Litigation, the process of resolving legal disputes through the court system, can be a smart option to settle a business dispute under certain circumstances. While litigation is often viewed as a last resort due to its potential costs and time-consuming nature, there are situations where pursuing litigation can be a strategic and favorable choice.
Here, you will find some key scenarios where litigation may be prudent:
High stakes and an actionable judgment
Litigation may be a sensible choice if the dispute involves substantial financial losses, valuable assets or intellectual property rights. Going to court can provide a formal and enforceable resolution, with a judge or jury assessing the evidence and making a binding decision. Litigation offers the opportunity to protect the interests of the parties involved when a significant amount is at stake.
Failed negotiations and alternative dispute resolution
When negotiation or alternative dispute resolution methods have proven ineffective, turning to litigation becomes a viable option. Despite efforts to reach a settlement through negotiation or mediation, parties may reach an impasse where their positions are irreconcilable. Pursuing litigation can provide a neutral and impartial forum to resolve the dispute in such cases.
Establishing legal precedent and clarifying legal issues
Litigation can be an appropriate choice when there is a need to establish legal precedent or clarify an important legal issue. Pursuing litigation can lead to a court’s interpretation and guidance if a business dispute involves a novel or complex legal question. This is particularly valuable for businesses operating in industries with evolving legal frameworks or regulatory environments.
While litigation should be carefully considered, settling a business dispute in specific circumstances can be a smart option. It is important to assess the costs and weigh the potential benefits before deciding to pursue litigation.
