damages
Why should one never threaten to sue?
<p>I've often seen it in answers and comments on this site, that if you want to sue someone, then just go ahead and sue, don't tell it them beforehand. It's often repeated as some kind of dogma, I've never seen explanations for it.</p>
<p>So, what are the exact advantages of suing someone without warning? I doubt it's the effect of surprise, and they will have plenty of time to consult their own lawyers before anything crucial happens.</p>
<p>That the following example: Alice wants to sue Bob, because he caused her some damages. The damages are high enough that she wants to be made whole, but not as high that a lawsuit would be surely expected. Let's also assume that both know that Alice will have very good chances of winning if it comes to a trial. At first Alice asks him nicely to be repaid (without mentioning a lawsuit), and Bob refuses because he thinks that Alice won't bother suing over such a thing. At this moment Alice could say that if he doesn't repay the damages she will sue. Bob would then have an incentive to pay, as he now knows that Alice is likely to sue and if it comes to that, he will likely lose much more (legal fees, time, etc.) So it would be optimal for both of them if Alice tells Bob that she will sue, as both of them would be saving time and money if he just paid her without going to court.</p>
<p>So, in the above situation, why should Alice just sue Bob without first threatening/warning/telling him? What would she lose by trying? (and is there a difference if the jurisdiction does or doesn't have a &quot;loser pays both parties legal fees&quot; policy?)</p>

<h2>Because threatening a lawsuit is a nuclear option</h2>
<p>If you are thinking about a lawsuit then you have a dispute. The best, most efficient, most effective and cheapest way to resolve a dispute is to negotiate a settlement. The best, most efficient and quickest way to derail a negotiation is to make threats.</p>
<p>People don't like being threatened. It makes them upset and angry. People who are upset and angry like to make the person who made them upset and angry upset and angry in return. This rapidly leads to an escalation of tensions often to the point that the thing (a lawsuit) that was previously only one option out of many is now the only option.</p>
<p>So instead of resolving the dispute cheaply, quickly and under the control of the parties to the dispute, it gets resolved expensively, slowly and by someone who doesn't give a rat's arse about the parties.</p>
<h2>Lawyers can't make empty threats</h2>
<p>Lawers have an ethical duty not to make threats they don't intend to follow through on. A lawyer who makes empty threats of lawsuits can be censured.</p>

<p>When dealing with a largeish company, threats to sue will often be dealt with customer relations. If their brief is to give you a runaround, that's what they will do regardless of your threats. On the other hand, once you serve notice, their legal team will often want to settle quickly out of court if it's for a modest amount.</p>
<p>However, certainly for the UK, courts don't really like surprises. For a small claim, you are expected to send a formal <a href="https://www.citizensadvice.org.uk/law-and-courts/legal-system/small-claims/making-a-small-claim/" rel="nofollow noreferrer">'letter before action'</a>. With luck that goes to legal and they settle. And in almost any jurisdiction there will be an opportunities to settle before the case goes to court.</p>

<p>If you threaten to sue in the U.S., the other party can file for a declaratory judgement against you to settle the issue. More subtle discussion about your dispute with the party can keep the decision as to being involved in a law suit in your hands. A threat can give them standing to sue for a DJ, taking that choice away from you.</p>
