In the business world, it is inevitable that disputes will arise. This is part and parcel of every competitive industry, but these disputes can be costly to your company if they are not handled efficiently. Litigation may seem like an intimidating process, but it has many advantages compared to other dispute resolution options. Choosing litigation may help to save you money, put pressure on the other side to come to the negotiating table, and ultimately provide the best chance of a positive outcome.
In this article, will discuss what litigation entails and why it could be beneficial for you and your business!
What are the Most Common Business Disputes?
Most business disputes are either contract law, employment law, or tort (property) law. Contract disputes happen when a party to the contract believes they haven’t been given their contractual rights. Employment law disputes involve employees who may have not been paid for working hours or had their benefits denied; these cases often end up in court because employers know that it is cheaper to settle than risk losing and having to pay legal fees as well as damages. Tort (property)law involves property damage caused by one of the parties.
The other two types of dispute you will find most commonly are bankruptcy litigation and civil procedure litigation. Bankruptcy proceedings are often overseen by a bankruptcy court, an administrative agency that deals with private bankruptcies and reorganizations. Civil procedure litigation is any kind of lawsuit not covered under the other three types listed above (contracts, employment law or property).
What Problems Can Disputes Cause Your Business?
Disputes can cause significant problems for businesses. They can affect customer confidence, divert resources from essential areas of your business, and bring manufacturing or supply lines to a halt. This is why it is so important that disputes are dealt with in a timely and effective fashion before they can irreversible damage to your business.
How Can Businesses Avoid Disputes?
There are many ways that your business can avoid disputes. First of all, it is important that you always have a clear contract with your suppliers, employees and customers. All parties should review exactly what they want from these relationships every year or so in case things change significantly. If your or any of the other parties violate the agreement then it is better to take care of the issue before it becomes too large. This will save you time and money over the long run because you won’t be spending resources litigating issues that could have been resolved early on.
What is Litigation?
Litigation is a process in which two parties disagree about the lawfulness of an issue and submit their dispute to the court. In litigation, one party is usually arguing that they are correct regarding a specific set of facts or legal interpretation while the other side disagrees with them. A judge hears both arguments and decides who was right based on what he/she finds most persuasive about the evidence. The judge then issues a legally binding decision that will govern the resolution of the dispute.
What are the Main Advantages of Litigation?
There are various advantages of litigation over trying to resolve a business dispute yourself, or through one of the other resolution processes. The main benefits are:
Everything is on Public Record
In litigation, everything is a matter of public record. This means that all evidence and facts are available to the general public in some form or another. The court rulings can also be accessed through judicial websites for anyone who wants to research them further. This is beneficial to your business because you are able to use these resources when you have disputes with other parties. You can also take a look at the rulings of previous cases, which may be helpful in your own case.
This contrasts greatly with arbitration and mediation where everything is confidential unless otherwise stated by law or agreements made between those involved in the dispute resolution process. With this secrecy there is no opportunity for public record, so it’s difficult to know what happened during an agreement if something were to go wrong down the line.
The Court Can Ensure Cooperation
In a lawsuit, the court will ensure that the other party has to cooperate. This means they have to show up for hearings and submit documents in order to present their version of events. If they attempt to dodge you or fail to show up in court, you can go to the judge and ask for a default judgment. If they refuse to present documents, you can subpoena them through the court system. All of this means that you are able to make sure your opponent presents their complete story, which cannot be done in arbitration or mediation.
You Can Use Precedent to Support your Case
If there has been a previous case with similar circumstances to your own, then you can use that case as precedent for your own. This is because the court will have decided how it handles disputes in the past. You may be able to apply this decision to help make an argument about what should happen in your current dispute. With mediation or arbitration, however,, precedent is not as important because the mediator or arbitrator decides how to handle each case on a case-by-case basis and isn’t guided by previous judgements.
There are Strict Rules Regarding Evidence
There are many rules and regulations that surround evidence. These include the hearsay rule, which says you can’t use someone else’s statement to prove a fact in court (unless they’re testifying). Similarly, there is the best evidence rule, which requires the most relevant or important testimony be used when making an argument (unless doing so would risk endangering somebody’s reputation).
Furthermore, there is no right of discovery in arbitration and mediation, but it does exist during litigation. This means that if the other party says they don’t have a certain document or piece of evidence when they really do, then after going through all the steps with the court, you will eventually get access to it. In any form of dispute-resolution process without this provision there may not be an opportunity for clear discovery.
