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Protecting Against Business Lawsuits

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What is a Business Lawsuit?

A business lawsuit is any type of legal claim wherein at least one of the parties is a business organization rather than a private citizen. The term “business lawsuit” or business litigation usually refers to lawsuits between two businesses. 

However, business lawsuits can involve nearly every conceivable aspect of running a business, and can involve the following disputes:

  • A business suing another business
  • A business suing a private citizen
  • Private citizen consumers suing a business
  • Disputes between businesses and the government

What Kinds of Legal Issues do Business Lawsuits Involve?

Some common legal issues that are often involved in a business lawsuit may include:

Most business lawsuits involve one party seeking to obtain monetary damages for financial losses. However, business litigation may often revolve around the enforcement of an injunction. An injunction is a court order that either requires the business to cease certain activities, such as dumping toxic wastes.  It can also require the business to do something, such as enforce new hiring policies. 

What are Some Ways to Protect Against a Business Lawsuit?

There is no guarantee that your company will not be sued- in fact, over time there is a great chance that your business entity will face some sort of legal challenge. However, there are several steps that you can take to avoid legal entanglements:

  • Insurance: Having insurance can often help your business avoid unnecessary pay-offs to consumers or other businesses
  • Policies: Effective company policies should always follow the law. This can help your company avoid being held liable for the actions of employees. Have a lawyer draft these for you- they are familiar with the laws, as well as the various concerns that employees, consumers, partners, and competitors may have.
  • Corporate Compliance programs: These provide evidence that your organization is taking active steps towards complying with the law.  In some case, participating in corporate compliance programs can provide insulation from criminal liability

Should I Hire a Lawyer Before I am Faced with a Business Lawsuit?

Sometimes it is actually necessary to hire a lawyer even if your company is not facing a business lawsuit. In fact, it can be unwise to try to handle business matters without obtaining legal advice at the same time.

For example, let’s say that you have drafted a company policy. If the policy contains discriminatory language, you can almost definitely count on being sued in the future. An experienced business lawyer will be able to spot such potential pitfalls so that you can make the corrections early on, before it’s too late.

Working with a lawyer before you are sued might be the best way to prevent a business lawsuit in the future.  Your lawyer can help ensure you are in compliance state and federal laws, and can help identify problem areas that might arise in the future.

Photo of page author Ken LaMance

, LegalMatch Law Library Managing Editor and Attorney at Law

Last Modified: 07-18-2013 02:16 PM PDT

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