Pros and Cons of Filing a Business Lawsuit

If you're in business, chances are you'll eventually either sue or be sued. The higher the stakes on a dispute, the more likely it will end up in court.

Disadvantages of Business Litigation

• Costs. Unless you are lucky enough to find a lawyer to take your case on a contingency fee basis, business litigation will be extremely expensive. It'll cost you thousands of dollars, at a minimum.
• Time. If you decide to pursue a lawsuit, it is going to suck up huge chunks of time that could rob you and your company of weeks or even months of productivity. You will have to help your lawyer prepare the case, have your deposition taken, go to court and sit through the whole trial.
• Loss of Privacy. By filing a lawsuit, you may expose proprietary information and other business records not only to the other side but also to the public at large. Defense lawyers have an arsenal of tools that they can use to get you to answer questions and turn over documents. They can also subpoena other people and use similar tactics on them. They will be looking for dirty laundry and smoking guns. So the affairs of your company had better be in order before you decide to sue anybody.
• Unwanted Publicity. Most legal proceedings are public records, so everything that comes up in a legal proceeding is not only going to be available to the other side but also the public at large. Your business could become an open book to the media and even to your competitors.
  Publicity on a lawsuit can also adversely affect business relationships and draw unwanted attention to your business from taxing authorities and regulatory agencies.
• Countersuits. There are two sides to every story, and there's always a good probability that you will get countersued, so be prepared for it.
• Obsessing Over a Case. It's not at all uncommon for people to become obsessed with pursuing a lawsuit to the point that it adversely affects their business and even family relationships. You should never pursue litigation out of principle. Your decision must be based on sound business judgment and not on emotions.
• Delays. Trial dates are usually delayed for months and years at a time. You may find on the eve of trial that no courtrooms are available and that the matter has been continued to a date months into the future. This can result in huge legal fees that many people do not anticipate.
• Dissatisfaction with Outcome. People are seldom satisfied with the final result in any business lawsuit.

Advantages of business litigation

• Monetary Gain. Most business lawsuits are brought over monetary disputes, such as for services provided or goods sold. A case based on lost profits is speculative unless you can prove consistent earnings over a period of time. It may be possible to recover other types of monetary awards such as compensatory and punitive damages.
• Injunctive Relief. You may benefit tremendously from getting an injunction or restraining order against someone who is irreparably harming your business, such as a former employee or competitor who is misusing trade secrets or other proprietary information.
• Strategic Considerations. You should always consider the present and future strategic consequences of bringing a lawsuit in the decision-making process. If you are in a position of strength, it may make more sense to bring suit.

Pursuing a lawsuit is not an endeavor for the faint-hearted. You should candidly assess where you may end up if you choose to go this route to resolve a business dispute.

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