What not to do during a business dispute

What not to do during a business dispute

| Feb 9, 2021 | Commercial Law and Litigation

At some point during their operations, most businesses will face some type of dispute. It could be an issue with an unhappy client or customer, or it could involve another business. Whatever the situation, it is important that New Jersey business owners know how to properly handle any resulting lawsuits in a way that will help their company avoid negative outcomes.

When handling any legal matter, knowing what not to do is just as important as knowing what to do. If you make a mistake when handling an important business lawsuit, it could end up costing you and your business significantly. Many heads of organizations feel that litigation that creates an adversarial dynamic is the only path to resolution.

According to the Harvard Business Review*, corporations in the United States have spent more than tens of billions of dollars on litigation per year. While those direct costs are significant, the indirect costs can further impact an enterprise’s bottom line. It is important to note that many disputes can only be settled in the courtroom. However, when a business chooses to pursue litigation, common mistakes can undermine its legal pursuits.

Mistakes to avoid

If you have been through business litigation in the past, you may  feel well seasoned in this arena. However, if it is your first time or if you have not had to deal with such a legal issue in a while, knowing the mistakes to avoid could prove beneficial. Some missteps to watch out for include the following:

  • Not assessing the value of documents: A major mistake during litigation is keeping unnecessary documents or destroying necessary documents. Carefully assessing records and documentation could help you determine what could be critical to your case and what one could take out of context to your detriment.  You are prohibited from destroying any documents as they may be relevant and it may be deemed expoliation of evidence.
  • Not weighing the pros and cons of litigation: Though litigation can certainly help you address a business dispute, you need to determine whether the possible positive outcome is worth the time and effort of going through a trial. All alternatives should be considered including mediation and arbitration.
  • Not practicing patience: Obtaining a positive result in litigation can take a lot of time. If you become impatient with the process, you may end up making hasty decisions that do not benefit you or your company.
  • Not fully understanding the case: Putting in the work to understand what the case involves could help you prepare and determine your best possible courses of action for addressing the matter. Without this information, you may walk into a case without a solid direction or desired outcome.  All key personnel should be well versed in their area of the business and made available to counsel as needed.
  • Not participating in the case: Certainly, you have a lot on your plate as a business owner, but a legal case is not something to take a set-it-and-forget-it approach.  Without offering input, asking questions,  having a goal, or being available to your attorney, the case could turn out far different than what you anticipated.

Each business dispute is different, which is why any business owner would be wise to thoroughly assess the situation and the legal options available. Litigation can often act as a useful avenue for addressing conflict that would otherwise continue to cause problems and possible damages. The Weir Law Firm, LLC has extensive experience with business disputes and litigation and can provide the one-on-one approach your business needs to resolve the dispute whether in or out of the courtroom.

* Source: Harvard Business Review Magazine, “Five Ways to Keep Disputes Out of Court,” published in the January-February 1990 issue.