Almost everyone should be less afraid of lawsuits

One sad feature of modern American society is that many people, especially those tied to big institutions, don’t help each other out because a fear of lawsuits. Employers don’t give meaningful references, or ever tell their rejected interviewees how they could improve their skills. Abuse victims keep silent, in case someone on their abuser’s side files a defamation case. Doctors prescribe unnecessary, expensive tests as “defensive medicine”. Inventions don’t get built, in case there’s a patent lawsuit. I’m not an attorney myself, but my best guess is that letting litigation fears stop you is often a mistake, and I’ve given this advice to friends several times before. Here’s why:

Almost all lawsuit threats never happen

Threats are easy—anyone can threaten to sue anyone else, with two minutes of time and a smartphone. Actually suing is much harder. Outside of small claims court, hiring an attorney will usually cost tens of thousands of dollars, at least. Litigating a case takes months or even years, while angry feelings often go away after a few weeks. The person suing will have to give up a lot. Instead of playing games or taking a vacation or putting in extra hours at work, they will have to do legal research and give testimony. Most people are distracted by their families, their career, their hobbies, and their lives, and will (often rationally) eventually give up, rather than remaining obsessed with whatever the case was about.

Lawsuit mitigation can be expensive

Doctors as a profession are traditionally concerned with legal risk. But the total value of medical malpractice claims is around $5 billion per year in the US—compared to healthcare spending of $3,800 billion, malpractice lawyer fees of $3 billion, and “defensive medicine” costs of $45 billion according to one study. Likewise, the cost to media companies and journalists of not publishing articles to stop defamation suits surely exceeds that of the few dozen defamation cases against them every year (stats from the UK, but British defamation law is widely considered plaintiff-friendly). The cost of things like rape victims staying silent because of defamation threats is hard to quantify, but clearly also bad. Some of these costs will fall on you directly, but often many more are externalized; eg., the cost to a patient of not giving them the right treatment out of fear can be enormous.

Since most people aren’t legal specialists, the “knowledge” that something is a legal risk can be passed around from place to place without ever being checked, like many urban legends or droplet disease transmission or stories about the amount of iron in spinach. For example, a lot of people “hear” that IQ tests are illegal in hiring. But not only is this not true, any company can easily buy one right now—“the CCAT is a pre-employment aptitude test that measures an individual’s aptitude, or ability to solve problems, digest and apply information, learn new skills, and think critically. Individuals with high aptitude are more likely to be quick learners and high performers than are individuals with low aptitude.” Likewise, it’s easy to make up a story where something might be hypothetically risky, even if it’s never happened in court, and hard to do enough research to make sure it isn’t.

Most lawsuit types are rare

One study found around 750,000 civil lawsuits per year in big counties, with a population around 75 million, for a total annual risk of ~1% per person. But the distribution of case types is thin-tailed. Courts and lawyers are somewhat machine-like, and mostly handle the same mundane problems over and over again (this is also true for criminal cases). A majority of all the cases were either about car crashes or debt collection. Another ~9% were mortgage foreclosures. The incidence of all employment lawsuits was 1 per ~10,000 person-years; fraud lawsuits were 1 per ~5,000; product liability suits were 1 per ~6,000. The number of cases involving something like the GPL license is tiny, despite its ubiquitous use in software. Most lawyers have little quantitative training, and won’t try to crunch the numbers to calculate probabilities or expected values.

You might get sued anyway

If someone is rich, idle, and vindictive enough to really sue you, your paranoid lawsuit-proofing actions might not help. They can often sue even without a good case, and the cost to you might not be that different; time costs and lawyer fees are often similar whether you win or lose. In the infamous Prenda Law case, a team of unscrupulous lawyers took advantage of this to put porn on torrent sites, wait for it to be pirated, send mass lawsuit threats asking to be paid off (where the price was a lot, but less than that of hiring an attorney), and then eventually drop any case that someone contested as a form of extortion. Groups will sometimes use laws like CEQA as a form of legal blackmail—their goal is not to correct the “problem” they cite, but to get you to go away or pay them off. CEQA is so complex, covering over a hundred “environmental” topics (where the “environmental damage” has often been something like not providing enough parking spots), that a determined litigant can almost always find something to object to no matter what one does.

Lawyers aren’t your boss

“Lawyer” is traditionally a high-status job, and most people look to lawyers with some degree of deference and authority. When a lawyer says “don’t do X, you might get sued”, people usually listen. But lawyers are institutionally trained and personally incentivized to be conservative, largely because of asymmetric justice—if you get sued and the lawyer didn’t speak up, they could be blamed, while lawyers are almost never blamed for shooting down an otherwise high-value idea out of inaccurate risk assessment. Just like airports and missing a flight, an organization that always listens to lawyers is being more cautious than the optimum.

Just dragging it out often works

Donald Trump, despite being a cackling cartoon villain, was able to get as far as he did largely because he wasn’t afraid of risk, including legal risk. He often did things that were pretty clearly illegal, he and his companies were sued all the time, and he mostly just kept fighting until the case was dropped or otherwise shrugged it off. People who dislike Trump, who wonder how anyone like that could get elected President, should take notice that this tactic worked, that even someone like Donald Trump wasn’t stopped by litigation despite being sued by everybody at a million miles an hour. In business, for example, if a competitor sues you, by the time the suit is resolved your company will likely have succeeded or failed anyway.

The world is kind of in a mess right now

If your life is completely perfect, then you should try not to ever change anything, since by assumption any change can only make something worse. On the flip side, if your life is already as bad as it could possibly be, then any change must logically be good. Just in case anyone has been living under a rock, things in general are going wrong right now, and it makes sense to take risks (increase variance) if on your current path you lose by default. On a smaller scale, many individuals and companies are in a bad situation, where they have big problems with no obvious solution or are trending towards bankruptcy, and could stand to benefit from more risk-taking.

The worst case isn’t that awful

If you are sued, try everything you can, lose anyway, and can’t afford to pay the judgment, your wages can be garnished, but only up to 25% (in some states less, in Texas nothing at all). That’s bad, but it’s not infinitely bad; it roughly works out to −0.1 standard deviations on typical happiness/​well-being metrics, and is comparable to the cost of routine things like divorce (without the romantic heartbreak!) or changing careers. For a business or other organization, the worst case is usually bankruptcy, but businesses go bankrupt all the time when markets change or key employees leave. People are vastly more afraid of lawsuits than other things with similar outcomes, like taking on six figures of student debt to go to law school without having researched the job market. Please don’t do that. :)