Suing a company follows a predictable sequence that usually takes one to three years from filing to resolution: you file a complaint, serve the company, exchange evidence in discovery, try to settle, and go to trial only if nothing else resolves the dispute. About 99 percent of federal civil cases never reach a jury verdict. Most settle, get dismissed, or are decided on pre-trial motions. Knowing what each stage looks like, and what it costs, lets you decide whether a lawsuit is worth starting in the first place.
Check Your Filing Deadline First
Every lawsuit has a statute of limitations. Miss it and the court will almost certainly throw your case out, no matter how strong the facts are. The window depends on the claim and the state. Personal injury claims generally carry a two-to-three-year deadline in most states. Breach of contract claims often allow three to six years, sometimes longer. Fraud, product liability, and employment claims each have their own timelines.
The clock usually starts on the date of the injury or breach. A principle called the discovery rule can delay that start: the deadline begins when you knew or reasonably should have known about the harm. That matters for defective products, hidden contract violations, and injuries that weren’t immediately obvious. If you suspect a company has wronged you, confirming you’re still inside the filing window is step one.
Filing the Complaint
A lawsuit begins when you file a complaint with the appropriate court. The complaint lays out what the company did, how it harmed you, and what you want the court to do about it, usually money damages, sometimes an injunction or other relief. You need to name the company’s correct legal entity. Suing “Joe’s Plumbing” when the registered business is “J.R. Smith Plumbing LLC” can create problems that delay or derail your case.
Filing requires a court fee. In federal court that fee is currently $405. State court fees vary widely, from under $100 to several hundred dollars depending on the court and the amount claimed. Paying the fee and submitting the complaint opens your case file and assigns a case number.
Serving the Company
Filing doesn’t notify the company. Service of process does. You must formally deliver the summons and a copy of the complaint, and for a corporation that typically means handing the documents to a company officer, a managing agent, or the registered agent the company has designated to receive legal papers. In federal court, you can also follow the service rules of the state where the company is located. Once service is complete, proof of service goes on the court record, usually through the server’s affidavit confirming when, where, and how delivery happened.
How the Company Responds
Once served, the company has a limited window to respond. In federal court that window is 21 days. State courts typically set a 20-to-30-day deadline. If the company ignores the lawsuit entirely, you can ask the court for a default judgment, essentially winning because the other side didn’t appear.
The most common response is an answer. The company goes through each allegation and admits it, denies it, or says it lacks information to respond. The answer may also raise affirmative defenses: legal reasons the company should win even if your facts are true, such as a waiver you signed or a missed filing deadline.
Instead of answering, the company may file a motion to dismiss, arguing your complaint has a fatal flaw. Wrong court, no valid legal claim, improper service. If the judge grants the motion, the case ends early, though courts often give you a chance to fix the complaint and refile. If the motion is denied, the company then has to answer.
The company can also sue you back. Along with its answer, it can file a counterclaim: its own lawsuit against you inside the same case. Under federal rules, a counterclaim arising from the same events as your complaint is compulsory, meaning the company must raise it now or lose it forever. Unrelated claims can be raised as permissive counterclaims. Either way, you’ll need to file an answer to the company’s allegations.
Discovery: The Longest Stage
After the initial filings, the case enters discovery, the formal exchange of information and evidence. This is almost always the longest phase of a lawsuit, often running three months to a year. The purpose is to eliminate surprise: both sides see the evidence before trial so the case gets decided on the merits.
Discovery runs on three main tools. Interrogatories are written questions the other side must answer in writing, under oath. Requests for production force the other side to hand over documents and electronically stored information: emails, contracts, financial records, text messages, database entries. Depositions are live question-and-answer sessions, under oath and recorded, where attorneys question witnesses including company employees, executives, and outside experts.
Electronic Evidence Must Be Preserved
Electronic discovery is now a major piece of litigation against companies. Both sides must take reasonable steps to preserve electronic evidence as soon as litigation is anticipated, even before the complaint is filed. Companies have to disclose relevant electronically stored information early in the case.
Losing or destroying that evidence has real consequences. If a court finds a party lost electronically stored information by failing to take reasonable preservation steps and the loss prejudices the other side, the court can order measures to cure the prejudice. Where the destruction was intentional, the court can instruct the jury to presume the lost evidence was unfavorable, or enter a default judgment against the party that destroyed it.
How Most Cases Actually End
Settlement negotiations can happen at any point and resolve the vast majority of cases. Sometimes attorneys negotiate informally. Other times, the court orders or the parties agree to mediation, where a neutral mediator helps both sides work toward a resolution. Mediation isn’t binding unless both sides agree to the terms; the mediator facilitates, not decides.
Two procedural tools can also end a case before trial. A motion for summary judgment, typically filed after discovery closes, asks the court to rule in one side’s favor without a trial on the ground that the evidence is so one-sided no reasonable jury could find the other way. Courts grant these motions when the key facts aren’t genuinely disputed and the law clearly favors one side.
