To Sue or Not to Sue: 6 Key Considerations Before Suing Someone – Part 1

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You have had enough of the excuses not to pay up or there is complete silence in response to your claims. Or all attempts to settle the matter amicably have been futile. Or the debtor just called you various names which may not be named.

But before you call your lawyer in a fit of anger and instruct him to sue the debtor yesterday, take a deep breath and consider the following key considerations before commencing action. They may potentially be the deciding factors, whether individually or cumulatively, for whether it is worthwhile suing.

1. Merits of Your Claim and Potential Defences

Do you have a good case founded on a solid cause of action? And does the debtor have any valid defences? An example of a good case would be the debtor’s failure to repay certain loans to you on time as clearly set out in a well drafted contract, and the debtor’s only excuse is that he had gambled away his last dime at MBS.

Conversely, an example of a weak or fanciful claim is where you are fantasize about suing the SAF or Sergeant Chan for damages arising from the lack of sleep suffered during the 8km route march in your BMT days – 10 years after you have finished serving in the army. Note: The SAF is generally immune from civil lawsuits for any injury suffered by servicemen in the course of duty. Furthermore, there is a limitation of 3 years for personal injury claims to be filed. Worse, you have since made up for the lack of sleep.

Generally speaking, the stronger your case and the weaker the potential defences, the greater the ability to assess the probability of whether you will ultimately succeed. The greater the probability of success, the greater the reason to commence action. On the other hand, if your claim is doomed to fail, then you may wish to write off your losses. You will also need to consider whether you have relevant and credible evidence to support your version of the facts. Indeed, some otherwise strong cases are lost solely because there is a lack of evidence.

In this regard, you should get a good litigation lawyer who would be able to apply the facts of your case to the law and give you an honest preliminary assessment of the strengths and weaknesses of your case and the debtor’s potential defences. I say “preliminary” because not all facts are available right at the start, and the lawyer can only work with whatever you tell him, which may not always be the most complete and accurate picture given your sense of enthusiasm or indignation. I say “honest” because there may be some overly-enthusiastic lawyers who may give you the impression that you have a rock-solid case (“sure win one!” or “confirm plus guarantee chop”) and encourage litigation just so that they may earn your fees.

2. Size of the Claim

If the amount is too small to justify your time, money and effort to sue the debtor, this may be a case which calls for forgiveness and forbearance, and for the belief that justice will eventually be served in due course; just not by you at your own time.

In my younger days, before I was a lawyer, I used to ride a motorbike, a silver colored Honda Phantom TA150. Before I bought my bike, I had attempted to buy another bike from a third party, and had even laid down a deposit of S$200. For various reasons, the deal did not go through, and the third party refused to return my deposit – on the frivolous basis that it was non-refundable (even though there was never such agreement)! I was fuming mad and wanted to sue him for the return of the money, whatever it took. I called a lawyer friend, who told me soberly that it cost more than S$200 to file a Writ of Summons. That totally dampened my bravado, and the third party has since stolen away with my money for good. I hope he has put it to good use for engine oil or parking fines.

Similarly, before suing someone, ask yourself: how much is the claim amount? Does it justify the time, money (legal fees will be explained in Part 2), effort and stress to recover that amount, assuming the debtor is good for the money? If the amount is too small to justify your time, money and effort to sue the debtor, this may be a case which calls for forgiveness and forbearance, and for the belief that justice will eventually be served in due course; just not by you at your own time.

On the other hand, if as a matter of principle you are bent on recovering a relatively small sum of money even if your legal fees were to exceed your claim amount, there are many lawyers who would be more than happy to help you.

Note: Smaller claim amounts below S$10,000 for contractual matters (for the provision of goods and services, etc), and below S$20,000 by mutual consent of the parties, may be pursued in the Small Claims Tribunal. This process is cheaper than the usual court process, and lawyers may not be present at the hearing(s) / mediation session(s) before the Tribunal.

3. Is the Debtor Good for Money?

This is an all-important consideration. If the debtor is a poor church-mouse, a bankrupt or a foreigner with no local assets or all his property are registered in his wife’s name, then you will be throwing good money after bad.

There are some searches, which may be done through a law firm, to help determine this issue:-

(1)   Bankruptcy Search – to determine whether the debtor (individual or Company) has been made a bankrupt or wound up. This is a good indication that the debtor may have more liabilities than assets;

(2)   Personal Profile Search / ACRA Search – for an individual, to determine whether the debtor is a director or shareholder of various companies, and whether such companies are active or dormant. For a Company, to determine what the paid-up capital is, the number of shares issued, the names of the shareholders / directors, and how long the Company has been operating. In general, the bigger the Company and the longer it has been operating (with significant goodwill), the higher the chance that the Company will pay up;

(3)   Litigation Searches – to determine whether the debtor has been sued as a defendant in the Subordinate Courts or High Court for the past few years. The more often he has been sued, the more likely he would be unable to repay you;

(4)   Property Search – to determine whether a known property is owned by the debtor, whether as joint tenant or tenant-in-common, and whether the property is subject to mortgages, charges or caveats. Such a search will not reveal what properties the debtor owns. Rather, you must first know the address in order to confirm its owners.

You will also need to consider what sort of enforcement methods would be effective against the debtor assuming you are able to obtain Judgment against him, e.g. bankruptcy, winding-up, writ of seizure and sale against movable and immovable property, writ of possession (not of The Exorcist genre), writ of delivery, writ of distress, committal, garnishee (not a condiment), appointing a receiver, examination of judgment debtor, etc.

See Part 2 of the Article here.

The usual disclaimer: All opinions expressed on are entirely my own. Importantly, my opinions do not constitute legal advice and you should definitely formally engage a lawyer to confirm, vary or refute my views.

To Sue or Not to Sue: Demystifying Litigation in Singapore @ © Dominic Chan, a Singapore litigation lawyer. All rights reserved.


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