You Can’t Stop the Lawsuit. But You Can Stop It Early.

There is one reality every ERISA advisor and plan committee member needs to understand:

There is nothing a plan sponsor can do to prevent a lawsuit from being filed.

Plaintiffs’ firms do not need proof of wrongdoing. They need public data and a plausible theory. Form 5500 filings are mined every year. Recordkeeping fees are calculated per participant. Share classes are compared. Investment menus are reviewed online. Many complaints quote directly from publicly available filings.

While it is reasonable to set a goal of avoiding a lawsuit, the plan fiduciaries are not in complete control of that option. The goal that is within control is positioning the plan to shut down any lawsuit early.

The First Real Battleground: Motion to Dismiss

Once a complaint is filed, the case moves immediately to the Motion to Dismiss stage. This is a critical early checkpoint in ERISA litigation.

At this stage, the court assumes the plaintiff’s allegations are true. The judge is not deciding whether fiduciaries acted prudently. The only question is whether the complaint alleges enough plausible facts to move forward.

If the case survives this stage, it does not mean the committee breached its duties. It simply means the case proceeds to discovery—and that is where things become far more expensive and disruptive.

• EDITOR’S NOTE: This article is part of our Q1 2026 “How Not to Get Sued” Deep Dive. All published coverage to date can be found here.

Two recent appellate decisions highlight how much this stage matters.

The takeaway is not alarm. It is realism. The pleading landscape is shifting. Some claims face tighter scrutiny. Others move forward more easily.

What determines whether a case ends here is not brilliance in the courtroom. Instead, in many cases, it can be the quality of the fiduciary record built years before the complaint was filed.

Dismissal with prejudice ends the case. But courts often dismiss without prejudice first, allowing plaintiffs to amend. Multiple amended complaints are common. It is not unusual for 12 to 24 months to pass before the pleading stage is fully resolved.

During that time, defense counsel is engaged, insurers are notified, and committee members are often named individually.

If it Survives: Discovery is the Inflection Point

If the case survives dismissal, it enters discovery. This is where litigation shifts from legal theory to operational reality.

Discovery typically involves years of emails, minutes, benchmarking studies, fee analyses, contracts, and communication with advisors and recordkeepers. Experts are retained. Service providers may be subpoenaed.

Committee members may sit for depositions lasting six to eight hours under oath, asked to explain decisions made five or six years earlier:

It can be less expensive to settle than to win. That economic reality drives many cases toward resolution.

• Why was this share class retained?
• When was the last RFP conducted?
• Did you personally review the fee disclosures?

Memory fades. Documentation does not.

Discovery is also where costs accelerate. Defense expenses can easily reach seven figures before trial is contemplated. Fiduciary liability insurance becomes essential, and insurers often weigh the cost of continued litigation against settlement. It can be less expensive to settle than to win. That economic reality drives many cases toward resolution.

What Comes After

After discovery, defendants may seek summary judgment, arguing that even viewing the evidence in the light most favorable to the plaintiff, no genuine dispute of material fact exists. If the court agrees, the case can be resolved without the expense and uncertainty of trial.

Most resolve through settlement. Very few proceed to a full bench trial. Even without trial, the time, cost, and distraction can span years.

The Strategic Question

In my typical engagement as an expert witness, I spend 60 to 100 hours evaluating fiduciary process. Sometimes more. I review years of minutes, benchmarking reports, service agreements, and committee materials. I look for consistency. I look for deliberation. I look for alignment between words and actions.

So here is the better question:

If an expert were engaged tomorrow and given 100 hours to review your last six years of fiduciary process, what would they find?

• Consistent benchmarking?
• Thoughtful analysis?
• Clear rationale?
• Alignment between plan terms and administration?

• Clear documentation of the process in meeting minutes?

You cannot prevent a lawsuit from being filed. But you can control what the record shows when it matters most.

Strong fiduciary governance is not merely compliance. It is risk management. It is defense strategy. And in today’s environment, it may be the single most important investment a committee makes.

SEE ALSO:

• How Not to Get Sued: A 401(k) Specialist Deep Dive
• Curtailing ERISA Litigation and Understanding Best Practices with Bonnie Treichel
• How Not to Get Sued: Lessons from ERISA Expert Witness Eric Dyson