There is often confusion between the terms “claim” and “lawsuit.” Generally speaking, a claim precedes a lawsuit, meaning that a claim comes first, and if the claim cannot be amicably resolved, the claim can result in a lawsuit. The claim can be a personal injury claim, an insurance claim or any other type of situation where one party believes it has been wronged by another. For example, if you enter into a contract with a roofing company and it fails to complete the job or it doesn’t do the job correctly, you have a claim against the roofing company. The claim arises when the roofing company fails to perform. Depending on the language in the contract, you may need to do certain things to perfect the claim, but the claim nevertheless exists when the work isn’t done or isn’t done right.
A lawsuit is a dispute that has been brought to court. Someone who has a claim but believes they haven’t been properly compensated can file a lawsuit in court. The party who brings a lawsuit is called the “plaintiff,” and the party who is sued is called the “defendant.” A lawsuit is sometimes referred to as a “case.” Technically, a “case” and a “lawsuit” are the same and are different than a “claim,” which comes before a case or a lawsuit.
If you are injured in a car accident and the other driver was at fault in causing the accident, you have a “claim” against the other driver, as a car or motorcycle accident lawyer can explain. If attempts are made to settle the claim, but the attempts are unsuccessful, the next step in obtaining fair compensation would be to file a “lawsuit” in court against the other driver. The lawsuit is often referred to as a “case,” and the two terms can be used interchangeably.
A lawsuit also differs from a claim because in a lawsuit, a judge oversees the case and a jury may decide the important issues. In a claim, there is no judge or neutral third-party to oversee the process. A lawsuit can also result in an appeal, where one side or the other can ask a higher court to review some of the decisions made by the judge or jury. The appellate court can confirm the decision reached by the judge or jury, can reverse the decision made or can order a new trial on all or some of the issues. The lawsuit and appeal process can take a number of years to reach a conclusion.
Finally, a claim and a lawsuit are different because there really is very little risk to someone in bringing a claim, while there is risk in filing a lawsuit. Bringing a claim doesn’t usually cost anything, and if it is denied, there is virtually no risk. On the other hand, a lawsuit costs money to file, and if the case is lost in court, the party bringing the lawsuit can be responsible, in certain types of cases, for the defendant’s attorney’s fees and costs. These fees and costs can be tens of thousands of dollars or more, resulting in real risk to the party filing the lawsuit.