Staying Out of Court
In all but the most extreme cases, you want to avoid
going to court either as a plaintiff or a defendant. Courts
offer uncertain outcomes. Even if you are right and see
the situation as clear-cut, you can still lose your case.
The uncertainty of the outcome can be exacerbated by
the timing of the outcome. It is difficult to predict
how long a court case will last. While a small claims
hearing might not take years, the possibility of any other
type of case lasting that long is quite real.
If you suspect that you might eventually be forced to
pay out a settlement, you might get lulled into delaying
the end of a court case. But remember that you need to
disclose outstanding suits in your financial statements,
and such disclosures may affect your ability to borrow
or raise cash. Also, settlements can be subject to interest.
The best way to stay out of court is to avoid problems
before they occur. Run your business within the law. Run
your business with humanity. Develop good, solid employment
policies, especially in the critical areas of hiring,
promoting, firing, and sexual harassment.
Use contracts whenever appropriate, with all the key
details spelled out clearly in writing. And include in
your contracts, whenever possible, a proviso that directs
all disputes into binding arbitration, not court.
Consult an attorney whenever you have questions about
employment or business decisions that may portend a legal
risk for you. Spending a few bucks for a half of hour
advice here and there is certainly worth saving the major
expense of a court battle.
In many potentially litigious situations, an early response
may avert a legal suit. Often legal claims arise out of
misunderstandings, which good communication can alleviate.
For example, if you have decided not to pay the full
bill invoiced by a supplier because the quality of the
goods delivered was not satisfactory, call the supplier
with your complaint immediately. Back up your verbal communication
with a letter to that same supplier. You need to get the
vendor to see the quality issue from your point of view
and instill empathy for your situation.
Similarly, if a customer is not happy with goods supplied
by you, handle the situation as soon as possible. By listening
to that person’s complaint, trying to understand
the problem from his or her point of view, and showing
empathy for the situation, you have gone a long way towards
avoiding a legal suit.
If an employee complains about sexually hostile behavior
in your workplace, promptly take action to eliminate the
behavior. This may satisfy the victim and keep you out
of court. Even if the case does end up in court, your
attempts to correct or alleviate the problem will count
in your favor.
A face-to-face settlement meeting with the opposing party
can help avoid the courtroom. Any such meeting should
be conducted on a peer-to-peer basis. This means, for
example, company president to company president. Of course,
if you are the sole proprietor of a company and the other
party is a large established business, don’t expect
their president to meet with you in person. But do insist
on meeting with someone in as similar a position to yours
If you encounter problems in attempting a settlement
with another party through informal meetings, try a more
formal approach. Try meeting in a neutral location with
attorneys for both parties in attendance.
The presence of attorneys signals confidence. It sends
the message that both you and the disputing party are
willing to pursue the matter through the courts if necessary.
Through such a meeting you will be able to ascertain the
strength of the opposing party’s claim or defense,
and hear his or her arguments much as you would should
the case go to court. Of course, the opposing side will
be able to size up your case or defense as well.
If you can’t resolve an issue with calls or meetings,
consider binding arbitration. In this case, both parties
agree on an arbitrator (often a retired judge arranged
for through an arbitration organization) and agree that
the results of the arbitration will be binding and may
be entered into the prevailing court. Be sure to get the
agreement to arbitrate in writing.
There are exceptions to avoiding or delaying an appearance
in court. Sometimes you will want to get there as quickly
as possible. If your rights as a small business owner
are being trampled on by a large corporation, think about
going for it. Corporate giants typically figure that a
small entrepreneur will back down because they don't have
the funds to do legal battle or will agree to the first
settlement offered, no matter what the conditions are.
You need to be absolutely sure that you want to pursue
your claim through to resolution before you file with
the courts. Have your attorney advise you. Find out what
the costs might be, what the time element might be, and
what the various outcomes, good and bad, might be.
By Source Streetwise Business Tips