yes to the first part. the second question is less certain. if they made money from it then you can sue for lost earnings and damage to your reputation, personal damages etc. If they didn't make a commercial release then you cannot sue for loss of earnings. As loss of earnings tends to be the larger part of any financial settlement and with damage to your reputation and personal damages being harder to prove, it is rarely financially effective for you to pursue someone who has not made a commercial release.
That said, unless they acted as a limited company, if found liable then they can lose all their assets. Car, home etc.
The trouble is that it costs a lot to fight effectively (although if you are a member of a musician's union or songwriter's union they often offer legal advice), and it can last a long time (they refuse to pay, they appeal etc.)
But... the damage done to their reputation (personal and professional) can be very far reaching. Should it become known that an infringement has occurred and people are invited to compare the two works, and the dates the works were created etc. then very quickly they will find themselves shunned. People have long memories. Quite soon they find themselves hounded from any community online, comments show up on their band/music pages, they have their songs removed from audio hosts (they don't want to be supporting songs that are in contention unless they have to), their posts on other forums are removed and pretty soon they realise it was NOT worth their while in stealing the song. The result being that any remaining locations where that work can be found they themselves remove it. Songwriters do not like or trust people who misrepresent work. As a result the offender will find it hard to find people to work with, or collaborate with them. The effects last years. I've even seen occasions where a collaboration that went wrong and one of the authors decided to publish under their own name (removing the other's name) (happened on another forum originally) well that one moment in time followed them for years, across forums, site to site, new boards and communities, each time resulting in that member having their posts removed and their reputation damaged, even in some cases being banned. Forum owners in particular must trust members not to infringe on copyright (along with lots of other things like not posting hate topics etc). If they find that they cannot trust the member, they do not believe them to be honest, well simply they do not have time to check all that member's posts, so they realistically cannot allow them to remain an active member. Similarly they cannot trust any of the previous posts by that person so those have to be removed too. Now a work in progress lyric that shows how and when it was developed will help those other webmasters decide to take this action.
It's not just on the internet. Even bands who have a writer who is accused of such things (and yes in this day and age if it is on the net it will leak back to their real world, aint social networking great?) the band can no longer trust the songs that person has written, wondering when they will collectively get hit with a lawsuit... so it threatens their ability to write for that band... or publisher etc. As I said, the possible implications are huge.
Make sense?