Strategic Business Litigation: From Pre-Litigation Negotiations to Collections

A Guide For Businesses

June 12,2024 | Litigation

In the fast-paced world of business, disputes are inevitable. Whether it’s a breach of contract, intellectual property infringement, or LLC partnership disagreement, conflicts can arise and escalate, requiring legal intervention. Understanding the civil litigation process is crucial for businesses to navigate these challenges efficiently and effectively. From pre-litigation negotiations to post-trial collections, each step holds its own significance in achieving a favorable resolution. Here’s an introductory guide to help businesses grasp the navigate and understand the business litigation process.

What Is Litigation?

Litigation is the process of resolving disputes in court. In other words, litigation means a lawsuit. So, when we talk about business litigation, we’re talking about a situation where a business is either suing someone in court, or the business is being sued in court.

The Phases of Litigation

Litigation happens in phases. While some phases may overlap or happen out of order based on the circumstances of each individual case, the outline below is what you can generally expect to see in most cases.

Pre-Litigation.

Before initiating formal legal proceedings (i.e., before filing a lawsuit), parties often engage in pre-litigation negotiations or alternative dispute resolution methods like mediation or arbitration. This phase allows businesses to explore settlement options, mitigate costs, and preserve relationships. Mediation, facilitated by a neutral third party, encourages open dialogue and creative problem-solving to reach a mutually acceptable agreement. Direct negotiations also provide an opportunity for parties to discuss concerns, assess risks, and potentially avoid the adversarial nature (not to mention the cost) of litigation.

Initial Pleadings.

If pre-litigation efforts fail to resolve the dispute, one party will initiate the lawsuit by filing a document called a Complaint. The Complaint outlines a party’s claims and legal basis for relief, along with the relief they request. The defendant then responds with an answer, admitting or denying the allegations and asserting any affirmative defenses. These initial pleadings set the stage for the litigation process, defining the issues in contention and shaping subsequent proceedings.

Discovery.

Discovery is a critical phase where parties exchange relevant information and evidence to investigate their respective cases against each other. In most lawsuits, discovery is the longest and most expensive portion of the litigation process. Discovery can overlap almost any other phase of the litigation, often beginning just a few weeks after a lawsuit is filed, and continuing up until the eve of trial.

There are many different kinds of discovery you’re likely to encounter in a business lawsuit. Through methods such as interrogatories, requests for production of documents, depositions, and expert witness disclosures, both sides gather facts, assess credibility, and identify strengths and weaknesses. Discovery aims to promote transparency, narrow the scope of disputes, and facilitate informed decision-making before trial. For more information about the discovery phase of litigation, stay tuned for our discovery deep-dive post.

Motion Practice.

During litigation, parties may file various motions seeking procedural or substantive relief from the court. Common motions include motions to dismiss for failure to state a claim, motions for summary judgment based on undisputed facts, and motions to compel discovery or exclude evidence. Motion practice allows parties to address legal issues, resolve disputes, and streamline the litigation process before proceeding to trial.

Most business lawsuits include at least one motion for summary judgment, where one party asks the court to decide a critical legal issue, claiming that the relevant facts are not in dispute. It is common to see summary judgment motions filed after written discovery is complete, and before depositions begin. There may be another wave of summary judgment motions after both written and deposition discovery are largely complete.

ADR.

Most courts require the parties to engage in some kind of ADR, or alternative dispute resolution, prior to trial. This may include mediation or arbitration. Many courts require pretrial ADR even if the parties have already attempted mediation or arbitration before filing their lawsuit. It’s common for the parties to resolve their cases at this point, rendering trial unnecessary. Smart litigants working with savvy lawyers and mediators can save tens of thousands of dollars (or more) in legal fees by making effective use of court-mandated ADR.

Trial.

If the parties fail to settle or resolve their disputes through ADR, the case proceeds to trial. This is an intensive process, and it’s important that the parties are prepared for both the time and expense of a trial so they can make informed decisions about their cases.

Trial itself has several phases, the first of which is pre-trial filings and motion practice. Here, the lawyers on all sides get together to prepare and agree on evidence, witnesses, the scope of the issues and evidence for trial, and more. Numerous court filings are invovled. When the attorneys can’t agree, they file pretrial motions that may include motions in limine, motions to exclude, and more.

