Seven Myths about Litigation and Business Dispute Management

Posted: Monday, 1 March 2010 @ 14:42
Seven Myths about Litigation and Business Dispute Management

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There’s a lot of fear, cynicism and mistrust in business circles about lawyers, litigation and how to achieve effective resolution of business disputes. Getting to know facts from the myths is a good way of giving yourself some confidence in what can be a very unsettling set of circumstances.

Myth 1 – If I go to a solicitor for advice on a dispute, it will end up in court

Court proceedings are only one way of resolving business disputes, and are not always the best. Other ways of resolving disputes can involve negotiation (by correspondence, over the telephone or in a meeting), mediation (working with a neutral third party to broker a solution), or arbitration (asking a neutral third party to decide on the dispute). However, all these other methods involve a degree of cooperation between the parties.

The main reason businesses issue court proceedings is to force their opponent to take things seriously. Court proceedings cannot be ignored or judgment will be given against the Defendant. The court has the power to compel the parties to exchange documents and to set out their case precisely in formal statements and written evidence. Usually, this encourages parties to settle their case quickly and before a trial.

Usually the best solution is to combine 2 or 3 of the above methods.

Myth 2 – I will have to give evidence in a courtroom

This is very unlikely. People are only called into the witness box if there is a trial, and approximately 95% of business cases are settled without going this far.

Although the court will generally fix some hearings before the trial, the judge will decide on these decisions simply by reading the papers and hearing what the lawyers say - no evidence will be given in the witness box. These are usually procedural, where the judge decides what the Parties must do before a trial and when they must do it by. They can also include asking the judge for specific things such as an order for your opponent to let you have more documents.

Myth 3 – It will cost the earth

Court proceedings can be expensive, especially trials. The cost is spread out throughout the life of a case but the most expensive part is a trial, where 50% of the total costs can be incurred (another reason most cases don’t go to a trial).

Running a legal claim should be a project undertaken jointly between lawyer and client. The more work you can do, the less your lawyer’s costs will be. The way to keep your costs to a minimum is to ask your lawyer to set out what preparation you can usefully do yourself, rather than getting them to do everything.

Myth 4 – It will take years

It used to be the case that court proceedings could take up to 10 years! Nowadays, once court proceedings are issued, they are more likely to take between 1 and 2 years. However, a lot of work needs to be done before court proceedings are even issued and this in itself can take a considerable amount of time, but can often lead to a settlement at an early stage.

Myth 5 – Judges don’t understand real life; they won’t understand my case

Traditionally, judges came from a background of public schools, followed by Oxbridge and then into the cloistered world of the Bar. The Government has made a considerable effort to recruit judges from a wider range of backgrounds and experience. However, this will take time to filter through and make a big change.

Nonetheless, all judges are highly intelligent with the ability to grasp concepts quickly. It is the lawyers’ job to make sure the judges understand your case, which is done through written evidence, using expert witnesses and from what is said in court.

Myth 6 – Going to court is just a lottery

All judges must make their decisions in accordance with the law. However, often the judges have a high degree of ‘discretion’, which means they can make various decisions as long as they fit in with the evidence and are reasonable.

The key to winning a business case is documentary evidence. A judge cannot make a decision that goes against what the documents say.

Myth 7 – The judge will make my opponent pay for treating me this way

Yes and no. If you win your case, you will usually obtain compensation or damages. However, these are not designed to punish the offender. It is a sad fact of business life that, even if you win your court case, you will still be out of pocket in the sense that you will remain worse off than if the events that gave rise to the case never happened.

The real thing to consider is whether you would be better off fighting a case than if you had simply ignored it. The answer is usually ‘yes’ even when the costs and time are taken into account.

Getting to grips with both the facts of your case and the truth about how the legal process really works is essential for any business owner tackling a business dispute or facing the unpleasant prospect of litigation.

For detailed advice on any business dispute take advantage of our free initial telephone assesment by calling 0835 003 5639 or completing our online enquiry form.

Blog by Nigel Musgrove
Nigel has been providing dispute resolution advice as a solicitor for over 35 years. As well as advising SMEs and business owners on disputes he also offers a specialist licensing law service. View profile
Call Nigel on +44 (0)1285 847 001 or by email
This blog is not intended to constitute legal advice, nor is it intended to be a complete and authoritative statement of the law, and what we say might be out of date by the time you read it. You should always seek legal advice to confirm whether or how any information in this article applies to your particular situation. We offer a free telephone consultation to discuss your particular circumstances.

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