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Litigation – Risks and Rewards
To litigate or not to litigate? Litigation management has become an integral part of success and failure in every business. One needs only look at the headlines to see the impact of properly, or poorly, managed litigation: General Motors battle to deal with the defective ignition switch recall, municipalities struggling to manage financial shortfalls and potential bankruptcies, privately held businesses protecting their proprietary products and processes, and business partnership disputes spiraling into failure for all involved. Litigation is not just for the “big boys” anymore – even the smallest privately held business must learn to navigate litigation risks or face their demise.
When a business or individual faces damages due to the acts of a third party, a common knee jerk reaction is often – “I will sue them and they will pay! Certainly any judge and court in the land will see that I am right and they are wrong!” Alternatively, one may be brought into litigation unwillingly through the acts of another. Managing the effects of litigation on the organization is a serious matter that should be evaluated with insight and thought from trusted, experienced advisors. Many businesses don’t have the luxury of in-house experienced litigation attorneys, forensic accountants, or economics professionals to steer the ship through these rough waters. Finding the right professionals to help you navigate this complex area, will determine success or failure of the outcome.
Evaluating the merits and risks of litigation should be done carefully and methodically. Once you are involved in litigation – either as plaintiff or defendant – your advisors should periodically evaluate the pros and cons of continuing on the present path. You should be prepared to change direction as the case progresses. Important questions along the way need to be answered: How can we prove our claims? How will the opposition try to invalidate our claims? What is the likelihood of a favorable judgement? What will the financial cost be to pursue or defend the matter? Is the opposition collectable if we win? What will it cost us in legal and expert fees to prove our case? What will the Impacts be on the operations of the business, will it distract us from pursuing our business goals? How will the litigation affect the management team? All of these questions and risks can be managed to a successful result with the right team in place. Proper management of actual or threatened litigation needs to be proactive and persistent to ensure a positive outcome for your business. It should be taken as seriously as product development, sales and any other key business process.