Litigation is an increasingly common risk for businesses of every size in Milwaukee. Thousands of civil and small claims cases are filed in the state each year, many concerning contracts and other commercial issues. If your business doesn’t have a strategy for handling business litigation, you could be putting everything at risk.
An attorney experienced in business litigation can provide significant insight into the types of cases you may face, as well as offering strategic guidance for your response. Understanding how business litigation functions can save cost and uncertainty.
Understanding the Basics of Business Litigation
Disputes between parties in business relationships and operations are not uncommon, often resulting in business or commercial litigation. But disputes over commercial transactions don’t always involve the courts because they can also be resolved through negotiation and mediation, usually saving time and money.
Having an integrated strategy for business litigation, including strong contracts, proactive arbitration clauses, and clear internal policies, can reduce the need for expensive and time-consuming court processes.
Internal vs. External Disputes: A conflict with a partner or an employee can also result in business litigation, draining time and resources away from your primary business goals. External disputes may involve vendors, nonpayment by a customer, or a competitor’s unfair practices.
A critical aspect of Wisconsin law to be aware of is the requirement that businesses be represented by legal counsel in litigation. That’s because businesses (including corporations and LLCs) are considered independent entities. Failure to respond to a lawsuit may result in a default judgment by the court.
Common Types of Business Litigation
Breach of contract. This is one of the most common types of dispute involving contracts of every type, from vendor agreements to employment terms, leases, and client services. If one party does not deliver, a legal claim can spur collecting damages or compelling action.
Employment disputes. Having employees frequently results in claims regarding wages, discrimination, non-compete clauses, and wrongful termination. These can be complex issues that span state and federal law, including Title VII, Fair Labor Standards Act, Family and Medical Leave Act, and the Employee Retirement Income Security Act.
Partner and shareholder issues. Multiple owner businesses can risk dissolution over internal disputes that result in business litigation. Issues range from profit distribution to business direction and fiduciary duties. Lawsuits by minority owners are common to enforce their rights.
Intellectual property disputes. Business assets that include trade secrets, copyrights, trademarks, and patents may be sources of disputes between competitors or in licensing agreements. A swift resolution is necessary to minimize disruption of business operations.
Breach of fiduciary duty. Misuse of funds, self-dealing, or other actions considered to be contrary to the best interests of the business by officers, directors, or key contractors are serious because they involve fiduciary duties. Litigation is often the remedy due to the discovery process which involves forensic investigation of money management.
Business torts and unfair competition. Torts are harmful actions arising from intentional or negligent actions that damage another business. Activity like colluding to cut a competitor out of the supply chain is a claim that is often taken to court.
Careful Planning Can Prevent Costly Public Litigation
Preserving your business’s bottom line is one of the reasons to proactively avoid business litigation. Another reason for strong contracts, policies, and arbitration clauses is preserving your reputation, which can suffer from prolonged public disputes. Consulting an experienced business law attorney from Kerkman and Dunn is an investment in your company’s future and a way to strengthen your company’s defenses against litigation. A strategic approach can save significant time and costs later. Call for a consultation that will provide peace of mind for the future.
