So it comes to pass that the lady who initially filed suit against Wendys for allowing a severed finger to appear in her chili now is indicted, charged with putting the offending digit there herself. It turns out this lady had sued several companies previously and settled out of court for a tidy sum in each case. This was just a digit too far.
We should not be surprised that bizarre claims such as this one are common enough to be the butt of jokes. Who does not recall the lady who won $250,000 from McDonalds for spilling hot coffee in her own lap? What might be surprising however, is the assault that plaintiffs and trail lawyers are making on small businesses in our country. Edmund Burke was right when he said that evil flourishes when good people who know about it, do nothing to stop it.
A core problem is the widespread silence on the part of small businesses who have been sued. I am not talking about the product liability cases where companies have done atrocious things to their customers. Nor am I referring to cases where employers systematically abuse their employees or shareholders. We all want those problems fixed and if senior executives have to write checks for millions or serve time up river, so be it.
I am talking about the larceny that goes on when disgruntled employees manufacture complaints and seek to be rewarded for the problems that got them justifiably terminated. I am talking about customers claiming they slipped on a grape, and then demanding grapes for life. I am talking about cynical trial lawyers who understand the game and therefore know that small businesses will settle because they have no choice.
For the uninitiated, here is how the game is played. A courier arrives and drops off documents informing you that you are being sued, let’s say by a disgruntled employee, and he is demanding $250,000. If this has not happened to you before, you are stunned. Clearly, this cannot be happening to you; it is a bad joke; a little explanation will make this go away. When the shock wears off you realize you need a lawyer to defend yourself. Not to worry, plenty of them are available. A fee is agreed upon and you are told you will be present at a “settlement conference.”
The purpose of this conference is to determine if you are willing to pay off the plaintiff and his lawyer. Many small businesses settle at this conference because they know what will happen if they don’t. This decision has nothing to do with whether you have done anything wrong or not. In my experience as a business psychologist, most small businesses who were clients of mine did nothing wrong, but that does not matter. To refuse to pay off your antagonists will lead to a very expensive process called “discovery.”
It has been my experience that the majority of these suits are brought by former employees who have been let go. In the vast majority of cases the employee was given ample information and time to improve but did not. No company wants to let go a potentially good person and virtually all invest resources to develop and improve their people. Nonetheless, a certain percentage of these people find a trial attorney who will take their case on contingency, knowing full well how the game is played and that there is an overwhelming likelihood the target company will pay something -- sometimes a considerable sum just to move on. The nature of the claim is almost secondary to just filing it. Severed digits, spilt coffee, implied promises to the employee, perceived slights, assaults on self-esteem; it’s all secondary to pulling the employer into a process that will only end when money changes hands.
The “discovery” process is what follows when the employer is still stunned and indignant enough not to pay off the plaintiff on the spot. This involves interviewing many people under oath and with a court reporter present. A great deal of preparation goes into this process and your bills rise, sometimes alarmingly. Your small business is entirely disrupted and your good people feel intimidated. Ill-mannered trial attorneys know this, of course, and do their best to tie people up in knots. My experience is that honest people who see nuances and live with some ambiguity are the most intimidated by the process.
At the end of discovery you are invited to another “settlement conference.” Here is what you face: pay up or move forward to the “summary dismissal phase” and then possibly on to a trial. More than 95% of cases settle at this time. In case you had other ideas, a magistrate is assigned to the case and does a form of shuttle diplomacy between the two parties. His job is to talk about the amount you will pay the plaintiff and trial attorney in order to all go home. He does not determine the merits of the case and typically appears not to care. He just wants to clear the court docket and the way to do that is to get the pay off completed. It is at this point that those who have taken it this far, feel horrifically trapped.
If you still feel abused and outraged at what has happened to you here is what you face: we move to the summary judgment phase and the cost for a small case is about $50,000. It is often much higher. This is an opportunity for a judge to determine if the case has sufficient merits to move forward to trial. If the judge throws the case out, you are still out attorney fees that are likely six figures. If the judge decides that this should go to trial, you will be out another $75,000 in legal fees and you might lose the case. Justice has become a crap shoot and the odds are stacked against the small company.
Trial attorneys are at a distinct advantage because they know all this. They understand full well the corner into which they have backed you. They understand that you are highly likely to pay; it’s just a question of how much. Outraged defendants who have never been sued before and view themselves as good corporate citizens face a steep and inevitably expensive learning curve. They often believe they are dealing with shameless people and just want to move on. And so they pay off people they fully believe to be unworthy.
Back to Edmund Burke. Silence regarding these innumerable abuses will lead to their proliferation. This cynical use of our legal system by unscrupulous plaintiffs and trial attorneys needs to be exposed. Light is the best disinfectant. I have witnessed the destruction unfettered trial lawyers and a supportive legal system can bring to bear on small businesses. Claims of a severed finger in the chili, just like the spilled coffee claim, are the tip of a very ugly iceberg.
Kevin E. Somerville, PhD, is with Somerville Partners, a firm of business psychologists. He can be reached at ksosmerville@somervillepartners.com