Tuesday, October 19, 2010

Do you know? Litigating disputes in court does not always make business sense

I believe that litigation is the worst possible way to settle disputes. This may come as a shock, considering that I am a litigator and trial lawyer. Consider, however, that when you decide to litigate, you resolve to pay me six figures for the following: to prepare and respond to discovery requests, produce and review documents, prepare for, take, and defend depositions, draft and respond to motions, and prepare for a trial that has less than a 5% chance of ever occurring. You also resolve to have years of your life and the lives of your employees sucked up by document productions, depositions, reviews of letters, pleadings, and motions, and court appearances. All the while, I’m also dealing with obstreperous opposing counsel (which drives up your cost even more) and an over-taxed court system that likely lacks the time, resources, and manpower your case deserves. In other words, in many cases you are tossing good money after bad. It’s my job to appropriately counsel you so that does not happen.

There are lots of cases that have to be litigated to be resolved. A (small) percentage of them will even need the wisdom of a jury of our peers to conclude. When a plaintiff makes a settlement demand many times in excess of what it will cost you defend the case, litigation makes sense. When the future of your business hinges on an outcome (such as a key employee’s theft of trade secrets), litigation makes sense. When an employee did something horrifically wrong causing the termination, and you cannot in good judgment pay that employee any amount of money, litigation makes sense.

Litigating on principle, though, is not preferred. When ex-employee accuses you of bigotry by suing you for discrimination, your natural inclination is to roll up your sleeves and fight to defend your name. In many cases, that inclination is wrong. You are running a business, and litigation should be treated as a business decision, not an emotional decision. Emotional decisions cost money, and end up as headlines in your local newspaper.

Steve Strauss, writing at USAToday.com, offers businesses this advice: “Not every dispute is a litigation-worthy dispute. Even in the best of cases, you should think that your odds of winning are 50-50. The judge may say yes, or she may say no. The jury may find in your favor, or not. It's 50-50. Of course some suits are better than others, but you just never know what a judge or jury will do.” He is right when he says when you litigate “you are playing with fire and if you are not careful, you will get burned.” Keep these ideas in mind in your next employment dispute. They will lead to a reasoned business decision, not an emotional one.

Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.