No business owner likes to be trifled with, insulted, stiffed, screwed over, or otherwise on the receiving end of bad actions that threaten their company, its reputation, or its bottom line. Filled with frustration over a long overdue invoice, full of righteous indignation about a former employee or competitor stealing trade secrets, or seething in anger about a supplier’s failure to keep their promises, a business owner may be quick to call their lawyer and heatedly direct them to immediately “sue the b*stards.”
But an itchy litigation trigger finger can lead to unintended and undesired consequences if the prospective plaintiff does not understand the realities and risks of commercial lawsuits. Unquestionably, there are times when litigation is the best or only recourse in a business dispute, whether with a competitor, customer, or business partner. A lawsuit may be the next necessary step after other attempts to resolve the conflict have failed. Sometimes, immediate court intervention is needed to vindicate or protect a company’s rights. In these situations, having a skilled and tenacious lawyer ready to advance your interests in the courtroom can be indispensable.
However, before you ask your lawyer to run to the courthouse and file a lawsuit on your company’s behalf, you should first know the answers to these questions about business litigation:
Are You Ready For a Years-Long Ordeal?
Never underestimate a lawyer’s ability to turn the simple into the complicated. In a business lawsuit, it happens often. Sometimes, it is by design, with one party using every means available to make the lawsuit as costly and painful to the other as possible.
Unfortunately, the rules and realities of business litigation mean that a seemingly straightforward case can devolve into a years-long slog. Even if your attorney does everything possible to keep the case moving forward, there are plenty of ways the other side can slow things down to a snail’s pace.
The parties may file motion after motion regarding various issues, each with weeks or months-long briefing schedules and hearings. The process of gathering evidence and questioning witnesses, called discovery, can also take a long time and cost a lot of money. You may need to retain experts and pay them handsomely for their reports and testimony. The parties may have to exchange and review thousands of pages of documents or electronic records.
Not only will your attorney spend a great deal of time (and your money) during discovery, but it can also place a disruptive burden on your shoulders and those of key employees. They may need to take time away from doing their jobs to prepare for and attend depositions, while other employees may spend hours searching through files and servers in response to subpoenas or document requests. Unless you’re ready for these possibilities, you may not be ready for contentious litigation.
What If My Case Is a Slam Dunk?
It may not be found in law books, but one of the foundational principles of litigation is that there is no such thing as a “slam dunk” case. No matter how brilliant your lawyer is, at the end of the day your fate lies with a judge or 12 jurors who may see things differently than you do.
Despite your belief in the strength of your case, your business could be on the receiving end of a judgment if the other party pursues a successful counterclaim. Similarly, Alternatively, all of the time and money you’ve invested with your lawyer may be for naught if the judge or jury denies you the damages you seek. Depending on the language of any applicable contract or agreement, the losing side may also suffer the indignity and cost of having to pay the other side’s attorney’s fees.
Can I Collect on Any Judgment I Get?
Of course, you may ultimately win your commercial lawsuit. Your business may obtain a considerable judgment for a large sum of money. But no matter how many zeros that judgment contains, remember that until that money is in your pocket, it is just a piece of paper.
First, whatever the amount of the judgment, subtract from that sum the amount your company paid your attorneys. That can turn a large judgment into a much smaller one. Second, even if you are successful in adding your fees and costs to the judgment, you may need to spend even more money to collect what the defendant owes you.
The judgment debtor may be insolvent, file for bankruptcy, or lead you and your attorney down a rabbit hole of strategies and shell games designed to stifle your collection efforts. The other party may also continue to fight, asking for a new trial or appealing the trial’s outcome to a higher court. The result of these appeals could be a reversal or even an order for a new trial, in which case the entire ordeal starts all over again. This means more bills from your attorney and more years spent engaged in litigation with no end in sight.
Again, none of this means that business litigation is always destructive or counterproductive. It is sometimes the best or only way to obtain the relief your company is entitled to. But if you approach litigation with a shoot first, ask questions later mentality, you may wind up shooting yourself in the foot.