After the heavy lifting of pretrial work is done, the trial itself begins. This is the portion of the lawsuit we’re all familiar with from TV and movies, where each side presents its case before a judge or jury, offering testimony, witnesses, and exhibits to support their arguments. The trial process involves opening statements, examination and cross-examination of witnesses, presentation of evidence, and closing arguments. The judge or jury evaluates the evidence, applies the relevant law, and renders a verdict based on the preponderance of evidence or the applicable legal standard.

Post-Trial.

Following the trial, the court issues a judgment, resolving the dispute (in theory at least – read on) and determining the rights and liabilities of the parties. Parties will often be required to file additional motions at this point seeking attorney fees or other additional rulings from the court. Parties dissatisfied with the judgment may have the option to appeal, seeking review by a higher court to challenge legal errors or procedural irregularities.

Collections.

Once the court enters judgment, and assuming there are no appeals, the prevailing party may face the challenge (not to mention the additional legal fees) of enforcing the judgment and recovering damages or other relief awarded by the court. Collection efforts may involve garnishment of wages, seizure of assets, liens on property, or other legal mechanisms to satisfy the judgment. Diligent and strategic collection practices are essential to realizing the benefits of a favorable judgment and achieving closure in the litigation process.

In conclusion, civil litigation can be a complex and demanding process for businesses, requiring careful planning, strategic decision-making, and effective advocacy. By working with experienced business litigation attorneys, like the team at Skepsis Legal Solutions, businesses can navigate disputes with confidence and pursue favorable (as well as cost-effective) outcomes that align with their objectives and interests. Whether through negotiation, litigation, or enforcement of judgments, businesses must approach civil disputes thoughtfully and proactively to protect their rights and achieve resolution.

If your business has been sued, or if you’re wondering whether to file a lawsuit, be sure you’re making cost-effective decisions for your business. Schedule a consultation with one of our litigation attorneys to discuss your various litigation options and strategies.

Stay in the Loop!

Browse by Category

Strategic Business Litigation: From Pre-Litigation Negotiations to Collections

Strategic Business Litigation: From Pre-Litigation Negotiations to Collections

In the fast-paced world of business, lawsuits are inevitable. Here's an introductory guide to help businesses navigate the business litigation process.
Hiring Minors in Washington State

Hiring Minors in Washington State

Hiring employees under age 18? Make sure you know the rules.
The Corporate Transparency Act and FinCEN: What Small Business Needs to Know

The Corporate Transparency Act and FinCEN: What Small Business Needs to Know

Maybe we live in a world where corporate transparency and protection from terrorism is paramount. Maybe, on the ...
Why Your Business Needs a Document Retention and Document Destruction Policy

Why Your Business Needs a Document Retention and Document Destruction Policy

In the digital age, businesses are inundated with data and documents, from sensitive customer information to ...
Key Questions to Consider When Forming an LLC with Partners

Key Questions to Consider When Forming an LLC with Partners

When forming an LLC with partners it's critical to create a custom-tailored, well-thought-out operating agreement that addresses various key questions. Here are some essential questions to consider when forming an LLC with partners.
Does My Business Need A Registered Agent?

Does My Business Need A Registered Agent?

Yes, your company does need a registered agent.Running a company involves complying with various legal ...
Critical Non-Compete Legal Updates For Your Business

Critical Non-Compete Legal Updates For Your Business

Many businesses could find themselves facing fines and penalties if they use old versions of non-compete agreements with their employees and independent contractors, or if they don't work with an attorney experienced in state non-compete law to carefully draft their documents for them.
Do I Need A Shareholder Agreement?

Do I Need A Shareholder Agreement?

Introduction to Shareholder AgreementsWe’re about to demystify the world of corporate law, and show you how to ...
The Business Owner’s Intro to Hiring Employees

The Business Owner’s Intro to Hiring Employees

Today's guest post is by Kristin Deese, founder of Catalyst Consulting, a small business consulting agency. She ...
don't be busy, be productive

Join Our Mailing List.

As a thank you, we'll send you our guide on Five Proactive Steps to A More Legally Protected Business.