FAQs

FAQ: What is Commercial Litigation?

Commercial litigation is a broad term used to describe any disputes that arise in a business setting. If the parties cannot settle their dispute on their own, they may turn to litigation to solve their business controversy. The injury suffered may be anything from a business relationship that is beyond repair, to a disagreement during a business transaction that cannot be resolved. Some other examples of types of commercial litigation include disputes over employment issues, business dissolutions, antitrust and antitrade proceedings, corporate fraud claims, breach of contract actions and debt collection issues. This is a sampling of types of claims, the scope of commercial litigation is very broad and can encompass both simple business related disputes and complex transactional matters (and everything in between).

If you have a business dispute and are thinking about litigation, there are factors you should consider before filing a claim with the court. It is important to speak to an attorney to discuss your possible claim and weigh your options prior to seeking litigation as well. Some factors to consider are the parties implicated in your business dispute and the sum of money at issue in the dispute. Accordingly, if the other party involved in the dispute is someone you would like to have a future business relationship with, litigation may not be the most appropriate choice. Prior to entering a lawsuit, you may want to try to resolve your issues amicably. You may even consider mediation or arbitration as possible solution to save your business relationship (if that is a concern). You will also want to consider if the other party has means to compensate you if you do go to litigation and succeed in your claim.

Correspondingly, it is important to consider the amount of money involved in the dispute. In a commercial litigation lawsuit, each party will usually have to pay their own legal fees and costs, this includes attorney’s fees and these fees can add up during the resolution of your case. Litigation is often time consuming and costly, so make sure that the end-result is worth the expense. Alternatively, you may have other (non-monetary) reasons for pursuing a commercial litigation claim. Perhaps your dispute involves an important legal issue that must be resolved for the benefit of continuing your business, or your business’s reputation is at stake. These types of factors may outweigh the legal costs you may face and are important to consider when deciding if litigation is the best option for you and your business.

If I Have a Business Dispute, Is Litigation the Only Option?

If you have a business dispute, you may weigh the pros and cons and conclude that litigation may not be the most beneficial choice for you. Other options may be less time consuming and less costly. The most commonly used alternative to litigation is Alternative Dispute Resolution (ADR), many courts are even starting to require parties to go through ADR before pursuing litigation for their business issues. There are two ADR processes, mediation or arbitration. Mediation is a process where the parties meet with a trained neutral third party (licensed mediator) to resolve their issues and reach a settlement agreement. This process is nonbinding on the parties and the agreement is reached solely by the parties, not decided on by the mediator. If an agreement cannot be reached, the mediation concludes.

Similarly, arbitration involves a meeting between the parties and a neutral third party (arbitrator). However, in arbitration, both parties present their sides to the arbitrator and he or she makes a decision based on the evidence the parties have presented. The arbitrator’s decision is binding on both parties and may be enforced by the court. This process is similar to litigation; however, it is more information, less costly and less time consuming. If you have an ADR clause in your business contract or are considering options alternative to litigation, speak to an attorney to answer your questions and help you determine your best option.

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