No business owner wants to deal with a lawsuit. Our business litigation attorneys can help reduce stress while delivering a favorable outcome focused on results.
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What is Business Litigation?
Business litigation seeks to resolve disputes that arise from business interactions through the court system. Those conflicts can stem from issues between businesses, companies, or individuals. Litigation covers various legal matters, including contracts, employment law, intellectual property, and partnership disagreements.
The primary goal of business litigation is to resolve disputes fairly and justly. Resolution can take the form of a court judgment or a settlement. Large and small businesses may be involved in litigation as either the plaintiff or the defendant. Navigating these legal battles requires a deep understanding of the law and strategic planning.
Our business litigation lawyers work with companies of all types -- from multi-national corporations to local start-ups. We also work with non-profit organizations in a variety of arenas. Contact our law offices in Doylestown, Norristown, and Wayne, PA. Our experienced business litigation attorneys can help guide you through complex business concerns through more commonplace contract disputes.
Difference Between Commercial and Business Litigation
People often refer to business and commercial litigation as the same thing. But they refer to different types of legal disputes. Understanding the differences can help you better prepare for and handle potential legal challenges.
Commercial Litigation involves disputes arising from commercial transactions between businesses. These disputes may include breach of contract, business torts, antitrust litigation, and more.
Business Litigation covers a range of concerns regarding the daily course of running a business. These may include commercial disputes. However, business litigation law also covers internal conflicts such as partnership agreements, employment, and intellectual property conflicts.
Business Lawsuits Happen Every Day
Unfortunately, business lawsuits are commonplace across various industries. According to recent statistics compiled by The Zebra, most businesses will face litigation. For example:
- Business litigation impacts 36% to 53% of small businesses annually.
- Roughly 45% of small companies are in litigation.
- 90% of all companies experience a lawsuit at some point.
- Small companies face 12 million contract lawsuits annually.
Some industries face litigation more frequently than others. These include construction, contractors, real estate, and technology sectors. Restaurants, farms, property management companies, child care centers, and landscapers also face concerns.
What's clear is that your odds of facing a lawsuit are a virtual certainty. You'll need a focused business litigation attorney for support at some point if you run a business long enough.
Some Common Causes of Business Litigation
Businesses face many lawsuits, from contract disagreements to employee disputes and claims of intellectual property theft. Business litigation lawyers can help devise the best strategy for handling disputes.
Here are some of the more common issues leading to litigation:
Breach of Contract
This is one of the most frequent causes of litigation. A breach of contract case occurs when one party fails to fulfill the terms of a contract. Business contracts are essential for business. Well-drafted contracts can minimize disputes over the interpretation and execution of contractual obligations.
Worth noting is that the statute of limitations for breach of contract claims is four years in Pennsylvania.
Employment Disputes
Employment disputes are sensitive and can impact a company's reputation and operations. Issues such as wrongful termination, discrimination, and harassment can lead to litigation. In addition, employment issues often involve state and federal laws, including the Pennsylvania Human Relations Act (PHRA). Working with an attorney comfortable at both levels is essential.
Intellectual Property Disputes
Protecting intellectual property (IP) is crucial for many businesses. Disputes over trademarks and copyrights can lead to lawsuits involving a business litigation attorney.
Partnership Disputes
Conflicts between business partners can happen over financial matters, business direction, and operational decisions. They can disrupt business operations and often lead to legal action.
Breach of Fiduciary Duty
A breach of fiduciary duty occurs when a professional betrays their trust. Fiduciary duty involves avoiding conflicts of interest and acting in another's best interest. Addressing these disputes requires both legal and business expertise.
To claim a breach of fiduciary duty, you need to prove:
- A fiduciary relationship existed.
- The individual violated the fiduciary duty.
- You suffered an injury from the violation.
Non-Compete Issues
Employment contracts contain restrictive covenants to protect employers should a critical employee leave to join a competitive business. The covenants help prevent employers from losing clients and having departing employees convey valuable inside knowledge or business strategies.
Pennsylvania courts enforce non-compete agreements if they are reasonable in scope, duration, and geographic area.
Non-compete issues arise when an employee agrees not to work for a competitor for a set period. These agreements can include restrictions, such as not competing with the company's clients after leaving.
If you encounter issues like these, you can gain some preliminary insights into how to handle a business lawsuit. You'll also want to consult a business litigation attorney near you to develop a defense strategy.
How to Avoid Litigation as a Business Owner
As you've seen, you face an uphill battle in avoiding litigation as a business owner. But you can take steps to reduce your risk.
Clear Contracts: Ensure all business contracts are clear, detailed, and legally sound. Any lack of clarity can lead to disputes, so it's crucial to have a lawyer review all agreements.
Legal Consultations: Regularly consult with legal professionals to stay informed about potential legal risks and changes in the law. Proactive legal advice can help prevent issues.
Employee Training and Policies: Implement training programs and create clear policies to address common workplace issues. Those policies can help prevent disputes related to employment practices.
Intellectual Property: Protect your business's intellectual property by registering trademarks and copyrights. First, this may help prevent disputes over IP. Second, you have legal recourse if an issue arises.
Compliance: Stay updated on industry regulations to comply with all legal requirements. This may help avoid regulatory disputes and potential fines.
You can gain even more insights by reading How to Avoid Lawsuits.
Alternative Dispute Resolution
Alternative dispute resolution (ADR) offers a way to handle business conflicts without using the court system. Business ADR programs excel at achieving flexible, cost-effective results. Equally important, they help retain business relationships. Pennsylvania encourages ADR to avoid legal action and reduce court burdens.
Two common ADR types include:
Mediation
A neutral third party (the mediator) assists the disputing parties in reaching a mutually acceptable agreement. The process isn't binding so that you can stop at any time. You can also elect to ignore the mediator's suggestions.
Arbitration
While mediation is somewhat informal, arbitration is more formal. It involves some elements of the court system, such as discovery and some rules of evidence.
In the process, sides present their arguments to a neutral arbitrator. The arbitrator reviews the evidence and renders a binding decision.
What's particularly appealing to business professionals is that the arbitrator is often an industry expert. So, they have more knowledge than a judge about potential issues and best solutions.
Business Litigation Attorneys That Get Results
It’s essential to have an experienced business litigation attorney by your side. Locally, our litigators work with clients in Bucks, Delaware, and Montgomery County. They also support closely held companies in the greater Philadelphia area. However, our scope extends to national and multi-national organizations throughout the United States.
Equally important, our experience includes disputes in state and federal courts.
As a business owner, it's almost a sure bet you'll face a lawsuit eventually. Having a law firm on your side is the best way to address it.
