Pros of Litigation

Posted by on Jul 5, 2013 in Legal Corner | 0 comments

Courts encourage out-of-court settlements, making it clear that courts either expect or contemplate that victims of theft will likely attempt to resolve their disputes with theft offenders via demand letters before ever filing suit. In fact, some statutes require that a demand letter be sent offering to settle a civil claim before suit can be filed. Parties are encouraged to attempt to work out their disputes on their own before involving the legal system in a more formal way. However, while demand letters can be very effective, saving both time and money, they do not always produce a settlement.  

This is where litigation comes into play. Whether a loss has been caused by an ex-employee or a shoplifter and whether or not a promissory note has been signed or a written admission statement given, the retailer has nonetheless suffered a legal injury and/or loss and has the right to pursue a civil claim pursuant to the relevant state’s statute. The case may not end up going to court; it may be resolved through sending certified letters or through another alternative dispute resolution procedure such as mediation. However, sometimes suit needs to be filed to get the opposing party to seriously contemplate a resolution.

While some may find the litigation process intimidating, there are definite advantages to filing suit. Some statutes allow retailers to recover higher amounts in court than retailers typically request in their pre-suit settlement demands.  For example, several statutes allow for the recovery of treble damages (three times the damages) or a wide range of additional or exemplary damages and many statutes allow for the recovery of court costs and attorney’s fees.  Once a suit has been filed, whether or not the opposing party contests the matter, if successful, a civil judgment will typically be ordered. At that point, the defendant is in a much weaker bargaining position and would be subject to post- judgment remedies designed to help the prevailing plaintiff recover its damages and costs.

Civil recovery is an important tool for the retail industry, helping retailers recoup a small portion of the incredible loss caused by theft shrink, while preventing these costs from being transferredto honest consumers through higher merchandise prices. Statutory civil penalties are also used as a deterrent to cause people in general to think twice before committing theft and to decrease the likelihood that those caught will repeat their wrongful acts. If a demand letter does not produce a resolution, litigation is simply the next natural step in the process of resolving the civil matter and holding theft offenders accountable. The more offenders that are held accountable, the better the chance of combating the billion dollar problem of theft.

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