When Is the Best Time to Take a Business Dispute to Court?

Business Dealings

Often, alternative forms of dispute resolution such as arbitration or mediation are recommended over taking a business dispute to court. There are several reasons for this, but in some circumstances, litigation may actually be the preferred route. Here, we’ll go over how to know when it’s best to take a business dispute to court.

When to Choose Litigation Over ADR

In some cases, ADR may be less likely to provide the outcomes you need. Some situations in which litigation may be preferred include the following.

You need an enforceable verdict

Some scenarios may require a legally enforceable verdict. For instance, if you need the opposing party to cease from a given action (such as abusing your intellectual property, for instance), it’s hard to make that enforceable through arbitration alone. In those cases, having a court ruling may be what’s needed.

The other side refuses to cooperate

Mediation—and even arbitration to an extent—are only effective if both parties are willing to cooperate. If one party refuses to meet deadlines or show up to hearings, then ADR either won’t accomplish much, or it will become just as expensive a process as litigation.

Court mandates, on the other hand, are much harder to ignore, which can make litigation a more reliable option when the other party refuses to cooperate.

There’s a high chance of winning

ADR often allows for some give and take in its outcomes, but litigation is always a win-lose scenario. As such, it’s typically best reserved for when you have a high chance of winning your case. Otherwise, ADR is less likely to result in a massive loss.

You have a high-value case

Given the time and resources required to make sure a court case is successful, it’s generally best reserved for high-value cases. The more your case is worth, the more litigation might make sense.

Timing Litigation

Knowing when to escalate a business dispute to litigation can be a bit of a hazy matter. It often depends on your current circumstances, the nature of the dispute, and so forth. In many cases, it’s best reserved for when ADR has been attempted unsuccessfully.

It’s worth noting that a statute of limitations may apply to your case. As such, it’s best not to delay litigation once it becomes apparent that it’s a viable option.

Handling Your Business Dispute

While there is a time and a place for litigation, sometimes it’s best to avoid it altogether. Those include times when a valuable business relationship is on the line or if there’s a high risk of loss involved. Additionally, cases with little value are often not worth pursuing in a courtroom setting.

On the other hand, litigation can be a good way to secure your business’s interests. It’s all a matter of weighing the advantages against the disadvantages. Of course, not all of those may be readily apparent, which is where outside counsel comes in.

If you’re involved in a business dispute and think litigation may be an option, contact an attorney to advise you throughout the process. Hart David Carson LLP provides legal counsel, ADR services, and representation during litigation to businesses of all sizes, so contact us to schedule a consultation.

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