Dealing with a lawsuit during the life of your business might be inevitable if you have a thriving business. In fact, there are usually appropriate situations where litigation is necessary. However, by implementing a few common sense tips, not only can you lessen the risk of your business being sued or having to sue, but in the event litigation is unavoidable, you will be in a stronger position.
- Put yourself in their shoes. Before declaring war against an adverse party, consider what is objectively right, not only from your perspective, but also from the perspective of your potential adversary. When stepping into the shoes of the opposing party, you can achieve a more enlightened understanding of what motivates the other party. This common ground can help both sides achieve an agreeable settlementand avoid litigation.
- Don’t sit on potentially threatening developments. If there is a screw up, fix it. People screw up. It is usually done inadvertently and often it only is visible with 20-20 hindsight. But when it happens, fix it right away. That might mean paying someone for something that they did not receive, covering the cost of the resulting injury or disclosing more information to the marketplace. How to go about fixing the problem, however, should be decided with the assistance of legal counsel. Often you may want to fix it without admitting wrongdoing, so work with your counsel to figure out the best way to do this.
- Put it in writing. One of the most common causes of business litigation is the failure of the parties to memorialize the duties and obligations of the contracting parties on paper. Usually, this is because the parties are either too busy to get down to the details, or because they have a past dealing relationship. Before any party performs on a contract, good care should be taken to ensure that there is a written memorialization setting forth the duties and obligations of the parties, whether it involves an employee, supplier, customer or business partner.
- Retain an attorney to review your contracts. To save costs today, business owners often opt to utilize standardized contracts they find online for particular transactions. Web-based services which offer standardized documents are certainly useful and time-saving, but often these forms do not take into consideration specific needs or technicalities of the businesses involved or jurisdictional laws. Retaining an attorney to review contracts is therefore imperative, especially when you are dealing with a new client or business partner.
- Think about who you want to do business with. Conduct an internet search and check out your potential clients or customers, employees and suppliers. Ask yourself whether they appear to be an individual or company you want to do business with. Are they the type of client you would want to work with, or the kind of person you would want to recruit?
- Ensure you are up to date on your employment contracts. Illinois is an at-will employment state, meaning that under most circumstances either employer or employee can terminate the employment at any time. However, for most businesses it makes sense to have a written contract between the employer and employee setting forth the general responsibilities of the employee and expectations of the employer. Experience shows that having written contracts helps to limit future litigation by setting forth written expectations of the parties.
- Make sure you have an updated employee handbook. Every company should have an employee handbook and provide it to all employees. It sets forth employer expectations and also provides statements of compliance with federal and state laws and regulations. Navigant is involved in many employment lawsuits wherein employers have outdated handbooks or no handbooks at all. This can be detrimental to the defense. Maintaining a current handbook is essential to avoiding problems with employees down the line.
- Conduct annual training of your employees. Employees should undergo training on a yearly basis regarding the prevention of discrimination and harassment. Some insurance carriers require this, but regardless of insurance, employers can save huge amounts of money by ensuring that all employees are aware reporting procedures and of what constitutes discrimination and harassment.
Conclusion
Sometimes it is impossible to avoid litigation. But remember to involve your attorney in your business so that you can prevent unnecessary litigation. It is also important that you don’t wait until you are sued, or you want to sue, to involve a litigation attorney. The time to do so is when you see trouble out on the distant horizon. An experienced business litigator can help you shape the dispute so that it is consistent with your contract terms and conditions — as well as the law — so that you are in a better position to prevail in court.
Should you have any questions about how to keep your business out of court or any other laws that may affect your business, or would like to schedule a free initial consultation, please contact Waltz, Palmer & Dawson, LLC at (847)253-8800 or contact us online.
Waltz, Palmer & Dawson, LLC is a full-service law firm with various areas of service to assist your business, including: Employment Law, Intellectual Property, Commercial Real Estate, Business Immigration, Litigation and general Business Law services. Individual services include Estate Planning, Wills and Trusts, Probate, Guardianship, Divorce and Family Law.
This article constitutes attorney advertising. The material is for informational purposes only and does not constitute legal advice.
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