Litigation

Lawsuits and Your Small Business

commercial litigation court houseIf you’re in business, chances are you’ll eventually either sue someone or be sued. The higher the stakes in a dispute, the more likely it will end up in court. Hallowes & Ebbeskotte can guide you through this difficult time. Our law firm can help you assess your case and together we can consider the disadvantages, advantages, and a projection of the costs of filing and litigating your case. You should evaluate the estimate range of costs of litigation, including attorney fees and discovery costs, the expected recovery, and the opportunity cost of your time as part of your evaluation of whether to proceed or not. Our firm can help you with each phase of your evaluation.

If you have decided to go forward with legal action against someone else, you should develop a strategy based upon:

  • The nature of the case
  • The basic strategy you prefer
  • The short-term objectives
  • The “investment” into the case you are willing to make

As the case progresses your evaluation of the case may change. You should be ready to change strategy’s if the “facts” of the case change for the better or worse.

It is the objective of Hallowes & Ebbeskotte to help you evaluate and reevaluate your case as may be necessary. There are many disadvantages of business litigation. You should consider the following:

Business litigation will be extremely expensive. It can cost you thousands of dollars, at a minimum.
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 of your productivity or of key employees. You will have to help us prepare the case, have your deposition taken, go to court and sit through the whole trial. A law suit is a “team” event!
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. Our firm will seek a protective order from the court to maintain the confidentiality of your sensitive material, but leaks can and do happen. Additionally, defense lawyers 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.
Most legal proceedings are public records. Publicity on a lawsuit can adversely affect business relationships and draw unwanted attention to your business from competitors and even taxing authorities and regulatory agencies.
There are two sides to every story, and there’s always a good probability that you will get countersued. Remember the old saying that “a good defense is a good offense”. Be prepared for the defendant to file against you whatever claim may exist.
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 a lawsuit out of principle. Your decision must be based on sound business judgment and not on emotions, no matter how you feel, you don’t want to waste resources on efforts that are not based on economics. The emotional cost of a law suit is high for most people, but it is difficult to place a dollar value on sleepless nights.
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 additional legal fees and frustrations that many people do not anticipate.
People are seldom satisfied with the final result in any lawsuit.
Despite the numerous disadvantages of litigation described above, there are sound reasons for pursuing legal action. The following are advantages of litigation you should consider:

Most business lawsuits are brought over monetary disputes, such as for services provided or goods sold. Be aware that a court will not allow damages to be awarded to you that are speculative. You must prove your losses or damages with a reasonable degree of certainty. Our firm often uses expert witnesses, such as a forensic economist or C.P.A., to establish damages in a case. We will probably have to do something similar in your case (and experts don’t work for free).
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. Temporary restraining orders and preliminary injunctions are effective tools to enforce restrictive covenants or non-solicitation clauses in employment agreements. The law does not favor these documents and the costs of the action will be high so you must proceed carefully.
You should always consider the present and future strategic consequences of bringing a lawsuit in the decision-making process. Perhaps you need to let your customers or employees know that you take contracts seriously and will enforce your contracts as may be necessary. This type of action can serve as a deterrent to similar acts in the future by employees or customers.
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