In the business world, conflict is inevitable. Most conflicts are minor and fleeting in nature with no long-term impact on either party. But every now and then, you may find yourself in a business conflict where you unquestionably have been wronged, it was the other party’s fault, and something must be done. Imagine that you performed a lot of work for a customer, and now that customer ignores your invoices and phone calls. Or maybe, even though your commercial landlord promised to fix that leak in the roof, half of your inventory was just damaged by rain. Or perhaps you’ve discovered that a competitor is using a logo that looks just like the one you have used for years. Sooner or later, even the most pacifist of small business owners have to seriously consider taking legal action to protect their rights.
Over the years, I have counseled many small business owners who were considering litigation. We always talk at length about the events that led up to the dispute, and why they believe that they are right and the other side is wrong. We talk about the merits of the case from a legal perspective. Then, I try to understand their reasons for wanting to bring a lawsuit. If all goes well, what do they ultimately hope to accomplish?
Litigation can be necessary sometimes, but it is not the answer for every conflict. It usually is an expensive endeavor for all parties involved. Costs can be unpredictable and add up quickly. Litigation also can be a drain on your time and energy, and a distraction for your business. If you are going to voluntarily go through all of that, it had better not be for the wrong reason.
Consider the two most common wrong reasons to file a lawsuit:
1. Suing to harass your opponent. The law requires that the plaintiff have a genuine dispute with the defendant, and a legitimate interest in having the court resolve that dispute. Plaintiffs who bring lawsuits to hurt or harass the defendant, or to force the defendant to spend money, are considered abusing the process and could face civil liability, fines and other sanctions. The attorneys who help these plaintiffs abuse the process also face sanctions and discipline.
2. Suing to change your opponent’s mind. Regardless of the outcome in court, I have never seen litigants suddenly change their views because they were persuaded by their opponents. People tend to become more entrenched in their opinions as the litigation progresses. If your reason for suing is to get the other party to understand why they were wrong, save your money.
Every situation is different, and I recommend always talking to an attorney to mutually decide whether litigation is the right course of action in your specific situation. When you do, make sure that you are honest about your reasons for suing and what you want to accomplish, and that you also consider alternative ways to solve the conflict without resorting to litigation.