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When you've been burned by someone in business, the usual desire is to sue. Whatever the reason for wanting to sue, be very careful. Lawsuits are not for the faint of heart. Lawsuits are ugly, expensive, time–consuming, and generally a poor way to settle disputes among small businesspeople. To succeed, you must be willing to spend a bundle and do what is necessary to win.
First, consider the costs of the suit. If you can find a lawyer who will take the case on contingency, you must be willing to pay him or her at least 33 percent of any recovery you may get. And, if you have to pay by the hour, $250 an hour (an estimate of the average lawyer's hourly rate) adds up quickly. The suit can easily cost you tens of thousands of dollars. When you combine this with the fact that going in, your odds of winning are only 50–50, you can begin to see why suing may not be the best solution to your business problem.
Moreover, you can expect that you'll be involved in your lawsuit for about two to three years, and during that time, you will be forced to re–live and re–tell your tale of woe time and again.
So, unless you are willing to be involved with the lawsuit for the foreseeable future, are willing to pay a lot for no guaranteed outcome — and unless you have a very good case — you may be best off not suing. Instead, my advice is to get the other party to agree to take the problem to an arbitrator or mediator and resolve things outside the legal arena. It will be far more cost–effective, and you will very likely get an equal (if not better) result.