On being sued
On being sued
a personal story from a long-time member of a well-established Cohousing community
Unfortunately, in my opinion, we live in a litigious society that encourages people to ‘go to court’ as the best way to resolve differences. It can be VERY difficult if a member or former member sues your community. It tends to drag lots of community members into very stressful situations, like giving depositions, etc. It can also be very costly, unless you have insurance that covers the legal costs and potential settlements.
On Formal, Written Agreements
One reason some communities have embraced formalized agreements and well-documented structures is in response to litigation from former members – who may leave disappointed and angry. When you are sued, its much easier to get frivolous cases dismissed if there is clear, written documentation of agreements that the former member has signed or was recorded as consenting to in a meeting that has accurate minutes. When we were sued, it took a long time to dig up all the relevant documents.
Many communities pay for special insurance to cover litigation. This coverage is often rolled into broader insurance policies which insurance companies sell as packages to condominium organizations.
Having liability insurance saved our cohousing community a LOT of money when we were (unsuccessfully) sued.
Our insurance company covered every cent of legal fees, over the years that the litigation continued through appeals, etc. The main costs to the community were the emotional costs and lost income as people dealt with attending depositions, court sessions, discussions with our legal counsel, etc. It was one big pain in the ass
All of our members are on the Board of Directors… so every other member of the community was sued by this disgruntled former member – both our membership and the insurance company saw the suit as frivolous, but it sure consumed a lot of time/money. Our insurance company paid all the legal fees for about 3 years… including attending many meetings, taking depositions, writing briefs, etc, etc, etc.. If I recall correctly, the total cost for that added coverage was about $200 per year on top of our general insurance policy (many thousands of dollars).
Our insurance company covered every cent of legal fees, over the years that the litigation continued through appeals, etc. We believe the liability insurance saved us many tens of thousands of dollars.
Other Costs to Your Community
The main costs to our community from being sued were the emotional and lost income as people dealt with attending depositions, court sessions, discussions with our legal counsel, etc. It was a real pain.
Part of what added to our pain was that the person who sued us took his anger to the public forum of Cohousing-L. Our lawyers said that we should not respond in any way, so several of us watched as hundreds of Cohousers kept seeing our community’s name written about in anger – and we watched, as complete strangers criticized us based on his words alone. It really hurt.