Evidence also has to meet certain standards for admissibility before it can be submitted at trial – these standards vary depending on where the case is being heard but typically require clear and convincing proof.
Finally, some types of evidence aren’t permitted in court. For example, jurors are not permitted to hear about religion or politics because opinions on those topics could easily sway their decision-making process. All this means that if you are involved in a dispute, then the evidence you need to prevail will be much easier to collect.
There is the potential for appeals
This means that even if you are initially unsuccessful, you could potentially win on appeal if your argument is strong enough to convince a judge. It is worth noting, however, that the appeals process can also go against you. You may win the original case only to then have the decision reversed when the other side appeals the judgement.
Litigation is Cost-Effective
The cost of litigation is not as expensive when compared to arbitration or mediation. Your main litigation costs will usually only involve the cost of hiring a lawyer which is usually less than the costs associated with arbitration or mediation.
For example, if you hire an arbitrator to mediate your dispute it can cost upwards of £200 per hour for the arbitrator’s time and services. This will be in addition to their administrative fee which is typically 25% of whatever they charge per hour as well as any travel expenses incurred when meeting with the parties involved in mediation. Mediation fees are usually set by what each side agrees on up front but also depend on how much work needs to be done before the actual mediation begins. In contrast, litigation costs are just limited to attorney fees and court filing costs.
Litigation Always Provides a Result
The result of litigation is final and binding (once appeals have been exhausted), and the court will ensure that all parties comply with its ruling. This means that disputes cannot just drag out forever without either party ever getting a satisfactory resolution. In contrast, mediation and arbitration usually result in a settlement, which does not have the same finality as litigation. This means that there is always room for disputes to continue on and drag out without ever reaching an end point.
What are the Potential Downsides of Litigation?
There are some potential downsides to litigation, and it is not the right course of action for every business. One downside is that litigation can bring unwanted public attention to a dispute. Some companies may not want to have their finances revealed publicly, while others may have legitimate concerns about their reputation being damaged. These issues may cause problems for businesses with their customers or partners, and so they may choose arbitration instead of going all out on litigation.
What are the Main Alternatives to Litigation?
To avoid the risks of litigation, two main alternatives to filing a lawsuit are arbitration and mediation. These methods can often be less costly than going through an entire trial and they help businesses stay out of court. When it comes down to deciding between these options or filing a lawsuit, there are many factors that could impact your decision. Here is what you need to know:
Arbitration involves you and the other party coming to an agreement on which rules will be applied to try and settle your differences. Expert arbitrators offer advice, but it’s ultimately up to both sides whether they choose or accept them. These decisions can’t be appealed later because arbitration does not use a court system that allows appeals like litigation does. While it may take longer for disputes to be resolved, there is no need to pay lawyers as all proceedings take place behind closed doors with only those involved present.
The main advantages of arbitration:
- It requires less money than litigation.
- It facilitates quicker resolutions to issues.
- It does not wash dirty laundry in public.
The main disadvantages of arbitration:
- There is no public record of the proceedings.
- Arbitrators may have their own biases or agendas.
Mediation is the process of negotiating a settlement between parties with an impartial mediator. This person will keep both sides focused on finding common ground and resolving issues without having to go through litigation or arbitration proceedings. It can be effective for settling disputes because it is less expensive, quicker, and often more amicable than going to court. A mediator does not offer his opinion about who should win what in a dispute, but rather helps the parties to come up with an agreement that both sides can accept. This means that mediation is often less adversarial and stressful than going to court.
The main advantages of mediation:
- It’s more cost-effective
- It has a quicker resolution time
- No need for expert witnesses or expensive attorneys
The main disadvantages of mediation:
- It is more informal than litigation
- Mediators do not always have specific legal experience.
To Sum Up
Business disputes are very common, and there are very few businesses which make it to the top without some kind of disagreement. The important thing is that the right steps are taken to resolve the dispute in the most time and cost efficient way possible, and in a way which gives the most satisfactory results. Litigation has many advantages over alternative resolution processes, namely that the rulings have the weight of the law behind them. You can see that both alternatives to litigation have their own pros and cons, but each has its benefits depending on perspective. Ultimately, to decide which resolution option one is best for your business, you need to consider what issues are at stake in your dispute, as well as other factors like cost effectiveness, the willingness of the other party to cooperate, and how likely they are to abide by an agreement made through mediation or arbitration. If they are particularly unreasonable, litigation is usually the best course of action.