What are the advantages and disadvantages of business litigation?
Any type of dispute can be a stressful and worrisome time for a business, particularly when you may lack any expertise on the subject. Before embarking on a potentially lengthy litigation journey, it’s important to consider the advantages and disadvantages of litigation before you start any legal proceedings. It is also advisable that you work alongside experienced litigation lawyers to ensure you have the best chance of a positive end result. So, what are the possible positive and negative consequences of litigation for businesses during dispute resolution?
What is litigation?
Firstly, it’s imperative to understand what litigation is and where you feel litigation is the only way to resolve an issue or dispute. Essentially, litigation is the process of taking a dispute to court if the relevant parties cannot come to an agreed outcome. It is usually a long and arduous process that requires evidence to be presented throughout. Cases that are typically resolved through litigation include commercial disputes, such as a breach of contract, or employment disputes, which can include wrongful dismissal.
Advantages
Whilst there are ways for parties to sort out their differences and reduce costs, this isn’t always possible. Mediation can be effective at settling conflicts but litigation is often the most efficient when no alternative solution is available.
Public record
Since litigation takes place through the courts, there is usually a public record of the procedures and judgement. This can be highly beneficial for quelling untrue rumours or inaccurate details and can prevent your business’s reputation from taking any damage. By setting the record straight, other businesses will see that you are a force to be reckoned with and will be discouraged from taking legal action in the future.
Reduced costs
Although litigation may seem like an expensive option given the period of time a dispute can last, it can surprisingly be a more cost-effective solution, particularly if the issue is on a smaller scale and easily resolvable. With litigation, there is also a legally-binding resolution unlike other dispute-settling methods like Alternative Dispute Resolution (ADR), which are initially cheaper but can still end up in court and cost more than expected.
Disadvantages
Regardless of the severity of the dispute, litigation can be an emotional and stressful encounter and the outcome is never certain until the judge gives their verdict. You are also never sure how long a case will last, including the overall costs resulting from this – this is why finding a qualified team of professionals to assist you is crucial.
Backlog of cases
There are always a large number of cases waiting to have their day in court in the UK, which leads to a huge backlog. Regardless of having a date set, it could still be many months later that the case is settled. Factor in regular postponements and rescheduling and the process becomes both emotionally and financially taxing. This is why alternative forms of resolution are sometimes considered, like ADR, where cases can be settled more quickly.
Can damage relationships
Pursuing a case through the courts for any dispute will likely cause rifts and damage to relationships, more so if the trial is not resolved quickly. After the trial, the parties may never work together again or experience issues with other businesses or suppliers as a result. It’s important to note that professional and personal relationships are a challenge to repair and maintain once legal proceedings begin, so pick and choose your battles carefully.
