The Short Answer: The Main Downsides of Litigation
The main downsides of litigation are cost, time, loss of control over the outcome, public exposure, and disruption to daily business. The National Center for State Courts describes commercial and civil litigation as associated with costs, delays, complexity and unpredictability.
How hard each downside hits depends on the dispute, the contract and the forum. A claim that looks small on paper can cost more to pursue than the amount in question. Owners often feel this most when the dispute touches payroll, a project schedule or a loan.
This page explains these trade-offs in general terms. No one can promise how any particular dispute will end, so use the points below as a framework for weighing your options.
Cost: Attorney Fees, Court Costs, and What Is Often Not Recovered
Attorney time is usually the largest cost in a lawsuit. Other costs add up quickly. These include court filing and motion fees, deposition and transcript charges, and fees for third-party witnesses and records retrieval.
Florida follows what lawyers call the American rule. Under Price v. Tyler (Fla. 2004), each party generally bears its own attorneys’ fees unless a contract or statute provides otherwise. Winning a case does not always mean the business gets its legal bills back.
Two rules can change who pays, and they cut both ways. A contract may allow fees to the party that has to enforce it. Under Fla. Stat. § 57.105, the court may then allow fees to the other side when that party prevails. Section 57.105 requires the court to award a fee, paid in equal amounts by the losing party and its attorney, where a losing party knew or should have known that a claim or defense lacked support in the material facts or in then-existing law, but monetary sanctions may not be awarded in certain cases, such as a good-faith argument for changing existing law, or against a represented party on the then-existing-law ground.
Costs also build over time. A dispute that looks small at filing can grow with every motion and deposition. Case evaluations with our team carry a fee.
Time, Delay, and the Appeal Process
Litigation often runs for many months and sometimes for years. Court calendars, motion practice and discovery all add time. Discovery covers document requests, depositions and written questions, and it pulls staff away from regular work.
A judgment is not always the end. Post-trial motions and appeals can extend the timeline and add cost. Each step can add time before the business sees a final answer.
Delay also reaches the cash flow. A business waiting on a verdict may be carrying unpaid invoices. A contractor waiting to be paid may stop work. In construction disputes, a stalled job can push out the project schedule and the costs that come with it. Pending real estate closings can slip while the case runs.
How much any delay hurts depends on the facts of the case. A business with cash reserves may weigh delay differently than one that depends on a single receivable.
Loss of Control Over the Outcome
In a lawsuit, a judge or jury decides the result. The business gives up control over the final answer, even when that answer feels wrong. The National Association of Insurance Commissioners reports that litigation may expose businesses to very large verdicts and related financial risks. Attorneys can use trial strategies and appeals to mitigate those risks.
Settlement works differently. The parties can shape the terms during the case, and a deal they accept is their own. Florida also sets timing rules for settlement offers. Under Fla. Stat. § 45.061, a written offer remains open for 45 days unless withdrawn sooner. Fla. Stat. § 45.061 reads: “The offer shall remain open for 45 days unless withdrawn sooner by a writing served on the offeree prior to acceptance by the offeree.” An offer neither withdrawn nor accepted in that time is deemed rejected.
Offers can carry fee consequences too. In a civil damages case, Fla. Stat. § 768.79 lets a defendant recover reasonable costs and attorney’s fees incurred from the date the offer was filed if an offer is not accepted within 30 days and the judgment is one of no liability or the plaintiff’s judgment is at least 25 percent less than that offer, though the court may, in its discretion, determine that the offer was not made in good faith and disallow the award.
Evidence rulings and procedural decisions can also change a case’s direction in ways that are hard to forecast. No one can promise a particular result.
Public Record, Business Disruption, and the Personal Toll
Court filings are often open to the public. Customers, lenders, competitors and reporters may read complaints, exhibits and rulings. A business that values privacy may find that hard to protect once a case is filed.
Disruption is daily. Owners, managers and employees spend hours gathering documents, preparing for depositions and answering questions. That time pulls people away from sales, projects and customers. Many businesses feel this most during their busiest seasons.
Working relationships can strain too. Business partners, shareholders, long-term contractors and subcontractors often must keep dealing with each other while the case runs. Shareholder and partnership disputes can make routine decisions harder to make.
The stress is real. A founder whose company or personal finances are tied to the dispute may carry that pressure home every day. Lawsuits can wear on families, too.
How Arbitration and Other ADR Compare
Alternative dispute resolution (ADR) means resolving a dispute outside a courtroom trial. The common forms are negotiation, mediation and arbitration. In mediation, a neutral helps the parties reach their own agreement. In arbitration, an arbitrator decides the dispute.
Arbitration has its own downsides. Parties typically pay the arbitrator’s fees, and discovery may be narrower than in court. Review of an award is limited. Under Fla. Stat. § 682.13, a motion to vacate an award generally must be filed within 90 days after the movant receives notice of the award, unless the movant alleges that the award was procured by corruption, fraud, or other undue means, in which case the motion must be made within 90 days after the ground is known or by the exercise of reasonable care would have been known by the movant. The grounds are specific, including fraud, corruption, evident partiality and an arbitrator exceeding the arbitrator’s powers. Florida’s arbitration code also lists the specific orders that can be appealed, as set out in Fla. Stat. § 682.20.
Arbitration also has advantages. Parties often choose it for privacy and scheduling flexibility, and they can agree on a decision-maker with relevant industry background. Under Fla. Stat. § 682.02, a written agreement to arbitrate is generally valid and enforceable. Under Fla. Stat. § 682.03, a court may not refuse to order arbitration because the claim lacks merit. Mediation communications are generally confidential under Fla. Stat. § 44.405.
Whether arbitration beats court depends on the contract, the dispute and the business’s goals. The forum clause in a contract often answers that question early.
Weighing Your Options With a Dispute in Front of You
Many readers looking into this topic did not choose the fight. A payment stopped coming. A contractor walked off a job. A partner stopped cooperating, or a real estate closing fell apart. Some are researching on behalf of a company they run or advise.
The downsides above matter more or less depending on the contract, the amount at stake and the timeline the business faces. A company that needs a quick payment feels delay differently than one with time and reserves.
For background, see the real estate litigation overview and the cost context for real estate litigation.
Ayala Law PA focuses on business, commercial, contract, shareholder, construction, real estate and international trade litigation in Florida courts and arbitration. The firm’s only office is at 1646 W Snow Ave in Tampa, and it serves businesses in Tampa and Hillsborough County. Eduardo A. Maura is the responsible lawyer for this page.
If a dispute has you weighing a lawsuit against arbitration or more negotiation, contact our team at (305) 570-2208 or through the contact page to talk through your situation.
