Any successful businessman or woman will tell you for a fact that running a business without taking into account business litigation basics is preparing for disaster. You simply have to know what to do should a rival threaten you with a lawsuit or gains an unfair competitive advantage. Things could get serious with intellectual property violations from your competitor.
All these setbacks fall within business litigation. The good thing about the said basics is the fact that you do not have to go to law school to understand them. The first step is to hire an in house attorney to take you through the basics. You can then retain the attorney under a retainer to represent you in court should the need arise.
What is business litigation?
In the simplest terms possible, business litigation is a special type of litigation that arises out of business and commercial relationships. This can be anything including a claims against a rival company, a direct competitor, a government entity, a group or an individual.
Note that unlike other forms of litigation, business litigation is usually complex. It calls for a lawyers understanding of his client’s business. Anything other than that may mean the lawyer is incompetent or not good for the case.
It is easy to understand why business litigation is very important. First off, lawsuits are public records. That simply means that they create sensitive public relation issues. The next thing one knows is either a good reputation arising out of a successful lawsuit or a soiled reputation as a result of a failed lawsuit. It won’t take long before losses come flooding in in the event of the latter outcome. Then there is the fact that effective handling of a dispute portrays any business as responsible and in control of its affairs.
Different categories of business litigation
Before exploring different types of business litigation, it is important that business litigation is not a dispute resolution mechanism on its own. The whole process does not have to end in court. In fact, successful business litigation cases hardly end in court. They may start there but end in successful out of court settlements.
That depends on a number of things though. For instance, your lawyer must be good at mediation. He must play the hardball when the need to take a tough stand arises. He must be vocal. He must be sharp. He must be smart.
Breach of contract is perhaps the most common type of business litigation. There is a contract between Company A and Company B for supply of goods. Company A pays everything on time as per the contract but Company B fails to supply goods on time or in the right quantity as per the agreement. The right course of action for Company A would be to sue company B for breach of duty and seek damages for losses incurred. This is a typical scenario in the simplest form. Real business litigation cases are complex and can sometimes take a long time to resolve.
Other forms of business litigation include breach of fiduciary duty, regulatory investigations, insurance disputes, partnership disputes and trade secret disputes. Each category presents its challenges. Each category may also call for an experienced attorney in the area. That is why hiring competent and experienced attorneys in business litigation is extremely important.
Preparing for business litigation
The first step is to hire a business litigation attorney. Remember that you have to do this not because a suit has been filed but as a way or preparing for suits. So like already mentioned, always have an in house attorney. You might have to hire two attorneys depending on the nature of your business. For instance, insurance businesses always attract lawsuits in high numbers almost every month. Your best bet here would be to hire an attorney.
With a lawyer on board, you can sit back and respond to lawsuits through the attorney. Do not, at any point respond to a lawsuit on your own or without your lawyer’s input. This could lead you in further trouble. Avoid too, getting into business agreements without your lawyers input. That is because nearly all business agreements attract stiff legal consequences in the event of a breach. Agreements that involve real estate conveyance, mergers and acquisitions, raising of share capital and issuing of debentures should never proceed without a lawyer’s input.
Briefing your lawyer
This is extremely important. Your lawyer should understand the nature of your business so as to effectively and competently represent you. This is where you stand out as the expert and the lawyer stands out as a novice. Take him through your company’s standard procedures, dispute resolution mechanisms and anything else he may need to know.
You do not have to worry about letting out important business secrets. Whatever you share with your lawyer, will be protected with the utmost confidentiality, which protects anything a client tells his or her advocate.