When you own a business, it is your responsibility to know and understand a lot of information. This can be confusing and overwhelming, especially if you are traversing a legal issue. Many people feel intimidated by legal scenarios because they feel more serious and often use jargon that is difficult to understand. This can be especially frustrating for business owners.
Legal matters are simply a part of doing business. Many companies face legal matters every day through contract negotiation, business-to-business transactions, employee retainers and salaries, and more. Unfortunately, this means that litigation may arise from time to time.
If you are a business owner or manager, it is important that you know what business litigation is and what it may entail. This helps to prepare you for all possible scenarios and may ensure that a litigation situation feels less intimidating if it should arise. This also helps to ensure that you can make informed decisions about your business no matter what is going on.
Business Litigation: The Basics
Business litigation encompasses all legal disputes that may occur between your business and other businesses, employees, or third parties. Litigation is an umbrella term for a legal negotiation between two parties who have differing viewpoints. This occurs after one party files a lawsuit against the other. Business litigation, then, is simply a lawsuit that involves a business rather than two individuals.
This can occur in many different forms. However, many times, it does indicate that the business has been involved in misconduct of some kind.
The Perception of Business Litigation
One major part of business litigation is the way that it comes across to the public and to customers. Unfortunately, many people view business litigation as an indication of wrongdoing. This can greatly diminish customers’ willingness to patronize your company, which can affect your business’s bottom line. Many modern customers take the time to work with businesses that share their values, and litigation may be an indication to them that your business does not share their moral standpoints, whether that is true or not.
Shareholder Disputes
A large portion of business litigation for public companies comes from shareholder disputes. This may mean that majority shareholders are ignoring minority shareholder opinions and perspectives, and minority owners wish to make their voices heard. In other scenarios, the shareholders disagree with major decisions that have been made and wish to challenge the board or the CEO. In yet other situations, shareholders wish to buy out others in order to have more of a say. There are nearly infinite situations in which shareholders may have disputes.
Shareholder disputes can become incredibly damaging to your company. Depending on the scenario, it could indicate that shares in your company do not truly provide a person with a say in the business’s operations. It could also insinuate that your shareholders have too much control and are changing the business’s objective too drastically. Whatever the situation may be, it is best to try and avoid shareholder disputes from going public. If they do, you will likely see a drop in your stock prices, which can ultimately be lethal to your business under certain circumstances.
Business-to-Business Disputes
In some situations, business-to-business contracts end in business litigation. If there is a breach of contract, litigation may be necessary to determine what should happen. Though your contract may outline consequences for certain situations, it is common for issues to arise that no one could have foreseen. Because of this, you need to enter litigation so that your attorneys can interpret the contract and negotiate a solution based on its terms.
Alternatives to Litigation
In most scenarios, it is best to try to avoid litigation if you can. Though it is a helpful tool in many ways, it can have a damaging impact on your business and create unnecessary problems for your media presence. Before you move to litigation, there are alternatives that you can try.
Mediation
Mediation is the best alternative to litigation if you can use it. Mediation is a manner of private resolution in which one legal representative oversees a conversation between representatives from both businesses. During this conversation, the two parties can voice their concerns and frustrations and collaborate to find a compromise. Through this process, the mediator keeps the conversation on track and ensures that the resolution is legal and fair.
With mediation, both parties often feel heard, and the resolution can be especially effective. When the affected parties create the solution, they often feel happier with the result. This can make the terms of the agreement easier to follow and more long-lasting.
Arbitration
Arbitration is another alternative to litigation that you may consider for instances in which mediation is not plausible. In arbitration, you present your case before three arbitrators who act as a judge and jury on the matter. The arbitrators listen to both sides before making a final decision about what should occur. Whatever they decide is final and legally binding.
Arbitration is like a smaller version of litigation. There is less hassle and spectacle, but it still acts as a way to come to a fair and impartial decision about an issue. Many businesses use arbitration when large issues arise because it avoids the publicity of litigation but offers a bit more structure than mediation.
Hiring a Business Litigation Attorney
It is important that you have a legal representative working on your business’s side when you enter litigation or arbitration. Without legal help, you face losing everything that you have built as well as your company’s reputation. A business litigator protects your company and ensures that the agreement is in your best interest. Though compromise does often require sacrifice, it is important that the resolution benefits your company in equal measure. A business litigation attorney can help with that.
Contact the Myers Law Group
Here at the Myers Law Group, we focus on business litigation because we understand its importance. Businesses rely upon their contracts and agreements to operate efficiently. We can help you to uphold your legal agreements and fight for your business when something goes awry.
For more information, contact the Myers Law Group online today.