As an Illinois lawyer practicing in Chicago, I answer many questions for friends who work outside of the legal industry. One of the most common things I’m asked is what to do if someone sues you. This article will answer that question.

Have you actually been sued?

In many cases people incorrectly think they have been sued when, in fact, only a threat of a lawsuit has been issued.

Threatening to sue someone is a cheap and often a knee-jerk response from a person who feels wronged. Filing a lawsuit takes quite a bit of work and costs money—sometimes a lot of money. Unless the person filing the lawsuit (the plaintiff) is destitute and granted a fee-waiver by the court, filing a lawsuit in Cook County costs at least $287.00 for very small cases and $379.00 for most larger cases (as of February 2021). The Cook County Clerk of Court fee schedule is available here. Additionally, the plaintiff will need to hire a private investigator or pay the sheriff to attempt to serve formal notice on the person who has been sued (the defendant). The formal notice is called a “summons,” and the cost for service is typically between $60.00 and $100.00.

Though a plaintiff can file a lawsuit without a lawyer (unless the party is a business entity), it is not an easy task as there are many technical requirements and rules. Hiring a lawyer will greatly add to the plaintiff’s costs—almost always thousands of dollars. Depending on the case, much higher fees are also possible.

Thus, since talk is cheap, it is important to determine whether you have been sued. Fortunately, this is a pretty easy task in Chicago and Cook County in general.

The first, and easiest, way to know that you have actually been sued is to have been served with a complaint (the formal legal document that starts a lawsuit) and summons. These documents are typically handed to you by the sheriff or a private investigator, but there are also other methods of service. The complaint will include a case number and will be stamped “filed” by the Clerk of Court.

If you have not received a complaint and summons or are dubious that the complaint has actually been filed, you can check the Cook County Clerk of Court Online Case Search (only for Cook County cases, including Chicago).

Though there have been some improvements over the years, the online case search isn’t the easiest tool to use. If you are overwhelmed, send me a quick email and I’ll run the search for you. If you are ready to give it a shot, however, read on. To perform your own search, follow these steps:

1. Select the appropriate division. For most people, this will involve checking the “Civil, Law, Chancery, and Domestic Relations/Child Support” search option.
2. Narrow your division in the drop-down menu. The options in the drop-down menu describe each division. Most of the time, your division will either be civil or law.
3. Select your search type. If you have a complaint or otherwise know your case number, searching by case number is easiest. Otherwise, checking for cases by name is the appropriate option.
4. Enter your search query. Search queries in this system need to be perfect (which is very frustrating). In other words, you will not get results if you make a typo. If you are searching by case number, make sure you enter the required number of digits. If you are searching by name, select “defendant” or “both.” Next, enter your name last, then a SPACE, and then your first name. If you use a comma between your last and first name, the search will not work. If you have a fairly unique last name, you might be able to get away with entering your last name only (which will help in the case where your first name is misspelled by the court clerk—which happens).
5. Review the list of cases. If you properly followed the preceding steps, you should see a list of cases. The cases are listed chronologically from newest to oldest. Unless you have a very common name, any recently filed case will be near the top.
6. Click on your case. Once you click on your case, you can print the docket (the list of parties and events that have happened). This is helpful if you need to talk to an attorney or if you need to report the case to insurance.

Many people who think they have been sued have only been threatened with a suit. If you have been sued, however, there are many factors to take into account as you decide how to respond. Next, I will address the things to consider when someone sues you.

Do you have insurance?

In many instances, defendants have insurance that will cover a potential lawsuit. If you have coverage, your insurer will pay a lawyer to defend you and will pay any judgment against you up to the policy limit. Determining whether you have insurance coverage is the first and most important thing to do if someone sues you.

Automotive insurance

In Illinois, everyone is required to have automotive insurance that covers the statutory minimum liability. The minimum amount of coverage, as of February 2021, is $25,000.00 per person injured and $50,000.00 per incident. If the lawsuit against you is in any way related to operating a motor vehicle, contact your insurer. They will provide a lawyer and defend the case if necessary.

