In an ideal world, you’d be able to seamlessly navigate the business world without having to worry about running into stressful, costly, and time-consuming disputes. However, in the real world, business disputes are inevitable — and the way you handle them can shape your business’s future. Many disputes are resolved through litigation or settlement, but before you decide how to resolve yours, you should make sure you understand the pros and cons of litigation and settlement.
When it comes to resolving business disputes, settlement and litigation each have advantages and disadvantages. This is not a decision to make lightly. Make sure you consider the effects each option may have on your business going forward.
Pros and Cons of Litigation
Many business owners try to avoid litigation because of the expense and time investment, but that doesn’t mean it should be avoided in every case. Litigation has several potential advantages, such as:
- If your business is facing false allegations, litigation may help you clear your name.
- Litigation generally results in stronger remedies than settlement.
- Trials are a matter of public record, so if the other business has acted unethically, that conduct will be exposed.
Of course, litigation has its disadvantages as well, including:
- There are no sure things in trial, and you may end up with an outcome you didn’t expect.
- Court costs, expert witness fees, attorney fees, and other expenses add up quickly.
- Litigation is time-consuming, and some cases take years to resolve.
The details of your dispute will often play a major role in your decision to litigate or not. For instance, if the allegations against you are serious and patently false, the cost and time involved in litigation may be worth it to clear your name. If there is some truth to the allegations you’re facing, you might prefer to avoid the publicity of a trial.
Pros and Cons of Settlement
If you want to avoid the potential downsides of litigation, you might consider settling your case. These are some of the advantages of settlement over litigation:
- You have more control over the outcome than you do with litigation.
- You can save a significant amount of money.
- It usually takes much less time to settle than to litigate.
Settling also comes with its share of downsides, such as:
- You may feel pressured to accept unfavorable settlement terms just to avoid going to trial.
- If the other party has wronged you, you won’t have a chance to expose their unethical conduct.
- Most settlements are confidential, so if you had hoped to clear your business’s name, you may not be able to.
Not sure whether to settle or litigate? You don’t have to decide alone. Call Weisblatt Law Firm at (713) 666-1981 to get started with a free phone consultation.
Factors to Consider When Choosing Between Settlement and Litigation
No Two Business Disputes Are the Same
Deciding between settlement and litigation can be a challenge. Before you make your final decision, it’s worth asking yourself some questions.
What’s Your Budget?
If cost is a concern, settling is almost always less expensive than litigation. While you should still have an attorney to advise you, hiring a business lawyer to negotiate a settlement is less costly than hiring one to represent you at trial.
How Strong Is Your Case?
If the facts of the case are in your favor and you have a good chance of winning, going to trial may be worth it. If you take your case to court and win, the other party will likely be ordered to pay you more in damages than you’d get in a settlement.
Do You Have a Timeline?
If resolving your dispute expediently is important, you should try to pursue settling before going to trial.
Is Publicity (or Avoiding Publicity) Important?
Trials are public, and settlements are typically confidential. If the other party has committed serious wrongs and you want them to be exposed, you may want to go to trial. However, if you worry that publicity will damage your own company’s reputation, settling is probably in your best interests.
Alternative Dispute Resolution
Litigation and settlement are not your only options when it comes to resolving disputes. Alternative dispute resolution (ADR) is a process that often helps businesses resolve disputes faster and more economically. There are many types of ADR, but some are more common.
Mediation
A trained, impartial third party facilitates discussion and tries to guide both parties toward a decision. However, the issue will only be resolved if the parties agree on a solution.
Arbitration
A trained, neutral third party hears each side’s argument. After considering the evidence, the arbitrator issues a decision. That decision is almost always legally binding.
Hybrid Methods
If neither mediation or arbitration is the right fit, you might choose a hybrid method of ADR that includes elements of both mediation and arbitration. Med-arb is a common example. This process begins with mediation, and if the parties cannot agree, the mediator transitions to the role of arbitrator and issues a decision.
The Role of Business Attorneys
Whether you decide to litigate or settle, having an experienced business attorney representing you is essential. But did you know that a business attorney can be helpful even before you get to either stage? Business attorneys deal with business disputes on a near-daily basis, and they can often assess your case and tell you whether you have a good chance of winning at trial or if settlement is a better option. Essentially, an attorney is more than a legal representative — the right business lawyer functions as a trusted advisor as well.
Need Help Resolving a Business Dispute?
Experience You Can Trust
Every business dispute comes with its own challenges and considerations. And because disputes can have a far-reaching effect on any business, seeking experienced legal guidance is vital. Weisblatt Law Firm has been advising business owners on virtually every kind of legal issue since 2009.
Business disputes can be challenging to solve — financially, logistically, and emotionally. At Weisblatt Law Firm, we have helped countless Houston-area businesses favorably resolve a variety of disputes. Call us at (713) 666-1981 to start working toward a solution.
Attorney Andrew Weisblatt
Mr. Weisblatt has practiced continuously since becoming licensed in 1992 and has represented businesses ranging in size from one person start-up ventures to multi-national corporations employing hundreds of people in multiple countries. From 2005 through 2009 Mr. Weisblatt was in-house counsel and chief operating officer of a multi-national corporation in the steel products industry. That in-house position provided valuable insight into how businesses work and what they actually need from their lawyers – both in-house and outside counsel. Attorney Bio
