What Is It Like Emotionally to Go Through a Lawsuit?

What does a lawsuit feel like for a business owner?

A lawsuit feels like months of uncertainty and expense competing with the business for your attention, and it seldom delivers the relief you hoped for when it began. In my experience, people often expect a legal fight to bring closure. More often it keeps the dispute going, and they come out of it frustrated, distracted, and stressed, with less money because of the legal fees.

An owner carries burdens that an employee in the same lawsuit does not:

1. You make the decisions. Whether to settle, what to spend, and what to say to staff and customers all come back to you.
2. You are likely a witness. The people who made the deal or the decision at issue are the people the other side will want to question.
3. The company pays. Legal fees come out of the same cash that funds payroll and growth, and the page on what a lawsuit costs shows how they add up.
4. It feels personal. A complaint describes your conduct in the worst light the other side can support, and it can read as an attack on years of work.

Those feelings are a reasonable response to the situation. The rest of this page takes each stressful stage in turn, so that you know what is coming and which rules apply.

Why does a business lawsuit take so long?

A business lawsuit takes a long time because each stage waits on the other side, the court’s calendar, or both, and Minnesota requires the parties to use a nonbinding dispute resolution process along the way. The stages run roughly in this order:

1. Pleadings. The complaint is served, and the defendant answers or moves to dismiss. The page on the first weeks after your business is served covers the response.
2. Discovery. Each side requests documents, sends written questions, and takes depositions.
3. Alternative dispute resolution (ADR). Under Minn. Stat. § 484.76, subd. 1, “Except for matters involving family law the rules shall require the use of nonbinding alternative dispute resolution processes in all civil cases, except for good cause shown by the presiding judge.” Minnesota General Rule of Practice 114.01 carries that out by making civil cases subject to court-annexed ADR, with listed exceptions.
4. Motions. Either side can ask the judge to decide some or all of the case without a trial.
5. Trial. A judge or jury decides what is left.

The waiting between stages is part of the strain. A court date can move, and a response from the other side can take as long as the rules allow. Planning for that pace from the start makes each delay less of a setback.

Why is discovery so stressful?

Discovery is stressful because it opens your company’s emails, texts, files, and memories to the other side, and it takes your time to gather them. Under Minnesota Rule of Civil Procedure 26.02(b), a party may obtain discovery of any nonprivileged matter relevant to a claim or defense and proportional to the needs of the case. The rule also says the information does not have to be admissible at trial to be discoverable.

For an owner, that means three things:

• Old messages come back. An email written in frustration two years ago can show up as an exhibit, read in the least favorable light.
• The work falls on the company. Someone has to find, collect, and review the records, and that person can be you or a key manager.
• New messages count too. What you write about the dispute while the case is pending can also be requested.

I suggest assuming that anything you write about the dispute, to anyone other than your attorney, could be read by the other side, because Rule 26.02(b) reaches any nonprivileged matter relevant to a claim or defense. The page on Minnesota civil discovery for business defendants covers the requests and objections, and the page on legal hold notices covers the duty to keep records once a dispute begins.

What happens at a deposition, and how long can it last?

At a deposition, you answer the other side’s questions under oath while a court reporter records every word, and in Minnesota it is limited to one day of seven hours unless the court authorizes more or the parties agree. That limit is in Minnesota Rule of Civil Procedure 30.04(b), which also requires the court to allow more time if a fair examination needs it.

Three features of the rule matter to an owner:

1. The company can be deposed. Under Rule 30.02(f), a notice or subpoena can name the business itself and list the topics. The company must then designate officers, directors, managing agents, or other consenting people to testify about information known or reasonably available to it.
2. You may testify twice. An owner can be questioned individually and also serve as the company’s designee.
3. You can review the transcript. Under Rule 30.05, if you or a party asks before the deposition ends, you can review the transcript and sign a statement of changes within the period the rule sets.

A deposition can feel like a test with an audience. I suggest preparing with your attorney on the documents you are likely to be shown, because questions built around your own emails are easier to answer calmly once you have read them again. The page on how a deposition is noticed covers the notice itself.

How does a lawsuit affect your employees?

A lawsuit can turn employees into witnesses, pull them away from their work, and start rumors, and Minnesota law limits what an owner may do to influence their testimony. Employees who saw the events can be subpoenaed for depositions or trial, and others will notice the time managers spend on the case.

Pressure on an employee who may testify can be a crime. Under Minn. Stat. § 609.498, subd. 2a, a person commits third-degree witness tampering if the person “intentionally prevents or dissuades or intentionally attempts to prevent or dissuade by means of intimidation, a person who is or may become a witness from attending or testifying at any trial, proceeding, or inquiry authorized by law.” The same subdivision covers one who, “by means of intimidation, intentionally influences or attempts to influence a person who is or may become a witness to testify falsely.” The statute adds that “proof of intimidation may be based on a specific act or on the totality of the circumstances.” Under subdivision 3, “Whoever violates subdivision 2a is guilty of a misdemeanor.” Subdivision 1 makes the same conduct first-degree tampering when it uses “force or threats of injury to any person or property.”

