When to Sue: When Litigation is Worth It
When it comes to hiring contractors, businesses and individuals in Florida often find themselves in a situation where the contractor has proven to be too incompetent or their service or product too inadequate to fulfill the purpose for which they were hired. When this occurs, the hiring party must determine if taking legal action is the best way to resolve the situation. For businesses to decide if it makes sense to sue, the most important factors to consider include the amount of damages that were caused and whether the company can afford to take on the legal costs associated with the lawsuit. For individuals, the most important factors to consider include the financial resources available and the likelihood of winning the lawsuit.
Otherwise, it makes sense seeking to resolve the matter outside of court.
The Legal Requirement to do Adequate Work
In Florida contract law, an implied warranty of fitness is made whenever a sales contract is signed and dated. According to Florida Statute 672.315, if a contractor can reasonably determine what the service or product will be used for, they are required to provide it competently enough to fulfill that purpose. Even in cases where no physical document has been signed, an implied contract between buyer and seller can still be enforceable in court.
However, a buyer must decide whether the potential cost in terms of lost time and legal fees makes a lawsuit against a contractor worthwhile. In almost every case, it makes financial sense to exhaust all non-litigation options before choosing to sue.
Buyers who receive poor service or products from a contractor can first approach the contractor to present grievances and propose just compensation for the less-than-adequate delivery. Just compensation may be in the form of redoing the service or re-providing the products in an adequate manner at no additional cost to the seller. If this first step does not resolve the issue, the parties to the contract can negotiate a settlement that takes into consideration the portion of the work done by the contractor that was adequate and the financial impact incurred by the buyer due to the inadequate product or service delivered. At this point, the buyer can contract the services of a Florida attorney with experience in contract disputes. A litigation attorney will seek to reach a resolution swiftly and favorably for their client usually at first though representing the client during mediation. In mediation, the parties of the contract meet with an appointed mediator who is tasked with facilitating a negotiation with a view to resolving the conflict. It is recommended that parties arrive at mediation with legal counsel to best represent the interests of the party they represent during the session. While mediation does incur costs such as fees for the venue, the mediator and legal representation, the overall costs are a fraction of what would be spent in court. Therefore, both parties have a financial interest to resolve the discussion through mediation rather than allow it to progress to litigation.
Nevertheless, if negotiation and mediation do not result in a resolution. The matter may need to be resolved in court.
Venue and Law
Where a case is tried and the specific laws that are used can be determined by the jurisdiction clauses in the contract that governs the business relationship of the parties. These clauses may designate that a court in the home county, state or even foreign country be the physical location where the dispute is to be settled. In some cases, the governing contract may even choose a certain jurisdiction’s law. If, for example, the contract states that the courts of Wichita, Kansas are to be the venue where a dispute between the parties is to be tried if one of the parties is based in Florida that will most certainly incur costs and time as representatives from that party may have to travel to attend court there and hire local legal representation. However, if the contract states that the laws of Kansas apply, then the courts in the location of the delivery of the service may hear the dispute applying Kansas law. This can also incur additional costs to the parties as they will be required to hire Florida attorneys that will need to research and apply Kansas law to the matter.
“…if negotiation and mediation do not result in a resolution. The matter may need to be resolved in court.”
The Cost of Litigation
Because litigation is expensive and time-consuming when compared to all other legal avenues of dispute resolution, it is in the best interest of both parties to avoid it. However, should litigation be necessary, parties can expect to pay attorney’s fees, court fees and potentially additional fees related to process servers, investigators and forensic accountants depending on the nature of the matter.
Many contracts have clauses that state that the prevailing party’s attorney’s fees and other legal costs are recoverable. This means that if a party wins the case, the opposing side must pay for all legal costs.
The process by which fees are recoverable is closely controlled by the court. The process typically involves the court determining whether the amount of hours that a firm spent on litigation is reasonable. Florida courts expect up-to-date and records of work completed on a case as well as an accurate account of time spent. The attorney applicant is expected to present these records to the court, which in turn determines a reasonable hourly rate for the legal services. Any discrepancies and inaccuracies in the information provided by the attorney may result in a reduction of the hours claimed by the court.
South Florida Law
Commercial litigation can be a costly and time-consuming process, and it’s important to have an experienced legal partner on your side if you’re facing a lawsuit. At South Florida Law, we have years of experience handling complex litigation and dispute resolution, and we have the resources to help you navigate the legal system and achieve the results you need.
We counsel on all commercial dispute resolution mechanisms including mediation and arbitration.
We also understand that staying within our client’s financial budget is important and work closely with our clients to keep our legal services cost-effective with a view to achieving outstanding results. Contact us today to get started by reaching out to us on our contact form or by calling (954) 900-8885.