If you were in a car accident and don’t have insurance, you are in a lot of trouble. You can lose your license, have a judgment entered against you, and potentially have to file for bankruptcy. You need to contact a lawyer immediately to try to make this situation as tolerable as possible.

If you have auto insurance but the claim is in excess of your policy’s limits, your insurer will typically advise you to hire additional counsel to represent you with respect to the excess claim. In most cases, plaintiffs are willing to accept the policy limits. However, they may seek more if the injury is particularly severe and you have enough assets or income to make it worth-while.

For this reason, it is wise to carry a robust auto insurance policy with an umbrella policy that covers excess liability (one to two million in coverage is advised).

Homeowners’ and renters’ insurance

Almost all homeowners have a homeowners’ insurance policy (as required by the bank when taking out a mortgage). Though most people think of it as insurance against loss due to fire or theft, these policies often have broad coverage for other legal claims like negligence or dog bites. If you are being sued, review your policy and talk to your insurer, since you might have coverage. If you do have coverage, the insurer will provide a lawyer to defend you and will pay any judgment against you (so long as covered by your policy and limits), just like an automotive insurer will. This is another policy you should not skimp on. (You should also have an umbrella policy for additional coverage).

Renters are much less likely than homeowners to carry insurance. As a lawyer that handles many tenants’ rights cases, I wish I could convince every tenant in the country to get renters’ insurance before they need it. Renters’ insurance is very similar to homeowners’ insurance, but it is much, much cheaper. It is so cheap that it is silly not to have it. This insurance also covers a wide swath of claims, and if you have coverage, your insurer will provide an attorney and pay the claim against you.

Personal umbrella insurance

In addition to automotive or renters’/homeowners’ insurance, some people carry a personal umbrella insurance policy. This type of policy covers a wide range of potential claims and typically has a relatively high liability limit ($1 or $2 million is common). Typically, these policies will be with the same company that provides either automotive or homeowners’/renters’ insurance. These policies are usually pretty inexpensive, and anyone with significant income or assets should consider one.

Business insurance

Most businesses of substantial size will have a liability insurance policy. Both the policy limits and types of coverage vary widely. If the incident causing someone to sue you was in any way related to your business, contact your business insurance provider to see if it will be covered by your policy.

If it turns out that you have insurance coverage for the incident you have been sued for, your insurance company will take over and guide you. If necessary, the company will even provide an attorney to represent you free of charge.

If you do not have insurance coverage, or the insurance limits are insufficient for your potential liability, keep reading to understand your options when someone sues you. I will also discuss the factors to consider when choosing among these options.

What to do if someone sues you and you do not have insurance coverage

If you have been sued and do not have insurance coverage (or have insufficient coverage), there are four primary options:

1. Hire a lawyer to represent you. In all but the smallest cases, it typically makes sense to hire a lawyer to represent your interests and resolve the case as quickly and cheaply as possible.
2. Represent yourself. If you are an individual, you can represent yourself in court. (Business entities are only allowed to represent themselves without a lawyer in very small matters). However, representing yourself is time-consuming and especially perilous if the plaintiff has an attorney.
3. Settle the case. It often makes sense to settle a case right away. This can be done with or without a lawyer. If you are acting without a lawyer, be very careful not to make admissions that could be used against you. Also be sure to have a proper settlement agreement executed by all parties. It is a really good idea to get a lawyer to draft the agreement, even if you negotiated the settlement yourself.
4. Ignore the lawsuit. Ignoring a lawsuit will typically result in a default judgment against the defendant. This is not wise in most situations, but it might make sense in a case where there is a claim for attorney’s fees and you are clearly liable. That said, settlement is almost always preferred over a default judgment.
5. File for bankruptcy. If a lawsuit is going to require more money than you have, filing for bankruptcy might be an option. However, you should never attempt to do this without a lawyer. Click here to contact us.

To help you to determine the best course of action when someone sues you, the next section will discuss factors to consider.

Factors to consider if someone sues you

There are many considerations to weigh when someone sues you. Below are some of the most important factors to consider.

How much are you being sued for?

This factor is pretty obvious—the bigger the case, the more likely you are to need a lawyer. Even if you have a strong inclination to settle, a lawyer can save thousands in negotiations, and you will have the the security of a properly drafted agreement.