For the rest of the staff, I suggest a short and neutral message: the company is in a lawsuit, some employees may be contacted, and one named person handles questions about it, because silence leaves room for rumor. I also suggest keeping your own views of the other side out of that message, because employees are not among the relationships listed in § 595.02, subd. 1, described below.

Who can you talk to about the lawsuit without your words becoming evidence?

Minnesota’s witness statute lists relationships whose communications a court cannot compel into testimony without consent, and the list includes your attorney, your spouse, certain health professionals, and clergy. A business partner, a friend, an employee, and a business coach are not on that list. The rules come from Minn. Stat. § 595.02, subd. 1:

1. Your attorney. “An attorney cannot, without the consent of the attorney’s client, be examined as to any communication made by the client to the attorney or the attorney’s advice given thereon in the course of professional duty.”
2. Your spouse. Under the statute, neither spouse can, “during the marriage or afterwards, without the consent of the other, be examined as to any communication made by one to the other during the marriage.” The protection “does not apply to a civil action or proceeding by one against the other,” which matters when spouses own the business together and the dispute is between them.
3. Your doctor. A “licensed physician or surgeon, dentist, or chiropractor” may not, without your consent, disclose information “which the professional acquired in attending the patient in a professional capacity, and which was necessary to enable the professional to act in that capacity.”
4. Your therapist, by license. “A registered nurse, psychologist, consulting psychologist, or licensed social worker engaged in a psychological or social assessment or treatment of an individual at the individual’s request” may not, without your consent, disclose information “which the professional has acquired in attending the client in a professional capacity, and which was necessary to enable the professional to act in that capacity.” Under Minnesota Rule of Civil Procedure 35.03, a party who “voluntarily places in controversy the physical, mental, or blood condition of that party” waives the privilege in that action regarding the testimony of “every person who has examined or may thereafter examine that party or the person under that party’s control with respect to the same physical, mental, or blood condition.”
5. Clergy. A member of the clergy cannot be examined about a communication from “any person seeking religious or spiritual advice, aid, or comfort” without that person’s consent.

Support from people outside that list still matters, and the statute does not forbid those conversations. It means those people can be asked about them. A written message to a friend or partner about the case is also nonprivileged material that Rule 26.02(b) can reach if it is relevant.

One qualifier applies if your case is in federal court. Under Federal Rule of Evidence 501, “in a civil case, state law governs privilege regarding a claim or defense for which state law supplies the rule of decision.” For a claim decided under federal law, federal privilege law applies instead of § 595.02.

How do anger and fear lead to costly litigation decisions?

Anger pushes owners toward filings meant to punish, and fear pushes them toward settling on any terms, and both cost money. Minnesota’s sanctions statute addresses the first. Under Minn. Stat. § 549.211, subd. 2, an attorney or unrepresented party who presents “a pleading, written motion, or other paper” certifies, based on “an inquiry reasonable under the circumstances,” that “it is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.” Under subdivision 3, if, “after notice and a reasonable opportunity to respond,” the court finds a violation, it “may, subject to the conditions in this section, impose an appropriate sanction upon the attorneys, law firms, or parties that have violated subdivision 2 or are responsible for the violation.”

That exposure reaches you, the party, and not just your attorney. Subdivision 5 states that “Monetary sanctions may not be awarded against a represented party for a violation of subdivision 2, clause (2),” which is the clause on legal arguments. It does not extend that protection to a paper filed for an improper purpose. The page on counterclaims filed to retaliate covers how an angry counterclaim can backfire.

Winning also returns less money than you might expect. Under Minn. Stat. § 549.02, subd. 1, a defendant receives $200 in costs “Upon discontinuance or dismissal or when judgment is rendered in the defendant’s favor on the merits,” and a plaintiff receives $200 “Upon a judgment in the plaintiff’s favor of $100 or more in an action for the recovery of money only.” Under Minn. Stat. § 549.04, subd. 1, the prevailing party “shall be allowed reasonable disbursements paid or incurred, including fees and mileage paid for service of process by the sheriff or by a private person.” Neither section mentions attorney fees. The page on recovering legal fees after you win covers when fees can shift. If a defendant’s offer “expressly refers to Rule 68” and the defendant prevails or the plaintiff’s relief “is less favorable than the offer,” Minn. R. Civ. P. 68.03(b)(1) provides that “the plaintiff-offeree must pay the defendant-offeror’s costs and disbursements incurred in the defense of the action after service of the offer, and the plaintiff-offeree shall not recover its costs and disbursements incurred after service of the offer,” and Rule 68.03(b)(2) addresses a defendant who rejects a plaintiff’s Rule 68 offer.

I suggest making each major decision (filing a claim, adding a counterclaim, accepting or rejecting an offer) on a day when you are not reacting to the latest filing, because the costs of an angry or frightened choice last long after the feeling passes.

