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What is business litigation?

Business litigation involves legal disputes where parties either sue or are sued. Cases typically involve two key components: liability, determining who caused harm, and damages, addressing losses incurred. Success in a case requires both liability and damages to be proven. This is accomplished by the Court applying legal principles to relevant evidence, which can include documents and witnesses. Evidence is crucial for substantiating claims and without it, a party’s case is weakened.

Business litigation encompasses various types of cases, such as breach of contract, construction liens, and shareholder disputes.

Business litigation cases typically progress through three stages:

  1. Pleadings: Each party presents their side of the story through a Statement of Claim or Defence;
  2. Discovery: Relevant documents are exchanged, and each party is questioned by the opposing party’s lawyer; and
  3. Trial: Both parties present their stories, evidence, and legal arguments to the Court.

Unfortunately, business litigation is characterized by slowness, unpredictability, and high costs:

  • Time-consuming: It can take two to three years to bring a case to trial.
  • Unpredictability: Courts often have discretionary powers in applying legal tests to the facts of a case.
  • Expensive: The winning party usually only recovers half of their legal fees from the losing party.

Practical tips to prevent business litigation

To avoid business litigation, consider implementing the following strategies:

  • Put important matters in writing: Utilize written contracts that have been reviewed by a lawyer before signing. These contracts should address potential practical issues that may arise during the contract’s performance. Additionally, document important conversations with follow-up emails to confirm agreements reached.
  • Seek legal advice early: If a dispute does arise, consult with your corporate lawyer promptly to understand the legal implications of your business decisions.
  • Pursue reasonable business solutions: When feasible, strive to find mutually agreeable resolutions that align with your legal obligation to minimize losses.

Following these tips can help prevent disputes from escalating. However, if resolution remains elusive, adhering to these practices will strengthen your case.

If you have any questions about the information contained within this article or any other business litigation questions, you can reach out to the author, Cole Vegso, at [email protected] or any lawyer in the Commercial Litigation department.

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