Before You Sue: The Real Cost of Litigation

You've been wronged. Maybe a contractor walked off the job with your deposit. Maybe a former business partner broke a deal that cost you money. And now you're thinking: I should sue.

We get that call every week and our very first job — before we talk strategy, before we talk odds — is to have an honest conversation about what litigation actually costs because the number one mistake people make is assuming that winning in court means getting made whole. However, it often doesn't. 

Here's what you need to know before you decide to file a lawsuit.

The Money Starts Before You Even File

Most people are lucky enough to never know what litigation costs. Unfortunately, when you want to sue, you will spend money before a single document is ever filed with the court. 

A proper demand letter — the formal written notice you send before filing, which is almost always strategically advisable — takes time to research and draft. Expect to spend $1,500 to $3,000 just for a well-crafted demand letter, depending on complexity.

Then comes the Petition or Complaint, which is the document that officially starts your lawsuit. Drafting it, filing it with the court, and serving it on the defendant typically runs another $2,000 to $4,000 or more. 

All told, before litigation even truly begins, you could easily be $5,000 to $7,000 into the process — and the meter is still running.

Litigation Costs Don't Stop at the Attorney

Attorney's fees are the big line item, but they're not the only one. Litigation routinely involves:

1. Court filing fees — anywhere from a couple hundred dollars to over a thousand, depending on the type of case and county.

2. Service of process fees — paying a process server or constable to officially serve the defendant.

3. Deposition costs — if witnesses need to be deposed (and in most cases, they do), you're paying for court reporters, transcript preparation, and sometimes videographers. A single deposition can run between $1,000–$2,500 or more.

4. Expert witnesses — in cases involving construction defects, business valuations, medical issues, or complex damages, you may need an expert to testify. Expert fees can range from a few thousand to tens of thousands of dollars.

5. Discovery costs — gathering records, reviewing documents, and responding to the other side's requests takes significant time that you're paying for.

By the time a case reaches trial, a moderately complex commercial dispute in Texas can cost a plaintiff $80,000 to $150,000 or more in total litigation expenses. For smaller disputes, those numbers can eat up everything you're trying to recover — and then some.

The Hard Truth About Attorney's Fees in Texas

Here is the part that surprises most people: in Texas, each side generally pays their own attorney's fees, regardless of who wins.

Even if you win your lawsuit completely — even if the jury finds in your favor on every single issue — the court will not automatically order the other side to pay what you spent on attorneys.

There are, however, exceptions. Texas law does allow fee recovery in certain specific situations, including:

• Written contracts that contain a prevailing party attorney's fee clause;

• Certain statutory claims — Texas has statutes that allow fee shifting in specific areas like breach of contract under Chapter 38 of the Texas Civil Practice & Remedies Code (though this has nuances and limitations), DTPA claims, and some employment matters;

• Cases where the other side acted in bad faith.

Here’s the catch: even when fees are recoverable, the amount the court awards may not cover everything you actually spent. Courts have discretion, and what feels reasonable to you and your attorney may be reduced by a judge or jury.

The bottom line: Unless your contract specifically says the losing party pays fees — or you have a statute that allows it — assume you are absorbing your own legal costs no matter the outcome. 

So When Does It Make Sense to Sue?

Litigation makes sense when the math works and the facts are strong. Ask yourself:

What's the realistic recovery? If you're claiming $15,000 in damages and litigation will cost you $20,000, winning still leaves you in the hole. A good attorney will help you assess whether the numbers make sense.

Do you have a fee-shifting mechanism? If your contract has a prevailing party clause, the calculus changes significantly. That's worth identifying early.

How strong is your evidence? Litigation is not about who's right. It's about what you can prove. Documents, emails, and witnesses matter enormously.

What's the defendant's ability to pay? A judgment against someone who has no assets is just paper. Collecting on a judgment is a separate (and sometimes expensive) process.

Are there alternatives? Mediation, arbitration, and direct negotiation often resolve disputes faster, cheaper, and with more predictability than a courtroom.

Our Approach at The Diefenbach Group, PLLC

We believe the most valuable thing we can do for a client is give them an honest assessment upfront — even when that assessment is "this probably isn't worth it." We'd rather spend an hour in a consultation saving you from an expensive mistake than run up a bill on a case that was never going to put you ahead. 

If you're considering litigation, we're happy to walk through the facts with you and give you a straight answer about what we think it's worth — and what it'll cost.

Contact us today for a free consultation.