How does mediation work when you are worn out?

Mediation is a negotiation led by a neutral person, and nothing in it binds you unless the parties reach a valid agreement. Under Minn. Stat. § 484.76, subd. 2, court-required ADR methods “must be nonbinding unless otherwise agreed to in a valid agreement between the parties.” A mediation day can run long, and a decision that comes late in the day comes when everyone at the table is tired.

The Minnesota Civil Mediation Act sets a rule for a mediated settlement agreement, which Minn. Stat. § 572.33, subd. 4 defines as “a written agreement setting out the terms of a partial or complete settlement of a controversy identified in an agreement to mediate, signed by the parties, and dated.” Under Minn. Stat. § 572.35, subd. 1, “A mediated settlement agreement is not binding unless” one of two conditions is met:

1. “it contains a provision stating that it is binding and a provision stating substantially that the parties were advised in writing that (a) the mediator has no duty to protect their interests or provide them with information about their legal rights; (b) signing a mediated settlement agreement may adversely affect their legal rights; and (c) they should consult an attorney before signing a mediated settlement agreement if they are uncertain of their rights,” or
2. “the parties were otherwise advised of the conditions in clause (1).”

A dispute between a debtor and a creditor has one more step. Subdivision 2 provides: “In addition to the requirements of subdivision 1, a mediated settlement agreement between a debtor and creditor is not binding until 72 hours after it is signed by the debtor and creditor, during which time either party may withdraw consent to the binding character of the agreement.” I suggest checking the current text of subdivision 2 before relying on that period.

Undoing a signed agreement later is limited. Under Minn. Stat. § 572.36, a court “shall set aside or reform a mediated settlement agreement if appropriate under the principles of law applicable to contracts, or if there was evident partiality, corruption, or misconduct by a mediator prejudicing the rights of a party.” I suggest reading the term sheet line by line before signing, and asking for time when a term is new to you, because contract-law principles and mediator misconduct are the grounds the statute names.

What you say at mediation also has some protection. Under Minn. Stat. § 595.02, subd. 1(m), “A person cannot be examined as to any communication or document, including work notes, made or used in the course of or because of mediation pursuant to an agreement to mediate.” The paragraph continues: “This does not apply to the parties in the dispute in an application to a court by a party to have a mediated settlement agreement or a stipulated agreement resulting from the collaborative law process set aside or reformed.” It also provides that “A communication or document otherwise not privileged does not become privileged because of this paragraph,” and that “This paragraph is not intended to limit the privilege accorded to communication during mediation or collaborative law by the common law.”

Under subdivision 1a, the person presiding at the mediation is not competent to testify “in any subsequent civil proceeding or administrative hearing” about it, “except as to any statement or conduct that could: (1) constitute a crime; (2) give rise to disqualification proceedings under the Rules of Professional Conduct for attorneys; or (3) constitute professional misconduct.” The page on mediation and other ADR in Minnesota covers the process choices.

What helps a business owner carry a lawsuit with less stress?

A lawsuit is easier to carry when you treat it as a project with a goal, a budget, and a small team, kept apart from the rest of the business. These steps apply the rules above:

1. Write the goal in one sentence. Getting paid for unpaid invoices and stopping a former partner from competing lead to different decisions. I suggest judging each later choice against that sentence, because anger and fatigue can pull a decision away from that goal.
2. Set a budget by stage. Ask your attorney for an estimate through pleadings, discovery, mediation, and trial, because the costs statutes return little even if you win.
3. Name one internal point person. One person handles records requests and staff questions, which keeps the case from spreading through the company.
4. Keep case talk inside the privileged circle. Your attorney, your spouse, and a qualifying health professional are protected under § 595.02, subject to the Rule 35.03 waiver described above; others can be asked what you said.
5. Put the hard stages on the calendar. Block the days before and after depositions and mediation, because those are the days you will have the least attention for the business.
6. Look after yourself. Sleep, exercise, and time away from the case are part of making good decisions. If you see a counselor, check the license against paragraphs (g) and (i) of § 595.02, subd. 1, and keep in mind that Rule 35.03 waives the privilege if you voluntarily place your own mental condition in controversy.
7. Keep pressure off employee witnesses. I suggest routing their questions to the point person and saying nothing that discourages testimony, because § 609.498 makes it a crime to use intimidation to keep a witness from testifying.

Getting Through a Lawsuit

A lawsuit is hard for a business owner because it is slow, costly, uncertain, and personal at the same time. Knowing the rules for each hard moment makes it easier to carry: what discovery reaches, how long a deposition can run, which conversations stay private, what pressure on a witness is a crime, and when a mediation agreement binds you. More on how Minnesota business cases proceed is collected under business litigation. I can analyze a lawsuit your company is facing and tell you what each stage will involve, what it is likely to cost, and which decisions are coming. If you would like that, email [email protected] with a short description and the complaint or demand you received.