Individuals and businesses are often advised to pursue arbitration or mediation to resolve a conflict with a business partner. The reasons usually given include the cost of litigation, how long it takes to get a court date and the risk of losing. These are three valid points, and there are others as well, but there are times when litigation is the best option for resolving an issue with a partner, customer or competitor.
6 reasons why litigation works
Any of these may be enough, but often there will be more than one good reason to litigate a matter:
- Forced cooperation: Litigation brings reluctant parties to the table, forcing them to address the matter rather than ignore or delay it.
- Closure: Some may negotiate with no intention of resolving the matter, but litigation concludes with a ruling.
- Sets a precedent: Those who show a willingness to litigate their dispute set a tone that they take disputes seriously, perhaps prompting the other side to avoid testing the company who litigated previously. It can also establish a ruling on an issue that likely will appear again in the future.
- Public record: Parties often want to keep the details of the dispute private, so the threat of a public record documented during court can motivate the other party to resolve the dispute equitably.
- Cost: The legal fees for litigating a case are higher, but the benefit of results could lower legal expenses in the future because the matter has a precedent.
- Appeal: Those who feel that the judge did not consider all facts can appeal the decision.
When is it the right decision?
Those with a business dispute will often gain insight when they speak with someone who handles litigation cases. These legal professionals can examine the details of the case and provide an educated opinion regarding the viability of litigation.