Handling commercial litigation: 3 ideas that won’t impact your revenue
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International opinion often suggests that the US has a litigious culture. Some estimates suggest that 40 million claims are filed annually in America. While many are frivolous, some have the capacity to bring financial and reputational ruin to businesses.
Commercial litigation can be a significant financial drain for firms, especially those without substantial resources. Following through on legal proceedings can be expensive and all-consuming, resulting in revenue losses that persist over the years.
If you find yourself in the thick of commercial litigation, consider one (or more) of these strategies to buy yourself some padding from financial loss.
1. Stay out of court: Alternative methods to resolve disputes
One of the biggest risks (and money drainers) of commercial litigation is the possibility of a stretched-out courtroom battle. It can affect operations, lower your employees’ morale, and generally dampen business as usual.
Whenever possible, alternative methods to address disputes can be relatively budget-friendly. The two most common approaches are mediation and arbitration, both of which involve a neutral third party acting as a facilitator.
Mediation takes a more conversational approach in its attempt to resolve the issue through consensus, rather than order. In contrast, arbitration tends to be more formal, with binding outcomes.
The International Bar Association notes that arbitration can still be preferable to a court procedure, as both parties have the flexibility of choosing the right arbitrator. This individual is likely to be more informed on the particular subject matter than a generalist judge. Moreover, the proceedings can be much faster.
2. Seeking early case assessment from experienced counsel
In corporate litigation matters, preparing and acting early can save you a substantial sum, as well as potentially your business’s reputation. Early case assessment allows you to recognize the risks and outcomes of the situation. You can begin planning solutions before matters become serious.
For example, the Tennessee business tax refund law recently met with opposition from the state’s Coalition for Open Government. Their demand is that the refund lists should state the amounts that businesses have received more specifically, instead of using ranges like ‘above $10,000.’
Some senators, such as Dawn White from R-Murfreesboro, have declared a conflict of interest with the tax rebates bill. The conflict involves TwelveStone Health Partners, a pharmaceutical company established in 2016, which recently received a tax refund of over $10,000.
For companies facing similar legal challenges, attorneys in Murfreesboro, TN can conduct an early case evaluation by gathering and analyzing relevant data from electronic and other sources.
Starting this process as soon as the trigger event occurs can be a protective strategy for your business. According to Hudson, Reed & Christiansen, PLLC, companies should consider seeking full-service support from established professionals. These teams will understand the local dynamics better due to their longer years of operation.
3. Litigation financing: Eliciting support for funds
Another viable approach to safeguarding your business against financial loss during litigation is seeking external funding. This strategy requires you to rope in a third-party funder who will share the legal costs for a portion of the recovery.
The most significant advantage is that your capital is not stuck in legal costs. You can continue to use it for core business operations since the litigation finances are handled externally.
It works especially well if your business is still a startup or an SME (Small and Medium Enterprises). Unexpected legal costs can be challenging for such organizations to arrange.
Moreover, no funder is likely to be on board unless they are convinced the case is strong. So, you will have validation for the proceedings. It strengthens your position and provides you with a trustworthy opinion of a third party that has conducted thorough research and investigation.
If you plan to adopt this route, be careful of possible changes in the future. The Big Beautiful Tax Bill has proposed a 40.8% excise tax on profits of litigation funding. What’s more, it was suggested that there would be no way to offset this amount.
In July 2025, this proposal was not included in the final text. Reuters reported that the proposed tax on litigation proceeds was deemed to violate budget reconciliation rules. Many stakeholders also opined that it would hamper access to justice.
Even so, there’s no certainty that this will not change in the future. Hence, caution is necessary.
The above strategies can support you during the exhausting, often prolonged process of commercial litigation. Consider adopting them as part of your routine monitoring for legal challenges. The business world in today’s turbulent society can spring up surprises at any point.
It is also worthwhile to seek professional help even if you have an in-house legal team, as some cases require expertise across the board. The stronger you build your case, the greater the chances of emerging unscathed, financially and otherwise.