The Many Causes of Litigation

Causes-of-Litigation

When you own or run a business, litigation is one of the many hazards that you may face.  It is essential to consult with your commercial lawyers for sound legal advice and find out what steps are needed to resolve all kinds of disputes quickly and prevent litigation that could be the ruination of your business. Taking out insurance to cover litigation is also essential, otherwise you could find yourself bankrupt.

Here are some of the causes of litigation that businesses face and tips to prevent it: –

  • Accidental or intentional injury of a client or customer on the business premises. Prevention includes ensuring your workplace is safe for both customers and employees. Prompt dispute resolution practices should be instigated at the first sign of trouble.
  • Accidental injury of an employee during the pursuit of his or her employment. Workplace injuries are a fact of life. You can help prevent them by adopting safe practices and training staff to do their work safely.
  • Intentional injury by another worker on the premises. Another reason for dispute resolution strategies.
  • Defamation of a client or an employee by the company. Watch what you say. People can get irritated and say things they don’t mean. People can become offended and sue.
  • Sexual harassment by an employee or manager to an employee. Training staff how to behave properly should not be necessary – but it is.
  • Litigation may be instigated to recover debt your business owes. Pay all your accounts on time and make sure you don’t forget them.
  • Wrongful termination. Take care who you employ, making sure that they are suitable candidates so you won’t have to terminate their employment. If you do have to, make sure it’s for the right reasons.
  • Don’t do it and don’t allow others to do it.

Within each type there are sub-types, however the list covers the most likely reasons your company might be sued. Undergoing litigation is expensive, time consuming, traumatic and has the potential to put you out of business which is why everything possible should be done to avoid it.

Settling out of court is often a far better option that the person who sues may also be willing to use, especially once they know how long and traumatic the process will be, because it is an emotional trauma for both parties having to go to court day after day. It really stops you from getting on with your life.

Taking out more insurance than you think you’ll need is also a good idea. While insurance costs can be high, they are never as high as the costs of litigation.  If you have insurance you’ll be able to start up again if the worst should happen.