Business has two priorities. One – to make money. Two – not to lose money. As a general statement the problem with many companies we have worked with is that the first is often at the expense of the second. We totally understand the reason for that, not least is it feels more compelling to focus on the positives and not the negative. The problem is that legal claims are highly damaging to business and can easily extinguish all commercial advantage.
Being Litigation Ready™ means being prepared to go to Court, whether to defend of bring a claim.
To be in the state of readiness a business needs to first consider where risk events may arise and how these would be dealt with.
For intellectual property businesses the concerns are the effective management of their IP portfolio (registrations) and exploitation (licenses). For non-IP orientated businesses threats may come from regulation and contracts.
What all business problems that morph into commercial disputes have in common are people and documents, and both of these are fundamental to a successful claim or defence.
Once we have assessed with a company where risk to the business can arise we make recommendations as to internal and external communications, record keeping, and document controls. Communication controls are assessed on a case by case basis and are tailored to what we see in the business.
In essence it is about not being sloppy and making sure that as disputes germinate people within the business are not compromising the legal position, and only the right people in the business are communicating with the counterparty as things heat up. This may sound common sense but in practice it rarely happens. Casual admissions are made that once out the bag cannot be put back. Records are incomplete and emails passed without proper protection or consideration.
We also look to effective document control so that the business knows where its material documents are and that it controls the approach to contract negotiations and subsequently. Since all relevant documents whether for or against a case will be disclosed to the other side in litigation we discourage surprises.
We also check and review the jurisdiction clauses because these will determine where the case is heard and can affect enforcement options. We consider whether arbitration clauses suit the business best or not. Too often these are easy giveaways in contract negotiations but they cut to the heart of business risk.
Are you Litigation Ready™?
Prudent companies ensure they are Litigation Ready™. Of course that does not guarantee success in litigation but it significantly increases the probability.