No one starts a business expecting to face legal disputes, but conflicts are inevitable. When facing conflicts over a broken contract or disagreements with a business partner, many legal avenues are available to you. If options like mediation fail, then you may need to consider litigation (i.e., seeking relief through court action or arbitration). Litigation empowers you to resolve disputes and protect your assets and reputation.
How Business Litigation Works
Business litigation is a structured legal process designed to resolve disputes. It typically begins when one party believes another party violated their rights or broke a contractual agreement. The process can involve negotiations, mediation, arbitration, and/or a trial before a judge or jury to determine the outcome.
Some common scenarios requiring business litigation include:
- A supplier failing to deliver goods as agreed in a contract
- A competitor using a trademark without permission, leading to intellectual property disputes
- Disagreements between partners over the management of a company
- Allegations of fraud or misrepresentation in a business deal
In these situations, you may need to pursue litigation to protect your business’s interests.
Common Types of Business Litigation Cases
Here are some of the most common types of cases that business litigators handle.
- Contract disputes: These cases can involve a breach of contract or the need to rescind an agreement due to mistake or fraud (misrepresentation).
- Intellectual property disputes: These cases include conflicts over copyrights, trademarks, trade secrets, and patents.
- Partnership and shareholder disputes: Disagreements among partners or shareholders regarding a business’s management, finances, or direction can lead to litigation.
- Fraud and misrepresentation cases: These occur when a business is accused of deceptive practices or providing false information in a transaction.
- Real estate disputes: These involve conflicts regarding property ownership, easement disputes, profit distributions, and management of the property.
- Partnership disputes: These cases involve conflicts between business partners – often regarding responsibilities (e.g., fiduciary duties), profit distributions, and partnership agreements.
- LLC and LLP disputes: Limited liability companies and limited liability partnerships face disputes like partnerships, including disputes about management responsibilities, minority interest rights, and breaches of fiduciary duty.
- Breach of fiduciary duty: These cases occur when a business leader, partner, trustee or other leader with fiduciary responsibility acts in their own interest instead of the interests of those they are charged with serving.
- Derivative lawsuits: These lawsuits are brought by shareholders on behalf of corporations against executives or board members for mismanagement or wrongdoing.
Litigation can drain your resources and time. Promptly resolving these issues mitigates financial losses and safeguards the business’s reputation.
Business Litigation vs. Commercial Litigation
While “business litigation” and “commercial litigation” are often used interchangeably, they are not the same concept. Business litigation is a broader category that encompasses all disputes related to the operation of a business. This includes internal conflicts, such as partnership disputes, and external issues, like contract breaches.
Commercial litigation focuses on disputes related to commerce and trade, such as sales transactions and supply chain issues. Think of it as a subset of business litigation, dealing with disputes directly connected to business-to-business or business-to-consumer interactions. Frequently, the Commercial Code sets the rules for resolving these disputes – a set of rules that apply to the sales of goods – not all business litigation cases.
By understanding these distinctions, businesses can better identify the appropriate legal recourse for their specific situation and engage attorneys with expertise in the relevant area.
When to Pursue Business Litigation
Business litigation is not always the first step when dealing with disputes, but very often, it is the best option to protect your business. If negotiation or mediation doesn’t lead to a resolution, taking legal action can provide a more structured and definitive way to resolve the dispute.
In cases such as fraud, embezzlement, or theft, going straight to litigation may be the only way to seek justice and protect your business. Legal action can result in accountability and can safeguard your interests in a contract or company.
In some cases, pursuing litigation can discourage similar future disputes by setting a precedent. It can also help you recover losses caused by another party’s actions, ensuring your business isn’t shouldering unnecessary costs.
The Business Litigation Process
The business litigation process typically involves several stages, each designed to resolve the dispute as efficiently and fairly as possible:
- Pre-litigation: This stage involves gathering evidence, hiring legal counsel, and issuing demand letters to the opposing party.
- Filing a lawsuit: If pre-litigation efforts fail, the next step is typically to file an action in the appropriate court or arbitration entity, initiating the formal legal process.
- Discovery phase: During discovery, both parties exchange evidence, documentation, and other relevant information to build their cases. This phase helps attorneys uncover the facts and develop a strategy for the case.
- Negotiation and settlement: In many cases, you will have several opportunities to resolve the lawsuit through negotiations or mediation to avoid the time and expense of a trial.
- Trial and verdict: If settlement efforts are unsuccessful, then the case proceeds to trial, where a judge, jury, or arbitrator hears the evidence and delivers a verdict.
During each stage, you must carefully prepare to achieve the best possible outcome, which is why a business litigation attorney can help.
Role of a Business Litigation Attorney
A business litigation attorney works closely with you to build a strong case. They analyze evidence, pinpoint key legal issues, and create a strategy that aligns with your goals. With their guidance, every step, from filing a lawsuit to attending trial, is handled with expertise.
Many attorneys are also skilled negotiators and resolve disputes without a trial. If a case goes to court, they advocate your interests at every turn. They also help you comply with legal requirements, minimizing the risk of mistakes that could hurt your case. Partnering with an experienced firm increases the likelihood of a successful resolution.
How Klein & Wilson LLP Can Help
At Klein & Wilson, we understand the challenges businesses face when dealing with complex disputes. With our proven experience, we’ve successfully handled even the most intricate business litigation cases, providing our clients with the confidence and support they need. Our tailored legal strategies meet each client’s unique needs.
FAQs About Business Litigation
What Is Business Litigation?
Business litigation is the legal process of filing lawsuits to resolve business disputes, such as contract breaches, intellectual property issues, or partnership disagreements. It helps protect business interests and seeks accountability in conflicts.
When Should I Consider Business Litigation?
You should consider business litigation when other methods, like negotiation or mediation, fail to resolve a dispute. It’s especially necessary if the conflict significantly impacts your finances, reputation, or the integrity of legal agreements.
How Long Does the Business Litigation Process Take?
The timeline for business litigation varies depending on the complexity of the case. While some disputes may settle in a few months, others require a trial can take longer than a year to resolve.
What Are the Costs Associated With Business Litigation?
Costs depend on factors such as the complexity of the case and whether the case goes to trial. While litigation is expensive, legal action may prevent your business from suffering more considerable financial losses.
How Can I Prepare for Business Litigation?
Start by gathering all relevant documents, emails, contracts, and evidence related to the dispute. Prepare a timeline work closely with your attorney to ensure a strong case strategy and comply with all legal deadlines.
What Is the Difference Between Mediation and Litigation?
Mediation is an informal process. A neutral third party will facilitate finding a resolution for both parties. Litigation is a formal process with many rules. You will file a lawsuit and go to trial if negotiations and settlements do not resolve the issue.
What Should I Look for in a Business Litigation Attorney?
To achieve the best outcome for your case, it is imperative that you choose an experienced business litigator–one with years of experience, a track record of winning, and proven experience handling cases like yours.
If you’re facing a business dispute, let us be the partner you can rely on. Contact Klein & Wilson LLP today to learn how we can help safeguard your business and achieve a successful resolution. Fill out our online contact form or call us directly and our team will be happy to help.