When you’ve suffered financial loss, property damage, or personal injury at the hands of another party, seeking legal action may seem like the logical path forward. However, before filing a lawsuit, one critical factor often goes overlooked—the ability of the defendant to actually pay any monetary damages awarded. This issue is particularly relevant when the individual or small business you’re suing is uninsured.
At Ciccarelli Law Offices, we believe in empowering our clients with knowledge to make informed decisions. Below, we explore the challenges of suing an uninsured party and what steps you and your attorney can take to ensure the process is worth pursuing.
The Problem with Suing Uninsured Defendants
Obtaining a favorable court judgment is only part of the process in a lawsuit. The larger challenge often lies in actually collecting the damages owed. If the defendant is uninsured and has limited financial resources, they may be unable—or not legally required—to pay the judgment in full.
Here are some common obstacles when suing uninsured defendants in Pennsylvania:
- Limited Assets: Uninsured individuals or small businesses may not have sufficient assets to cover a damages award. Unlike larger corporations or insured entities, small businesses often operate on tighter budgets with limited property or financial resources.
- Future Earnings: If the defendant has no immediate assets, collecting damages may depend on garnishing future earnings, which can take years and may still result in incomplete collection.
- Bankruptcy Protections: Defendants facing financial instability may file for bankruptcy, which can discharge some or all of their obligation to pay damages, leaving you with little to collect.
- Time and Expense: The process of collecting a judgment—such as placing liens, garnishing wages, or seizing assets—can be time-consuming and costly, reducing the financial benefit of pursuing legal action.
Why Insurance Matters in Suing for Damages
Insurance plays a pivotal role in lawsuits for monetary damages. When a defendant is insured, their insurance provider typically covers the costs of damages up to the policy limits, significantly increasing the likelihood of successful compensation.
Without insurance, however, the only means of collecting damages is directly from the defendant’s personal or business assets. This inherently comes with greater risk and uncertainty.
The Importance of Investigating Before Filing Suit
To avoid wasting time, money, and resources, it’s crucial to investigate whether the party you’re suing has the means to pay a potential judgment. Here’s how you and your lawyer can assess the viability of your case:
- Asset Investigation
Your attorney can conduct an asset investigation to determine whether the individual or small business has sufficient property, income, or savings to satisfy a damages award. This includes identifying bank accounts, real estate, vehicles, and other valuable assets.
- Search for Insurance Coverage
It’s essential to verify whether the defendant has any applicable insurance coverage that could compensate you for damages. For example, an uninsured motorist may fall under a policy you’ve purchased for such scenarios.
- Explore Other Potentially Liable Parties
If the target defendant lacks insurance or assets, an experienced attorney can evaluate whether other parties involved in the incident may also share liability. These parties might include employers, contractors, or other entities with deeper pockets or applicable insurance policies.
- Assess Financial Stability
If the defendant is a small business, your attorney may assess its financial health. Look for signs like overdue debts, liens, or pending bankruptcy filings that could indicate poor financial stability.
Practical Considerations for Plaintiffs
Non-Monetary Goals
Sometimes, lawsuits are not just about financial compensation. If your goal is to hold an individual or business accountable or create change to prevent further harm, these non-monetary goals might still make a legal claim worth pursuing, even if recovery is unlikely.
Legal Counsel Matters
An experienced attorney can provide invaluable insight when assessing the risks, benefits, and alternatives to suing an uninsured defendant. They can guide you through asset investigations, identify potential sources of recovery, and help you make an informed decision about whether filing a lawsuit is your best option.
Get the Right Legal Guidance
If you’re considering legal action for monetary damages, it’s crucial to understand the realities of suing uninsured individuals or small businesses. Consulting with skilled legal professionals early in the process can save you time, money, and headaches down the road.
At Ciccarelli Law Offices, we’re committed to delivering practical, personalized advice for our clients throughout Pennsylvania. Contact us today for a consultation, and let’s discuss how we can help you achieve the best possible outcome for your case.
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