Tips for Avoiding Litigation in Business

Getting embroiled in litigation can cause great damage to your company, both in terms of massive legal fees and negative repercussions to the reputation of your business. As Benjamin Franklin said, an ounce of prevention is worth a pound of cure. It is best for your company to avoid getting sued or having to file suit.  

Here are some tips for avoiding litigation in business. You can talk with a South Carolina business attorney about how to implement these strategies in your company.

Be Proactive

Some business owners or managers think they do their job well if they respond to problems promptly. Actually, they would do their job better if they looked for potential problems and fixed them before they happened. This approach is similar to keeping your car well-maintained rather than waiting until you break down at the side of the road.

Listen to feedback and suggestions from your employees and customers. The compliments can be useful to analyze what your company is doing right so that you can try to replicate that behavior in other areas of your business. Complaints give you an opportunity to fix small problems before they develop into significant issues that could lead to litigation.

Return to the “Customer First” Model

In the past, many businesses operated under the principle of “the customer is always right.” Of course, the customer was not always right, but business owners would bend over backward to meet the expectations, however unreasonable, of the customer base. When the company made an honest mistake, it would go to great lengths to make it right.  

This approach avoided litigation and generated fantastic word-of-mouth benefits because the business got a reputation for treating its customers like gold. Going the extra mile might cost a little more initially, but the money it saves in preventing lawsuits and the money it makes for your company when it has an excellent reputation will be worth the expense. People do not tend to sue companies that treat them well.

Hire Carefully

If you make the mistake of hiring a difficult or litigious person to work for your company, it can be challenging to terminate the person’s employment without facing a lawsuit. You will want to perform a thorough background check before extending an offer of employment. You might not receive useful information from prior employers if they are concerned about getting sued by the job candidate. 

If you have legitimate concerns, think twice about hiring the individual. Always use a probationary period with new employees. Have the individual sign a document that gives you the right to terminate the employment during or at the end of the probationary period with or without cause. 

Use Alternative Dispute Resolution Methods

Mediation or arbitration can be useful ways of resolving disputes. These methods can be less expensive than full-blown litigation. Also, alternative dispute resolution can preserve the working relationship with the employee, vendor, or customer. 

Another option is to have a South Carolina business attorney negotiate a settlement of the claim against your company. You might be able to use any of these three methods to de-escalate the dispute and resolve the conflict amicably. Contact our office today for help with your case.