Common misconceptions about business litigation

On Behalf of | May 6, 2023 | Business Litigation |

Most business owners and executives, much like the general public, would prefer to stay out of the courtroom whenever possible. Sometimes, even those who would benefit from having a judge intervene on their behalf in a business dispute will put off taking a matter to court because they have heard inaccurate information about the litigation process and would prefer to avoid it if at all possible.

Misconceptions about business litigation prevent many people from making use of the protections available to them and from holding other parties accountable for their failures or misconduct. As a result, entrepreneurs and executives who believe the misconceptions below might avoid using the legal system to their benefit during a business dispute. These are some of the most common business misconceptions that affect those who could potentially benefit from pursuing litigation.

Lawsuits lead to financial devastation

Litigation can be costly, especially in complex, high-impact cases. However, the average business dispute that might go to court, like a disagreement among shareholders or an employee violating the restrictive covenants in their employment contract, likely won’t require weeks of complex litigation to resolve.

Even when both sides of the argument need to present a case to a judge, the full financial impact of what led to the litigation might be far more than the total costs to resolve the matter in court. Of course, in many cases, settling will be cheaper than litigating.

Litigation damages a business’s reputation

Executives and business owners often worry that they will have trouble getting new clients or hiring new Talent if they take someone to court to enforce a contract. The possibility of having the dispute details made public often concerns those involved in the operations of a company.

Many business lawsuits actually settle, possibly after a mediation session that leads to the amicable and confidential resolution of the matter. Even when cases go to court, civil claims involving local businesses rarely draw the attention of the news media for social media users.

Business litigation takes too long to resolve

In certain, time-sensitive cases, waiting for a hearing in civil court can potentially put the plaintiff at risk of losses. Given that many pending business lawsuits settle, it may not be necessary to wait for a hearing in court to finally resolve the matter. Additionally, businesses can plan to protect themselves while waiting and still take action to hold the other party accountable.

In some cases, initiating business litigation may be the only means of resolving a dispute or recouping business losses. Seeking legal guidance to better understand when to pursue a matter in civil court may help executives and business owners to more effectively resolve disputes.