Threatening a lawsuit can be a powerful negotiation tool—but if you don’t mean it, the consequences can be severe.
While it’s common for businesses, individuals, and attorneys to issue legal warnings, making empty legal threats can backfire legally and financially.
So, what happens if you threaten a lawsuit with no real intention of following through?
Let’s break it down.
Legal Risks of Making Empty Lawsuit Threats
1. Extortion & Coercion (Criminal Charges)
A lawsuit threat becomes criminal extortion if it’s used to force someone into an action for personal gain.
This is especially dangerous if money, favors, or agreements are demanded under false legal pretenses.
Example of Illegal Extortion:
"If you don’t pay me $10,000 by tomorrow, I’ll file a lawsuit and ruin your reputation."
That’s extortion, and it could lead to criminal charges.
What’s Legal?
"If this dispute is not resolved, I may be forced to consider legal action."
A legal warning should be based on facts—not manipulation or intimidation.
2. Defamation (If the Threat Harms Someone’s Reputation)
Publicly making false legal threats—especially on social media, in reviews, or in widely shared emails—could result in defamation lawsuits.
Example of Defamation:
A business falsely claims in a public statement that a competitor will be sued for fraud—even though there’s no legal basis for the claim.
The competitor can sue for defamation because the false lawsuit claim damaged their reputation.
What’s Legal?
"We are exploring legal options regarding this matter."
Legal threats should be made privately and only when they are legitimate.
3. Sanctions & Penalties for Frivolous Legal Threats
Filing a lawsuit that you know is baseless could result in court sanctions—fines for wasting judicial resources.
Many states have anti-SLAPP laws (Strategic Lawsuits Against Public Participation), which penalize lawsuits meant to silence or intimidate others.
Example of an Illegal Threat:
A landlord threatens to sue a tenant for posting a negative but truthful review.
If the case goes to court, the tenant could win—and force the landlord to pay damages under anti-SLAPP laws.
If you threaten a lawsuit, be sure you have a legitimate case.
4. Business & Contractual Violations (Unfair Business Practices)
Using false legal threats to pressure clients, vendors, or competitors can lead to fraud claims, contract disputes, and even consumer protection violations.
Example of an Unfair Business Practice:
A company tells a client they will be sued for breach of contract unless they sign a new, more expensive agreement—even though no breach actually occurred.
This could be considered fraud, misrepresentation, or bad faith negotiations.
What’s Legal?
"If this contract dispute is not resolved, legal action may be necessary."
Legal threats should never be used as a manipulation tactic.
5. Loss of Credibility & Future Legal Leverage
Repeatedly making empty lawsuit threats can damage your credibility.
Over time, opponents will stop taking legal threats seriously, making future negotiations harder.
Example of Lost Legal Credibility:
A business owner threatens to sue every customer who requests a refund.
Eventually, customers ignore the threats, and the business loses legal credibility.
Legal threats should be used strategically—not as a scare tactic.
When Is It LEGAL to Threaten a Lawsuit?
A legal threat is acceptable if:
- You have a legitimate legal claim.
- You communicate the threat professionally and formally.
- You are prepared to follow through with legal action if necessary.
- Your statements are fact-based, not exaggerated or emotional.
Example of a Proper Legal Threat:
"As per our agreement dated [contract date], the amount of [$X] remains unpaid. If we do not receive payment within [X days], we will be forced to explore legal action, including filing a claim in small claims court."
This is a professional and lawful approach—not an empty threat.
Final Takeaway: Only Threaten Legal Action If You Mean It
- Threatening a lawsuit is powerful—but it should never be done lightly.
- If you don’t intend to follow through, the threat can backfire legally and financially.
- False legal threats can lead to:
- Criminal charges (extortion)
- Civil lawsuits (defamation)
- Business penalties (fraud or bad faith claims)
The best approach is to issue a formal demand letter, backed by actual legal grounds.
In law, credibility is everything—and false threats can cost you more than you think.
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