In Business Disputes There is No Such Thing as a “Good Case”

Business Lawsuits Are Either Avoidable or Unavoidable

Lawsuits are a dismally inefficient way to resolve business disputes. Business litigation is costly, slow and rarely delivers what the parties seek – a decision on who wins and loses. Consider three facts:

1. 8 million – the approximate number of business-related lawsuits that are filed each year in the United States

2. 3 years –  the average length of time for business cases

3. 1% – or less of business lawsuits go to trial

No matter how confident parties and lawyers are that they have a “good case,” choosing litigation to resolve conflicts over contracts, partnership disagreements, loan terms, employment matters or any other business dispute, makes little business sense in most circumstances. Rather than to classify lawsuits as “good” or “bad,” business people should think of litigation as “avoidable” or “unavoidable.” Because of a lack of planning, there are far too many avoidable business lawsuits.

The secret hiding in plain sight is that business litigation is almost always a slow dance toward settlement. Even if the parties are determined to stand in line through the lengthy (and expensive!) pre-trial process, at some point before the trial date, it is inevitable that there will be significant internal or external pressure to settle a business case. Often, suffering financial exhaustion from costly and disruptive pretrial discovery or seeking to avoid the risks of trial, the parties will conduct direct negotiations before the trial date. Alternatively, out of necessity due to crowded dockets, the court will direct the parties to attend a settlement conference with a judge or encourage them to retain a private mediator.

Business People Should Not Spend Years In Expensive Litigation If The Outcome Will Likely Be A Pre-Trial Settlement Anyway

It is clear that business people should stop automatically choosing litigation to resolve business disputes.  Business problems do not become legal problems when a dispute arises. They are still business problems requiring business judgment.  Business people should be very reluctant to ask others who likely have little or no experience in their business to decide who wins and who loses business disputes. Judges and juries do a great service when carefully deliberating and deciding whether or not a criminal defendant is guilty. However, the strengths of the legal process are not easily applied to interpreting a business agreement, deciding an intellectual property dispute or determining the value of partnership assets.

When business people try to resolve their disputes through litigation, they are hiring very expensive coaches to prepare for a game that rarely will be played and whose outcome will be decided, not by the teams, but by the referees and a vote of the spectators (who do not want to be there and usually do not understand the plays). It is little wonder that nearly all business parties eventually become desperate for a way out before trial.

Business Mediation – A Better Way

Business Mediation Network provides mediators with extensive business experience to assist the parties in resolving disputes before the case is filed or before significant additional litigation expenses are incurred. BMN Business Mediators are experts in the business world. Rather than guessing who will ultimately win or lose a legal battle, Business Mediation Network offers mediators who use their business skills and experience to help the parties take a realistic view of their business interests. A clear majority of disputes submitted to mediation are resolved and the parties usually know early in the mediation whether or not a settlement can be reached. In the minority of disputes that do not settle in mediation, at a minimum the parties come away with a much better idea of the commitment and resources of the opposing party; two important but often misperceived factors in deciding whether to pursue, defend or abandon a business lawsuit.

It is very important for businesses to have Business Mediation Network’s Mediate1st® clause in every contract including partnership, employment, loan, lease or other agreements.  Absent true emergencies, requiring parties to mediate before filing a lawsuit is the only way to make sure that businesses will have an opportunity to seek a mediated settlement without litigation. It is smart business to have a plan and planning for dispute management is very smart. Without Business Mediation Network’s  Mediate1st® clause, the party who is least willing to talk chooses the forum.

Using an impartial BMN Mediator with business experience to facilitate a deal is a far more businesslike way to resolve disputes than entering the strange world of litigation that is often hostile to business interests. Most parties eventually discover that fact, which is why only a tiny number of business cases actually go to trial. If it can be avoided, it is almost always a bad idea to litigate a business dispute – no matter how strongly you feel about your case.

8 Very Bad Reasons Why Businesses Litigate

If business lawsuits nearly always settle anyway, why do businesses litigate? There are eight very common and very wrong reasons – one or more of which is involved in nearly every decision to litigate a business dispute. Please follow upcoming articles in the Business Mediation Network Blog as we explain the “8 Very Bad Reasons Why Businesses Litigate.”

Paul Simon, the CEO and Founder of Business Mediation Network, is a business mediator, lawyer and educator.  For more, information see Paul’s Bio.  To follow the Business Mediation Network Blog – Sign Up Here.