Avoiding Business Litigation and Being Prepared for It at the Same Time

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By Tony Crighton

Business litigation can be a huge problem for businesses because the process of taking a case to court, or being dragged to court by another party, can be a costly adventure. More so, it unnecessarily complicates a problem which maybe could have been solved amicably outside the court.

It is therefore a good idea to be aware of some things you can do to try and avoid litigation, while at the same time be prepared for it, if it is unavoidable.

Proactively Identify Problems

The first thing that you should keep in mind is that you need to try and identify a problem before it escalates into something big that could land you in court. If you feel like there is a potential issue that may or may not arise between you and a business partner, it is perhaps better to proactively address it, instead of hoping that nothing negative comes out of it, to the point where it leads to litigation. This works whether it is an internal issue within the company, or with an external business partner.

So if for instance you become aware of something ontowards going on between employees of your business, then it is important to alert HR so that they can look for a solution to it before it becomes something much bigger, like an aggrieved employee filing some employment related lawsuit against the company.

On the flip side, an issue with an external client can sometimes be minimized by simply communicating honestly with them about what may or may not be an issue at that point in time, but what you are simply trying to do is to get on top of things to make sure that it does not become a (big) problem in future.

Hiring the Most Suitable Lawyer

Hiring a good business attorney is the one thing you can do that can simultaneously help you avoid litigation and prepare for it at the same time. Hiring the right lawyer can make all the difference in the world for your business for many reasons, but it is not always an easy task to find and hire this lawyer.

One way in which an attorney can help you avoid a lawsuit is by speaking to the legal team of the other side and getting that other team to convince their client that a lawsuit is not in their best interest, but rather, an amicable, or out of court settlement is.

If there is one thing that all lawyers know, it is that lawsuits are expensive and time consuming, and where possible, practically all lawyers would like to avoid going to court. Therefore, chances are high that both lawyers or legal teams will be more inclined to get their clients to settle out of court.

Conversely, oftentimes a lawsuit is simply unavoidable either from the standpoint of you being a litigant or a defendant. Either way, once it is a definite given that you are definitely going to court, then you are likewise going to want to get a lawyer on the case as soon as possible.

Put Everything in Writing

Another thing to keep in mind with pretty much every business transaction, is to document everything. Even though some verbal contracts or agreements might often be found to be legally binding by a court of law, it is best to not take the chance and to rather make sure to cover your bases by having every business transaction in writing, as you can never tell when such documentation will either come to your aid as a defendant in a court case, or in helping you win a case as a litigant.

Going further with documenting everything, is to ensure that the best practice of backing up everything should also be practiced, to ensure that a document that might prove to be vital to your business in a lawsuit, does not get lost or destroyed.

Having things in writing allows all parties have a reference to the original agreement and thus allows them better keep to the terms specified in the agreement. Likewise, having things in writing might also deter parties to a business transaction from breaking away from the terms of that transaction, since the document exists in black and white stipulating all the terms, and possibly, the consequences of a breach of those terms.

Communicate

Communication is key for practically everything in life, including running a business. It is important to communicate with your business partners so that you can potentially avoid problems creeping into your business relationship through miscommunication, or a lack of communication.

Very similar to the previously stated point of proactively identifying problems before they arise or get bigger, communicating with your business partners can go a long way in drastically reducing the potential for litigation between business partners.

The flip side of communication however, is that if it does not succeed in preventing a lawsuit between the parties involved, then chances are that, and your lawyer would be in a better position to advice if this is best in your specific case, it might be better to cease all forms of communication so as not to jeopardize your case in court, as oftentimes, some things you say about a case, “may be used against you in a court of law.”

Think of Others

One thing that many people often forget is the ‘need’ to put themselves in the shoes of the other party. Having this type of thinking can very often resolve conflicts even before they arise, and just as importantly help reduce the effects of these conflicts if they do come to the fore.

Seeing things from the perspective of the other party will usually allow you think objectively and selflessly about the situation, and consequently are more likely to seek a win-win situation, instead of trying to find a zero-sum situation, in which you win and the other party loses.

The same thinking of course, applies to the other party to the conflict in this business transaction. And where all parties think in this manner, then the chances of them engaging in litigation becomes all the more lower. But if all this fails then at least, you will be sure to have the peace of mind that you did everything in your power to amicably resolve the issue.

Tony Crighton is a practicing New York business attorney at the law firm of Small Business Attorney NYC, who are specialists in all legal matters related to business law. He has been a practicing attorney for over 15 years and has a diverse and broad range of experience. Connect with @small_biz_law on Twitter.

Litigation stock photo by Zolnierek/Shutterstock

The post Avoiding Business Litigation and Being Prepared for It at the Same Time appeared first on SmBizDaily.

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