxemburg. By this time we are talking many tens of thousands of euros in attorney's fees.

A cool and rational cost/benefit analysis typically suggests a deal, but people get so caught up in their righteousness that they will continue the case for the sake of principle.

Another reason that cases get expensive is that the moment you sue, you lose control of the case. The defendant not seldom countersues with claims of their own, which you then need to respond to. In jurisdictions like the US where there are ample opportunities for motions, claims, counterclaims, amended claims and whatnot, you can easily spend years paying attorneys to write and respond to legal briefs while your case is winding through the courts.

By the way, even if you win, you rarely get your attorney costs compensated by the losing party. Typically, each party pays for their own attorney's fees. When this does not happen, it makes the news.

Some types of cases explicitly “guarantee” full payment of the attorney fees of the party that prevails, but again, that is rare.

While the case is being adjudicated, it takes over your life. Suing or being sued is hugely stressful and all-consuming. Apart from the financial aspects of it, the importance of winning is enormous and the impact of losing on your self esteem is equally enormous. An aggravating factor there is that you rarely hear more lies than in a court of law, and it can be very stressful to hear the other party dig up all your dirt and lie through their teeth about your morals and character. 

Years ago, I helped a friend with her divorce case and one of the issues at hand was custody of their son. One day, before court, I prepped her and said: "Listen, be prepared, you are going to hear terrible things about yourself; that you are a bad mother, that your child hates you, and that this is widely known in the neighborhood and in your kid’s school". She looked at me all funny and it was clear that she didn't believe me. However, when I called her that evening she had to admit that it all played out exactly as I had predicted. Even if it is all obviously ridiculous, even if the judge doesn't believe it (they rarely do, and if they do, it rarely matters), it is still hurtful and therefore, stressful.

The aforementioned customer who sued me to get the lien removed from their bank account also argued that I was a terrible hack and that I had a very bad reputation in the industry.

Another process that helps making suing (and being sued) a very lonely affair is that, over time, as the case drags on, your friends and family typically lose interest and don't want to hear about it anymore. In egregious cases where you were obviously very badly treated by someone, you might be able to keep a good support network going. But in the typical case that is more about shades of gray than about black and white, you will find that not everybody will support you as much as you think they should. They might even privately disagree with your position! Things can get very lonely very quickly as people start getting a bit fed up hearing about this thing that consumes your life (but not theirs). On top of that, depending on the jurisdiction, your attorney might actually have told you not to talk about the case with anyone lest you publicly contradict yourself which then gives ammunition to your opponent.

To make that worse, when you sue a large organization, that stress is not replicated on the other side of the case. When I got sued over the lien, I was pretty certain that the other side lost about as many nights of sleep over this as I did, which is at least somewhat satisfying. But if you sue your former big tech employer for your unfair dismissal, your opponent is a group of career lawyers and you are just an agenda item in their weekly meeting and perhaps an OKR for a junior team member. They will not lose any sleep over dealing with you as they dispassionately plough through the case and maybe transfer it to the intern with a note that this is a nice simple case to look into over the summer (no hurry).

In some cases this impedance mismatch might work to your advantage as the other side might figure out that it is cheaper for them to settle than it is to keep running the case. However, this doesn't happen half as often as you think it should and the reason for that is that you and a big opponent have a completely different strategic position.

First of all, if you are an individual and the other side is a company, they probably have way deeper pockets than you do and they often think they can just run out the clock (meaning: your savings account), which is  probably cheaper for them and sends a warning to anyone else who thinks of suing them.

The other difference is that for you, this case is your one case and the only thing that matters to you is this particular outcome. For the other side, this case is usually a part of a portfolio of more or less similar cases and they are interested in optimizing the aggregate outcome of the entire portfolio. Using the terminology of legal sociology: You are a one-shotter and they are a repeat player.

Examples of repeat  players are large employers, insurance companies, and banks. These entities might be more interested in getting a definitive judgment in a case than in settling, so that they can amend their contracts, or policies, or whatever. If you are the unlucky plaintiff that they decide to use to get the opinion of the highest courts of the land, that might mean that you'll end up having to fight them all the way to the supreme court or beyond (in Europe: The EU court in Luxemburg) in order to get a final judgment. I hope that I do not have to explain that this is going to be hugely expensive and time consuming. You might get your name on a landmark case, but believe me, that is not all that it is cracked up to be.

“Fun” fact: The Miranda of Miranda v. Arizona got his own rights read back to him the next time he got arrested. I guess by then he already knew he had the right to be silent and that everything he said could be used against him in court.

The repeat player might also decide to make your life as difficult as possible to make sure that other people in your position do not sue them.

A friend of mine moved to Australia to become the CEO of a company. Their first responsibility was to deal with some outstanding lawsuits that the company was engaged in. Coming from a civil law country, he admitted to me that it took him some time to understand what the common law actually was. A few months in he told me he had figured it out: Common law meant that if you had more money, you'd win the case.

“But what about Justice?”,I hear you think. Is the raison d'être of the court system not to make sure that everyone can get what is rightfully theirs? Isn't Lady Justice blindfolded so that she can offer justice to all, regardless of their standing in life? Should the courts not protect the weak against the strong?

Oh, sweet innocent child. Yes, this is maybe what should happen. It is what sometimes happens. But it is an ideal that is rarely realized. Life, my friends, is not like television.

Some cases are “cut and dried” and it is obvious that you have a winning position. Even then it might be expensive and time consuming to sue, but you pretty much know you are going to win because there is a clear breach of a contractual obligation, a statute, or a common law standard. Even then it sucks to sue and it is going to be very stressful, but you start from a very advantageous position. Most cases however are not like that. If you sue because you feel you got wronged but there is no clear legal standard or you have to meet a difficult burden of proof, you really might want to think twice. I don’t care if you are right, what I care about is whether you can win the case and not lose money on it. 

One thing to consider there is whether you are sure that you are in the right. You might feel that you are morally in the right, but it really needs some level-headed legal analysis to know where you actually stand. Look at the case that I started this article with. My customer was not paying me and so it is maybe not entirely unreasonable that there would come a point where I could stop delivering services. However, Dutch law provides for a process in which you have to notify your debtor that they are in arrears and you need to give them a reasonable term to comply. You might be justified in not providing services during that term, but this is subject to the exact terms of the contract and some provisions of binding law. In my anger and annoyance, I hadn't done any of that. Furthermore, I had violated the contract by negotiating and dealing with my customer's customer (GKN) directly and that was definitely wrong. So by the time we ended up in front of the judge to discuss the lifting of the lien, the judge was clear that he thought that my customer not paying me was clearly out of order, but that my behavior was also beyond the pale. This judge had clearly seen more than his fair share of idiots, because he forced us into a settlement right there and then by indicating that things would go very badly for both of us if we pursued this any further.

I had to leave some money on the table, but all in all I think I got away quite well because the settlement allowed me to continue to deal directly with the end-customer.

If nothing else, this experience taught me that by the time you call the attorneys, enough has already gone wrong to make sure that any legal procedure is going to go badly for everyone involved. 

It is for all the reasons above that most cases end in a settlement and the hallmark of a good settlement is that both parties are equally unhappy about the outcome. Really, suing rarely brings you what you expect of it. No vindication that you were right all along, no moral victory, no full compensation, no damnation of your opponent. 

Should you never sue then? Not, not never, but rarely. As part of my legal education I took a course in mediation and there I learned that there is never a rational reason to stay in a conflict. Every conflict should be approached rationally and a clear analysis should be made about the future expected value of any decision. It might be rational to sue, but more often it is not because the analysis indicates that you cannot afford to or that the chances of winning are slim.