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Deciding to Litigate…Or Not

When it comes to business litigation, the issue of whether to litigate or settle or attempt to use an alternative dispute resolution is one that depends on many factors. Small to medium-sized businesses in particular are vulnerable to the damage that a lawsuit can cause. In the event that you suspect a lawsuit from an employee, customer, or another business, you should speak to an attorney to determine how the specific scenario facing your business changes your evaluation of the factors listed below.

What Are My Options When Faced With A Lawsuit?

When your business is faced with a potential or actual lawsuit, there are a few ways to resolve the issue.

  1. Litigate. Although it is usually the most costly of the methods chosen, sometimes a business will want to fight hard for its reputation against certain claims that it feels it will be likely to win. Litigation will take longer than the other two methods and it will cost more in legal fees to litigate a trial in court than it will to settle or utilize one of the alternative dispute resolution methods.
  2. Settle. While it may not sound like the most favorable option, there are many reasons a business would want to settle a dispute outside of court. Further, a settlement agreement can include favorable terms for the business with respect to privacy or even a bit of “give and take” in the event that your business was planning to raise a counterclaim against the plaintiff.
  3. Alternative dispute resolution. In the event that a settlement is not possible between the parties, an outside third party can still help you bring closure to the issue without the costs of a full trial. Alternative dispute resolution is a vast category of methods that includes processes like mediation and arbitration.

Factors That Will Determine Which Method You Choose

While evaluating the aforementioned options seems like an enormous undertaking, there are some factors that will play a part in determining which method best suits your situation.

  1. Credibility of the claim. One of the first considerations you should make is whether the plaintiff’s claim is likely true. If the plaintiff is bringing a lawsuit for a claim that is true, you may be best served to settle the case, however, if the plaintiff is bringing an outrageous claim that may be frivolous, you may be able to expedite the process during the litigation.
  2. Credibility of the plaintiff. Aside from the question of whether the claim is true, it is also important to consider whether the plaintiff can make a claim look true; a credible plaintiff is likely to appeal to a jury in a significant way.
  3. The effects of the publicity of a lawsuit. If you have a smaller business that depends on neighborhood customers and their opinions of your business, you may not be well served to publicly litigate against a trusted community member in court.
  4. Cost efficiency. One of the most significant considerations to make involves the costs of each of the methods. For smaller businesses, legal costs can be crippling, further, any money that is paid to the plaintiff is a cost outside of legal fees and can add to the burden of a lawsuit.

There are so many issues to take into account when determining how to deal with a potential or actual lawsuit. Rightly determining this issue can be the difference between a favorable outcome that saves your resources and enables your business to carry on as usual and a nightmarish process that leaves you emotionally drained and your business financially drained. In Florida, Pike & Lustig, LLP retains business litigation attorneys that can inform you of your options and execute whatever option you decide is best for you.

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