Lobb & Plewe Attorneys At Law

Four tips for business owners facing potential litigation

When your business interests are threatened by the prospect of litigation, you need to know what to do in order to protect your investment. We have seen many companies who failed to realize the impact that litigation has upon a business's day-to-day operations, resulting in significant harm that is difficult to overcome.

We wanted to take a few moments to discuss some of the necessary things that you should do in the event that you or your company encounters the threat of a potential lawsuit. Taking these steps now can pay huge dividends later.

Get the big picture as soon as possible

Many business owners think they can work out a complex problem without getting the courts involved. They try to bargain with the other side involved in the case, not realizing that they are making their situation worse. They make concessions that their opponents may use against them later in the case.

If you think that your dispute may lead to litigation, speak to an experienced business law attorney. Getting an attorney involved in a dispute tells the other side that you are serious about your position, and that you should be taken seriously. We can offer specific guidance and recommend specific action that could favorably resolve the dispute quickly with minimum expense. If the matter cannot get resolved quickly, we can ensure that your rights are protected and you are put in the best position possible if litigation becomes necessary.

Gather and preserve Evidence

Gather, organize, and preserve relevant emails, contracts, and other documents. This will help your attorney to quickly understand the specific situation, and find the specific facts that will matter the most.

Another crucial aspect is the duty to preserve evidence. Destruction of evidence, even if by accident (such as automatic deletion policies) can lead to severe consequences if the dispute proceeds to litigation. This means that you may need to suspend deletion or shredding policies. An experienced business attorney can provide needed advice on this issue.

Tender claim to your insurance carrier

If you have insurance, you may have coverage for a claim against you. Depending on the policy, coverage can include expenses for attorneys, and even payment on the actual claim. It is vital to inform the carrier as soon as possible of a claim to maximize your coverage. Experienced business attorneys can review insurance policies and advise regarding possible coverage.

Think about options besides litigation

If you know there are issues that will remain problematic between the parties, you may wish to pursue other ways to resolve your case besides going to court. You could try mediating the dispute, looking for any common ground to eliminate some or all of the reasons for the dispute. This can give both sides more control over the eventual outcome of the matter, and help control costs that often come with lengthy litigation.

In some cases, the dispute may be required to go to arbitration. Arbitration is very similar to litigation, but in many cases, is less formal. In arbitration, an independent third party or parties makes a final, binding decision in the matter.

Whether before or after litigation, the vast majority of disputes ultimately end in settlement. An experienced business attorney can ensure that a settlement is memorialized in a written agreement that clearly defines the parties' rights and responsibilities going forward. Settlements without such agreements are particularly prone to further disputes on the same issues.

Regardless of whether your case is headed to litigation, mediation or arbitration, it is essential that you take the time to protect the future of your company. Failing to deal with these issues in a timely manner can only increase the costs and consequences that can accompany an unfavorable result in your case.

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