The newsLINK Group - Practical Ways to Avoid Litigation

Editorial Library Category: Legal | Preventive Law Topics: Avoiding Litigation Title: Practical Ways to Avoid Litigation Author: newsLINK Staff Synopsis: The good news about business litigation is that it usually concerns business matters, not important principles. After all, most businesses only exist as a way for its owners to make money. Editorial: Practical Ways to Avoid Litigation 4064 South Highland Drive, Millcreek, Utah 84124 │ │ (v) 801.676.9722 │ (tf) 855.747.4003 │ (f) 801.742.5803 Editorial Library | © The newsLINK Group LLC 1 The good news about business litigation is that it usually concerns business matters, not important principles. After all, most businesses only exist as a way for its owners to make money. But when a lawsuit does get in the way of making that money, the cost and the distraction can both be substantial. In fact, it’s possible that the distraction and lost productivity will cost you more than any dollar amount you might pay to your lawyer. Another fact to examine at length is the uncertainty of the outcome. You don’t know how long it will take to try your case, deal with postponements, and wait through appeals, but the amount of time can easily extend to years. In addition, it could be that the judge and (if there is one) the jury won’t decide in your favor. You just don’t know what is going to happen after you walk through those courtroom doors. Even if the case results in a settlement, the truth is that most judges and attorneys think the settlement is a fair one only when both sides don’t like the results. How can you protect yourself from litigation? The best tactic, obviously, is to avoid it as much as possible. But that might not always be possible. However, even if all you do is minimize your chances of going to court, that translates into huge savings of time, money, and energy. For small businesses, there are seven broad categories to think about when it comes to legal risk: 1. Brands and trade names: A trademark dispute can put a company out of business. 2. Business property: This would include any injury or death that occurs while someone is on a brick-and- mortar property. 3. Complaints: The most common reason for complaints occurs when someone is unhappy with a product or service. Someone might also think that the company’s advertising and marketing materials are deceptive. 4. Contracts: It is imperative that all important decision makers at a company know what they are signing, because the company is obligated to honor a signed contract unless an exception can be reasonably identified, such as a provision that violates one or more of a specific state’s laws. 5. Disagreements between owners: In the absence of well-written bylaws, buy-sell agreements, and shareholder agreements, sometimes there is no good way for owners to settle conflicts over major business decisions, compensation, or payments. 6. Employee management: Federal and state laws also require compliance with employment laws. These laws involve matters such as discrimination, accommodating employees who are disabled in some way, and sometimes might also include salary and benefits. 7. Raising capital: When a business is asking prospective investors for money that will be used as capital, the business is required by state and federal law to make specific disclosures. It is extremely unwise not to do so. Sometimes the way to mitigate risk is fairly simple: buy liability insurance, for example, or have well-defined policies for owners and a comprehensive set of rules for employment policies. But no matter how well-prepared you think you are, you still might end up having someone threaten you. The following sections contain some of our best advice about what to do when that happens. Make, Keep, and Study Records Intellectual property is one of your most valuable business assets. That means you should talk to a lawyer about how to protect it. If you choose a specific business name, for example, have legal counsel handle a trademark search and registration. This is done by dealing with the U.S. Patent and Trademark Office, and it probably isn’t as expensive as you might think to have your lawyer do an outside search and legal review. In addition to protecting any key names, also pay attention to patents, trademarks, and copyrights. For patents and trademarks, you will register with the U.S. Patent and Trademark Office; for copyrights,