When a court issues a judgment in favor of a plaintiff, it would seem a case is resolved. But obtaining the judgment is just one step in the lawsuit process, not the end of it, according to Ira Reingold, executive director of the National Association of Consumer Advocates
“Just because a court makes a ruling doesn’t mean there’s going to be a payout immediately,” He says. “On occasion those cases get appealed, and on an appeal you’re certainly not going to collect because there’s an appeal of that judgment…you’re not going to collect whatever damages you’ve been awarded by the lower court.”
There are many reasons a judgment might be appealed and a big factor is the significance of the case. If there’s an opportunity to impact existing law or create new law, the U.S. Supreme Court might be the ultimate goal; that means years before any money will be paid. With each ruling on an appeal, there’s often another opportunity for either side to file another appeal.
With each opportunity for appeal, there is an opportunity to review the likelihood of another win, a loss and the cost of waiting. That’s why settlement is always an option at any point in trying to collect a judgment.
“What’s the discount of getting paid now with the possibility of a real appeal versus … whether this is completely un-appealable and the other side is completely bluffing?” Reingold says. “It’s really a judgment about how viable an appeal is and whether or not it’s worth the time value of money – getting paid now as opposed to waiting, even though you know you’re going to win or you think you’re going to win.”
Negotiation is a cost-effective method for getting a defendant to pay the court-ordered judgment . “There (are) always opportunities along this process, even after oral argument, where settlement is always a possibility,” Reingold says. “There are certain cases where people are just so angry with each other it gets personal. Or there may be a case where someone is trying to prove a point. Both those are rare.”
Assuming there are no grounds for an appeal, the defendant isn’t necessarily going to cut a check and walk away. Not being able to pay, only paying part of the judgment or being very slow to pay are some of the tactics used to avoid paying a settlement. In some cases, a defendant can declare bankruptcy or can simply avoid paying the money, ignoring all requests. In such situations, the court can step in. After a judgment is made by the court, it still has jurisdiction over the ruling and can take actions to see that the terms are carried out.
“If they’re claiming that they don’t have the money, you can bring them to court and ask the court to review their assets, to show what their assets really are,” Reingold says. “They’re going to have to produce their books. Where are your assets? How much money do you have? Where’s that held?”
Called a Rule to Show, this legal action will ask the court to intervene in the payment process. If the defendant is found to be lying about the inability to pay, hiding assets or engaging in other stalling tactics, the court can order a sanction. This is typically a fine, but can also be a contempt charge. Of course, this process can be time-consuming.
If a court has decided on a recovery in a civil case, it is up to the winning plaintiff to collect the judgment, unless the court has specifically outlined the manner and the time for payment. During collections, you can have an enforcement officer serve papers, and there are also asset search investigators and collection agencies that may be willing to help, although these services can be costly.
Another option to collect is to attach a lien against the defendant’s property or garnish a specific account. Regardless of how a plaintiff chooses to proceed when collecting a judgment, it’s probably going to take some time, says Reingold. “Each circuit has their own rules about this,” he says. “But the reality is that they’re supposed to pay at the end.”
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