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How the business litigation process works

Nearly all business owners face disputes at one point or another. The disputes may involve breach of contract allegations, disagreements with business partners, problems with vendors or suppliers, or issues with employees, to name a few.

In some cases, litigation is necessary to settle the matter. When most business owners hear the word litigation, they tense up and picture an expensive courtroom battle. However, the vast majority of business-related lawsuits settle before ever reaching trial.

Here are some other important things to know about the litigation process:

Your lawyer might start with a cease and desist letter.

If another business or a former employee is engaging in behavior that is hurting your business, your lawyer might start with a letter demanding that the party cease and desist the behavior or a lawsuit will be filed. Unfortunately, demand letters aren't typically successful in most cases.

All parties involved will get the opportunity to tell their side.

Even if you are the one to file the lawsuit, the other parties will have a chance to respond with their own side of the story in an "answer." They could file a counterclaim against you or bring in other parties, who they say are really at fault. Or they could also ask the court to dismiss the lawsuit.

Evidence will be gathered during the discovery phase.

This is an extremely important part of a lawsuit during which time the parties have the chance to ask for evidence such as documents and testimony from those involved. This is when your lawyer will gather everything necessary to build your case.

Mediation or arbitration may be used to settle the dispute.

Today, many lawsuits are settled through alternative dispute resolution processes such as mediation or arbitration. These methods forgo the traditional court process and can result in evidence and settlements remaining private and confidential.

Mediation, especially, can be more cost effective to the parties involved and give them more control of the outcome. Mediation involves a third-party neutral mediator who facilitates negotiations between the parties.

Arbitration involves a trial that takes place in front of a private arbitrator or a panel of private arbitrators, who then issue the final, binding, decision.

Very few cases actually go to trial.

About 90 percent of cases end up being settled before trial through summary judgment, negotiations or mediation.

Sometimes only one or two issues have to be decided at trial while the remaining issues are settled in other way. If a case does go to trial, either a judge or a jury panel will issue the final decision. It may be possible to appeal the decision that is made.

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