The other tool is an offer of judgment. The company can formally offer to let judgment be entered for a specific amount at least 14 days before trial. If you reject the offer and then win less than what was offered, you get stuck paying the company’s post-offer costs. That creates real pressure to settle when the offer is in a reasonable range.
If the Case Goes to Trial
If nothing resolves it earlier, the case proceeds to trial. Most civil trials involve a jury, though either side can sometimes request a bench trial decided by the judge alone. You present your evidence first because you filed the lawsuit; the company presents next; both sides cross-examine the other’s witnesses. After closing arguments the judge instructs the jury on the law and the jury deliberates to a verdict. Civil cases in federal court require a unanimous verdict unless the parties agree otherwise. Many state courts allow verdicts by a supermajority.
After the Verdict
Winning a verdict doesn’t put money in your account. A judgment is a piece of paper saying the company owes you. Collecting is a separate process.
Collecting What You’re Owed
If the company doesn’t pay voluntarily, you become a judgment creditor with tools to force collection: garnishing bank accounts, placing liens on property, seizing assets through a court order. If the company is a shell with no real assets, collection can be difficult or impossible. In limited circumstances courts allow piercing the corporate veil to reach the personal assets of owners, but that requires showing the owners treated the company as a personal piggy bank, ignored corporate formalities, or used the entity to commit fraud.
Interest on Unpaid Judgments
Interest accrues on unpaid federal judgments from the date the judgment is entered. The federal rate is tied to the weekly average one-year constant maturity Treasury yield for the week before the judgment date, compounded annually. State courts set their own post-judgment rates, and those vary significantly. The interest adds up and gives the losing company a financial reason to pay promptly.
Appeals
The losing side can appeal by asking a higher court to review whether the trial court made legal errors that affected the outcome. An appeal isn’t a do-over: the appellate court reviews the trial record and legal arguments and doesn’t hear new evidence. In federal court, the notice of appeal must be filed within 30 days after judgment is entered, or 60 days when the federal government is a party. State deadlines vary. Missing the deadline almost always forfeits the right to appeal.
Taxes on What You Recover
How your recovery is taxed depends on what it compensates. Damages received on account of personal physical injuries or physical sickness, including lost wages caused by the injury, are excluded from gross income. Punitive damages are always taxable, with a narrow exception in some states for wrongful death cases where punitive damages are the only remedy available. Compensation for emotional distress not connected to a physical injury is taxable, except to the extent it reimburses actual medical expenses you haven’t previously deducted. Lump-sum settlements that don’t allocate between categories can create tax headaches, since the IRS looks at the nature of the underlying claim rather than how the payment is labeled.
What Suing a Company Costs
Lawsuits are expensive, and the cost extends well beyond attorney fees. A realistic picture before you file helps you decide whether the potential recovery justifies the expense.
How Attorneys Charge
Civil litigation attorneys typically bill in one of three ways. Hourly billing is common in contract disputes and business litigation, with rates that vary heavily by market and experience. Contingency fees, where the attorney takes a percentage of whatever you recover, are standard in personal injury and some employment cases. The typical contingency is roughly a third of the recovery if the case settles before trial, rising to 40 percent or more if it goes through a full trial. Under a contingency arrangement you pay nothing upfront and nothing if you lose, but you give up a substantial piece of any win. Some cases run on a hybrid: a reduced hourly rate plus a smaller contingency percentage.
Other Expenses That Add Up
Beyond attorney fees, litigation generates out-of-pocket costs:
- Court filing fees, a few hundred dollars in most courts, paid when you file the complaint.
- Deposition costs. Court reporters charge per page for transcripts, and video depositions cost more. A single transcript can run several hundred to over a thousand dollars.
- Expert witnesses. Many cases against companies require expert testimony on technical subjects, and experts typically charge several hundred dollars per hour for case review, depositions, and trial testimony.
- Document production and e-discovery. Collecting, reviewing, and producing electronic records can be one of the most expensive parts of litigation, particularly in cases involving large volumes of email and data.
- Service of process fees. Paying a process server or sheriff to deliver the complaint typically runs $50 to $150.
In most American civil cases, each side pays its own attorney fees regardless of who wins. That default is called the American Rule. Some statutes and contracts shift fees to the loser, but don’t assume that applies unless your specific claim includes a fee-shifting provision.
When Small Claims Court Makes More Sense
If your dispute with a company involves a relatively small amount of money, small claims court is a faster and cheaper option. These courts are built for people representing themselves, procedures are dramatically simpler, and hearings typically last less than an hour. There’s no discovery and no formal motions. Maximum claim amounts vary by state, generally ranging from $2,500 to $25,000.
The tradeoffs are real. The streamlined process means you can’t compel the company to produce documents or sit for depositions before your hearing. Many states don’t allow an appeal of a small claims decision. Some jurisdictions restrict or prohibit attorneys from appearing, which can work in your favor if you’d otherwise be outmatched by corporate counsel. If your damages exceed the small claims limit, you’ll need to file in regular civil court and work through the full process above.