Moreover, big lawsuits typically have legal representation on the plaintiff’s side. Trying to represent yourself against a professional is a recipe for disaster.

Conversely, hiring a lawyer for a really small case often does not make economic sense. Some defendants will negotiate a settlement themselves and then hire a lawyer to draft/review the agreement for a modest fee. Others will defend themselves in court knowing the downside of a loss is not that high.

Is there a legitimate claim for attorney’s fees?

In Cook County (and the United States generally), the default rule is that each party has to pay their own attorney’s fees regardless of who wins or loses.

This default rule can be changed by contract or by statutory law (federal statute, state statute, municipal ordinance, or county code). With respect to statutory law, an attorney-fee shifting provision is fairly common in laws designed to protect consumers and ordinary people. For instance, most consumer fraud laws provide that consumers will be awarded attorney’s fees if their claims are successful. Likewise, many contracts state that the prevailing party will be awarded attorney’s fees. When someone sues you for breach of contract, you need to read the contract to see if there is an attorney’s fee provision.

Determining whether there is a legitimate claim for attorney’s fees is of paramount importance in all but massive cases. This is because in cases of modest value, the claim for attorney’s fees can easily exceed the underlying claim. There is no rule saying an attorney’s fee claim cannot exceed the underlying claim, and awarding fees in excess of the underlying claim is common.

For example, I have brought many claims for violation of Chicago security deposit law. Most security deposits are around $2,000.00. The penalty for a violation brings the claim value of such a case to $6,000.00. However, in hotly contested cases the claim for attorney’s fees alone can exceed $20,000.00.

Thus, if someone has sued you for violating a law that includes fee-shifting, or if you have been sued under a contract that has a fee-shifting provision, the amount claimed in the complaint does not reflect the true risk you face.

In cases with fee-shifting, there is a strong incentive for early settlement except in certain situations—when the case is so big that fees do not matter, when the defendant is very sure they will win, when the defendant is wealthy enough to absorb a large loss, or when the defendant is poor enough that nothing can be taken from them.

Is interest accruing?

In many cases involving a breach of contract, the claim also includes accruing interest. In some cases (such as credit card debt), the interest rate can be obscene.

Cases in Cook County and Chicago almost never end quickly. Small cases can take a year (pre-Covid), and large cases can take three to five years or even longer. In many cases, the slow pace of litigation favors the defendant. Defendants often offer a smaller settlement amount right away, which appeals to a plaintiff that may have to wait years to potentially see a larger amount.

That said, this slow pace does not benefit the defendant if interest is accruing at a high rate. A debt at 29% interest more than doubles after three years of litigation. If interest is accruing at a high rate and it is clear that you are going to lose, settling early may make more sense.

Are you collectable?

When asking an attorney what to do if someone sues you, you will likely be asked about your assets and income. This is because many people do not have sufficient financial means to pay a judgment. People commonly call this being “judgment proof,” but it is more properly termed “collection proof.”

Collection is a whole article in itself, but in the interest of completeness, I will cover the basics here.

If you are sued and the plaintiff wins, a judgment is entered against you. This judgment is a piece of paper that gives the plaintiff the right to attempt to forcibly take money from you. The main ways of collecting are taking a portion of the defendant’s wages, putting a lien on the defendant’s real estate, or getting the court to direct the turnover of assets (usually money from a bank account).

Not everybody is subject to having their wages taken. Certain types of income are exempt, such as social security, public aid, unemployment, and workers’ compensation benefits.

Moreover, there are limits on taking normal wages. When collecting, the creditor cannot take more than the greater of the following:

• 15% of gross wages; or
• The amount that remains after deducting the Illinois hourly minimum wage multiplied by 45 hours per week.

Thus, if the state minimum wage is $11.00 per hour and an employee works 40 hours a week at the minimum wage, nothing can be taken from his or her paycheck. Conversely, employees that make $2,000.00 a week can have upt to $300.00 a week (15%) sent to their creditors.

With respect to assets, generally up to $4,000.00 is exempt from collection as well as $2,400.00 of a motor vehicle, $1,500.00 of professional tools, and $15,000.00 of a home or farmland. If the defendants assets are valued higher than this, the assets are subject to collection.

