Litigation Usually Isn't the Solution But Sometimes It Totally IsWin or lose, your attorney is costing you hundreds of dollars an hour.
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Litigationis often the first impulse when someone takes an action against your business interests, but it isn't always the right approach.
When a business partner, client, supplier or purchaser does something that you believe is aviolation of your contractwith that company or individual, or that creates a significant challenge for your business in some way, it's natural to want to put a stop to it in a decisive manner.Filing a lawsuitseems to be the "civilized" way to do that in today's society.
But more often than not, both parties walk away from the courtroom disappointed and frustrated with only empty bank accounts to show for it. While a lawsuit might seem the way to resolve a business dispute, the conclusion is seldom as satisfying as filing the suit in the first place. In fact, there's almost always a better way to resolve disagreements between the parties, even when the other party is clearly in the wrong. Here are a few reasons why you might want to avoid litigation as a means of resolving business disputes.
It's expensive.
Civil litigation of any kind is costly. A2010 surveyof Fortune 200 companies with lawsuits that cost over $250,000 found that litigation costs for major business cases rose 78 percent between 2000 and 2008, measured as a percentage of company revenue.
相同的是true for small businesses, too. Attorneys with experience in business litigation bill at hourly rates up to$1,000 or morefor large firm partners located in big cities.
成本和律师费用只是一个例子。的re are also often exorbitant fees to retain experts, such as forensic accountants, necessary to prove your case. You'll probably have to obtain depositions of various individuals related to your case. And you'll have to pay these costs before you recoup a dime of the losses that you're seeking to recover in your case.
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It's mentally draining.
Litigation is emotionally and mentally taxing for any party to it. You can't just turn it over to your lawyer. Rather, you'll have to help build your case.
Preparing for trialusually lasts for months and requires the active participation of key officers and employees in a business dispute between two companies. You'll lose not only your own time but also that of important employees. This means those resources aren't available for the other important aspects of your life.
Sadly, it's usually family and other personal relationships that take the hit, which can cause an entirely new set of anxieties and problems.
It's (usually) a matter of public record.
Litigation often airs everyone's dirty laundry. That's because before the actual trial, parties engage in a long, drawn-out process called "discovery." In discovery, both parties get to dig into each other's history and affairs with a fairly broad set of parameters outlining the areas that can be inquired into.
Discovery is believed by many legal experts to be a top reason why theNFL and Colin Kaepernick settledtheir high profile collusion case earlier than expected.
Most documents filed with the court become a part of a public record. Through freedom of information laws, anyone can request and obtain copies of those documents, unless the court has deemed them so sensitive that they should remain under seal. However, that protection is the exception, not the rule.
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It never guarantees a favorable outcome.
Litigation often "tells" a different story than the one you're familiar with. For example, most people are familiar with the McDonald's hot coffee suit, where a woman drove away from the restaurant with an open cup of coffee between her legs and was burned when the cup inevitably spilled. She ultimately won millions of dollars.
Except that's not at all what happened in the case. The woman was a passenger; the car was parked; she suffered second- and third-degree burns that required multiple skin graft surgeries; and the company had alreadysettled more than 700 scalding claims related to their coffee, which they served as much as 30 degrees Fahrenheit hotter than other restaurants. Moreover, the plaintiff (the injured woman) only sued because the restaurant refused to pay her medical bills of $99,000, which was her only request. The jury awarded her $2.7 million in punitive damages.
的moral of this story is that what most people remember is not necessarily what actually happened. That can work for or against you, but it's largely out of your control along with the very real possibility that you'll go through all this only to lose the case.
Related:Why Your New Business Needs a Lawyer Yesterday
Sometimes, it's required.
With all that being said, there is one important exception and that's in circumstances where youmustlitigate to protect your interests. A major example is IP litigation, where if you don't sue to protect your rights you may lose them altogether.
In other cases, however, it pays to investigate other methods of resolving your business disagreements. Ask your attorney about informal mediation or arbitration as a way of avoiding the high cost of litigation.
