When your rights have been violated, and there is a sense that more than one person or company is involved, pause before adding parties to the list of defendants.

In a recent case that came to my attention, the parties were in a dispute over how much a writer of a screenplay should be paid for their services.  That dispute, between those two parties, was fairly narrow and one that likely would have been resolved down the road through a court ordered mediation.  The course of events in that case is instructive for our purposes.

The writer of the screenplay sued a producer to be paid more than they were paid for their script.  The producer, however, chose to counter sue not just the writer, but also a lawyer involved in the production and the contemplated director for the film. The lawyer who was added, however, had an agreement with the producer that contained an arbitration clause. The director who was sued is known to be an aggressive litigant.  Accordingly, the lawyer who was added as a defendant filed a motion to compel a court order that the entire case be presented to an arbitrator, something the producer sued by the writer had not contemplated.  Also, the director who was added as a defendant turned out to be ultra-aggressive in their tactics, increasing the costs of the case significantly and adding issues to what was a fairly straightforward matter.

This is a good reminder to stop and consider all of the consequences of adding parties to a lawsuit.  Always do remember to review your contracts with them to see if they require arbitration, have other clauses such as prevailing party attorneys’ fees clauses, or venue or choice of law clauses that might diverge from the path you want to take with your case.  Also, consider the attributes of the person or company that you are about to sue.  Are they going to make the case more expensive?  Do they have deeper pockets than the primary party from whom you seek relief?

There are plenty of good reasons to add parties, as you may be able to establish joint and several liability and collect from any one or more of them, or one might have insurance coverage or other assets that will add to the sources from which a judgment can be collected. The point is that in adding a party, you must stop, consider all the consequences of adding them and then make a decision that is in line with the best interests of your case.