Top 5 Tips to Avoid Litigation

While running a business, at some point or other, you end up facing a lawsuit. Proper dispute management is an excellent way to avoid litigation that can be achieved with the help of the best commercial litigation solicitors.

There are several reasons why businesses must avoid litigation. Going to court is quite costly and can often lead to a difficult situation that may be impossible for an organization to recover from. Moreover, litigation distracts employees, managers and owners from doing their jobs and these distractions can be time-consuming as well as detrimental to an organization’s productivity. Also, it creates adverse effects on an organization's reputation.

The following are the tips to avoid litigation:

1. Rule of Thumb

Think what is right objectively, not just from your perspective, but also from your adversary’s perspective, before announcing an all-out war against them. When you step into the shoes of your opposing party, you sometimes get a more enlightened perspective of what motivates them. This common ground can help both sides achieve an agreeable settlement & avoid litigation.

2. Proper Communications

Clear communication of a business relationship from the inception through the final transaction between the two parties is essential. Keeping the communications clear & open between both parties in the waning days before litigation occurs is equally crucial to avoid litigation. Often, litigation ensues due to one side’s complete failure to respond to the other side’s communication.

3. Analyze the Organization’s Historical Performance

Obtaining the knowledge of the organization’s weaknesses from situations that have resulted in litigation previously can help you avoid costly litigation in the future in a similar situation. However, an organization should also study those situations in which the adversary party has been sued or has itself filed a suit to avoid litigation in the future. It should also carefully scrutinize situations where a problem was resolved and the suit was successfully avoided. It is important to cure the causes behind the failures and reinforce factors that support success.

4. Do Not Wait for Prospective Threatening Developments

Due to inadequate resources & attention given to a dispute in its early stage, opportunities to avoid litigation are often missed. One of the effective ways to ensure proper analysis and identification of an existing or potential risk is to implement an expedited review procedure. Such a procedure helps in ensuring that resources are employed timely to improve your prospects of avoiding litigation.

5. Incorporate Litigation Avoidance and Risk Shifting Provisions

Many business disputes will either be directly or indirectly related to contractual instruments. One powerful way to avoid litigation is to include litigation avoidance provisions and/or risk shifting avoidance provision within your contractual instruments. Here are some examples of such provisions:

Litigation Avoidance Provisions:

• Cure provisions
• Arbitration provisions
• Mandatory mediation provisions
• Fact-finding and/or neutral evaluation; etc.

Risk Shifting Avoidance Provisions

• Indemnity & hold harmless provisions
• Additional insurance provisions
• Exculpatory agreements
• Release, Disclaimer and Waiver language

If you need assistance with a business litigation issue, you can get in touch with Cranbrook Legal, one of the leading Litigation Solicitors London.