If you are a non-collectable debtor that will never become collectable (such as a retiree with few assets), it doesn’t always make sense to settle or put on a vigorous defense.

People with limited collectability will have to balance the cost of defending a lawsuit with the amount claimed against them as well as the interest rate on judgments (5%-9% depending on the debt).

In some instances, declaring bankruptcy might be the best solution when someone sues you, especially if a large judgment has been entered against you. Determining whether bankruptcy is a good option depends on many factors and is a lengthy article in itself. If you would like to discuss bankruptcy with an attorney, this link will take you to our contact form.

Are there concerns beyond of money?

When someone sues you, the case is typically about money. The plaintiff’s goal is to get the maximum amount of money as soon as possible, whereas the defendant’s goal is to pay as little as possible. These two interests often lead to a fairly rapid settlement of less than full recovery.

However, concerns outside of money are more important in some cases. In the next section, I will address some of those concerns.

Reputation

Depending on the nature of the allegations in the lawsuit, settling a case may cause reputational damage that the defendant finds unacceptable. Though settlements are almost never an admission of guilt, the public does not understand the nuances of lawsuits and the expenses of prolonged litigation—so the settling party is often assumed to be guilty.

When a defendant is worried about their personal reputation (imagine a lawsuit for fraud or sexual battery) or a business is concerned that bad press associated with a settlement will be damaging, fighting aggressively might be the best choice under the circumstances. This is true even if the defendant’s own attorney’s fees would far exceed the cost of settlement.

Privacy

Lawsuits and many of the filings associated with them are public record. Sometimes this can be very embarrassing. For instance, I recently reviewed a filing in a divorce case where one spouse’s income (and alleged misstatement of income) was made public record. Now, whenever that party’s name is Googled, a court document with private information appears near the top of the search results.

If maintaining privacy is a paramount concern, it is best to try to settle a case before it is ever filed. Once a lawsuit is filed, there will be some record of the case that will likely never be hidden. (Sealing cases is rare.) That said, having a little public documentation on the dispute is better than having a lot. So, even if a case has already been filed, settling quickly can maintain privacy.

Setting an example

When businesses are sued, they are often concerned about the optics of settling quickly. If an employee sues the business, the business may be concerned that other employees will pile on. If a customer files suit, the business may be afraid that more lawsuits will follow if it does not put up a fight.

Sometimes, fighting lawsuits aggressively puts others on notice that you will not be a willing piggy bank. For some companies, this is an overarching concern and results in litigating cases that would not otherwise be economical.

Licensing

If your business or career require that you maintain a certain license, lawsuits can be tricky and trigger investigations. For instance, a financial advisor may lose their license if they lose a lawsuit for fraud. Similarly, medical malpractice cases could cause doctors to be put under investigation by their governing body. Losing a license could be far more expensive than settling a case. These situations are challenging, but when a license is at risk the defendant should hire an attorney as soon as possible.

Non-judicial remedies

If someone sues you and the case goes to judgment, there are limited remedies a court can provide. In most cases, the only available remedy is an award of money (or an award of nothing if you defeat the lawsuit).

In some situations a parties desire remedies no court could provide. Parties often want confidentiality or an agreement that one party will refrain from certain actions in the future. For example, when I settle Chicago tenants’ rights cases, the settlement agreement usually bars negative references to future landlords. This is not something a court could award.

If someone sues you and a non-judicial remedy, like confidentiality, is important, settling the case may be the best way to achieve your goals.

Summary: What to do if someone sues you

If you believe you have been sued, there are several steps you should take:

1. Determine whether you have actually been sued or if the other party is merely making threats.
2. If you have been sued, determine whether you have insurance that will defend you and pay any judgment entered against you.
3. Review the monetary and non-monetary factors that will impact your case.
4. In most cases, hire a lawyer to guide you and help you achieve your goals.
5. Depending on the monetary and non-monetary factors, settle the case, allow for default, file for bankruptcy, or proceed with litigation.

If you have any questions after reading this article, or need an attorney, feel free to contact my firm.