Hardly a day goes by without one of the international lawyers at my law firm getting an email from someone who very briefly describes their situation and then asks whether they have a good case or not. 99+ percent of the time the only answer we can give is that we do not have nearly enough facts to know one way or the other.
There are so many things that go into determining whether someone has a good lawsuit or not, and many of those things go well beyond the facts that make up the elements of the potential claims. In other words, just because you could sue someone and win does not mean you have a “good case.”
I thought of all this today after reading Think of the Long Game, Part 1 — Making Sure You’re In the Right Forum at the Hague Law Blog. This post notes how lawyers too often bring international lawsuits without first figuring out two very basic things:
But two critical questions often get missed, only to be asked after filing and after hiring somebody like me to deal with the initial due process concerns (or worse, wading into the fray alone). One focused on the beginning, and the other focused on the end:
1. How do you establish jurisdiction? (The one we’re discussing here.)
2. How do you get paid? (The one we’ll discuss later.)
Just by way of example, the most common question I get relating to someone wanting to know the quality of their lawsuit is something like the following:
I just got 14,000 widgets from my factory and they are so bad as to be unusable. Do I have a good lawsuit?
Now like I said above, my usual response is a quick “I don’t know” because I don’t have nearly enough facts. But I usually add one or two specific questions and for demonstrative purposes, I set forth below a some of the things we often need to know to discern the quality of a lawsuit, and why.
1. How much did you pay for the widgets? Legally, this does not matter in that the quality of the claims are going to be the same whether the answer is $363 or $3,630,000, but let’s get real here. No law firm is going to take on an international litigation matter where only $363 is at stake.
2. What do you mean by unusable? We have handled international disputes where a client bought millions of dollars of fish that were seized by U.S. customs as a safety hazard and we have handled international disputes where one letter was misspelled on the widget. Very different cases. Which gets me to my next point, which is super critical.
3. Do you have a contract? What does it say? If they do not have a written contract that works for the relevant country (more on what the relevant country is in a second), the quality of the lawsuit just went down. Sometimes way down. If they do have a contract and the contract is silent on the key issues, the quality of the lawsuit just went down. If they do have a contract and the contract works against them the quality of the lawsuit just went way down.
4. What does the contract say about where the lawsuit must be brought? If the contract is silent on this, where can the lawsuit be brought? Many years ago, my law firm was hired by a multiple creditors to try to collect on a huge amount of clearly owed debt. The big problem with the lawsuit was that North Korea (yes, that Korea) was the only viable jurisdiction. The clients decided not to pursue the case. Where the lawsuit must be brought is critical not only to winning the case, but also to being able to collect on any judgment should you actually prevail. Will the country in which your defendant has its assets and on which you can collect on your judgment actually enforce whatever judgment you get from some other country? Oftentimes the answer is no. See China Enforces United States Judgment: This Changes Pretty Much Nothing.
5. What will the lawsuit cost and what are the chances of prevailing and of collecting from the defendant if you do prevail? Some lawsuits are relatively cheap. For instance, if someone says they will give you 100,000 pounds of fruit and all the records show they sent you only 7,000 pounds of fruit, you likely have a relatively cheap and easy case. But if you are suing to claim that a 7.8 kilogram widget is worth $1300 less per widget than a 7.9 kilogram widget, you are likely going to need to pay for experts to back this up and you may not prevail. And if you are going to claim your business’s reputation was damaged by not being able to deliver the widgets to your downstream customers, you will need another expert for that.
6. What will the lawsuit do to you outside the lawsuit? It is amazing how seldom people consider this. Just about every week one of our China employment lawyers will get an email from someone looking to sue their China employer over one thing or another. Even if you win, is that a good idea? Might you get fired as soon as you sue? Might you get reported for a visa violation and put in a Chinese jail for a month and then deported (which often happens)? Might others in your small industry learn about your lawsuit and never hire you? Many years ago, my law firm represented four professional basketball players who had complained to their professional league (in Asia) about the league’s unofficial pay cap on foreigners. These were four of the best players in their league but they were soon cut by all four of their respective teams and, as far as I know, never picked up by any professional team anywhere in the world. Had they come to me sooner you can be sure I would have discussed this possibility with them. I often have this sort of discussion with clients being chased by Sinosure.
So yeah, all of this (and a lot more) is why experienced international lawyers are so reluctant to comment on the quality of a lawsuit without first knowing a lot more.