Business Litigation – An Overview
When considering litigation, a business owner should be aware of his or her options. In addition to the courtroom, there are other forums that might be appropriate, depending on the specific needs of the business. Alternative dispute resolution (ADR), described below, may be a desirable alternative to litigation or, if the cause of action is of an eligible size, small-claims court may be another venue for an owner to consider. Class actions may also be utilized by a business in certain circumstances. Additionally, business owners must understand the basic features of class actions, in the event that they are named as defendants.
A business contemplating bringing or defending a lawsuit would be well served by consulting with a seasoned trial attorney to better understand all of the legal options.
There are many steps that a litigant must follow when pursuing a judicial resolution to an issue. The civil litigation process is relatively uniform and is controlled by federal or state court rules. The process itself involves a considerable volume of work, whether or not the case actually goes to trial. Required tasks include everything from filing an initial pleading such as a complaint, subsequent pleadings such as an answer or possibly counterclaims or third-party actions, to pursuing an appeal if the judgment is found to be unsatisfactory. The steps that are usually involved in litigation are:
- Filing of an initial pleading and response
- Motions (requests that a judge do something like allow specific evidence)
- Discovery including depositions and interrogatories
- Pretrial conferences to organize how the trial will proceed
Business owners should be aware of small-claims court, a more informal court that deals with relatively minor lawsuits concerning everything from nuisance charges to minor money disputes. Small-claims court eligibility varies from jurisdiction to jurisdiction. Generally, it is the first place a litigant will go when there is a business issue involving small monetary damages.
A class action involves one or a couple of representative plaintiffs pursuing litigation on behalf of a larger group of people similarly aggrieved. The cause of action could be about anything from toxic-waste disposal to securities fraud. The fundamental purpose of a class action is to combine similarly situated litigants with similar causes of action, thereby gaining efficiency by consolidating many similar cases into one large case.
Alternative Dispute Resolution (ADR)
Alternative dispute resolution is a litigation alternative that includes both arbitration and mediation. Arbitration is a process that is less formal than a trial. It is generally cheaper and has fewer formal procedural rules; however, it also has limitations not present in courtroom litigation. Mediation is a more informal process than arbitration, and is facilitated by a neutral third party, a trained mediator, who hears both sides of a dispute and then attempts to reach a resolution through mutual compromise. Businesses use both of these methods of conflict resolution to reduce costs and time and avoid litigation.
When a business owner is confronted with an issue that may involve litigation, he or she should be aware of the different forums and alternatives that will best serve the specific needs of his or her company. If you are faced with a dispute involving your business, it is recommended that you understand all of your legal options. A business attorney would be an excellent resource for this information.