Business litigation is a specialized form of law that has anything to do with a business dispute. Litigation is the process of having a dispute resolved in a court of law or in some other formal legal proceeding. An attorney who specializes in business litigation handles the claims or the defense of business entities that are in a legal dispute or that have been accused of wrongdoing.
As with any litigation attorney, attorneys who specialize in business litigation must be versatile, resourceful, and good negotiators. What sets a business litigator apart from other litigators is the business litigator must be comfortable with complex financial and business issues. Handling business litigation frequently involves a significant amount of business and financial documentation that the business litigation attorneys must review and analyze. Expert witnesses with expertise in accounting, corporate governance, securities, and the client’s industry are usually required to help present the case in court.
As part of a business litigation attorney’s responsibilities, the business litigator will engage in settlement negotiations with the opposing parties to settle the dispute out of court. The business litigator will also have to appear in court on behalf of the business client, conduct and defend depositions, and handle all aspects of a courtroom trial if the case cannot be settled.
Types of Cases Litigated in Business Litigation
Business litigation can be extremely varied, highly technical, and complex. Common types of cases and issues that require a business litigator include:
Breach of Contract
A common business dispute arises when one party accuses another of failing to adhere to the terms of a business contract. The contract could be for the sale of goods, which may be covered by the Uniform Commercial Code, or the dispute could be about a real estate construction project. These are highly specialized areas of law that require knowledgeable assistance of counsel.
Breach of Fiduciary Duty
Disputes may arise when a shareholder of a corporation accuses the corporation and one or more of its directors of breaching a fiduciary duty to the shareholders. Depending on how widely held the shares of corporate stock are, the case could involve multiple plaintiffs. In some cases, the number of shareholders/plaintiffs could be so voluminous that the case could become a class action suit. Class action cases involve special litigation procedures that require a class representative to be appointed. Attempts to identify and notify all members of the class and give them an opportunity to opt-out of the suit is required.
In business litigation, fraud cases often include an allegation of breach of fiduciary duty. The facts frequently support a claim for both. An example of when this could happen is in the context of a bank investment manager accused of investing the plaintiff’s funds in a company controlled by the bank. The investment manager would have a duty to inform the bank’s clients of the conflict of interest and either waive the conflict or to move their funds to another manager. If a client experienced financial loss as a result of the investment manager’s actions and was not allowed to move funds to another manager, the plaintiff could claim that the bank or the bank’s investment manager engaged in self-dealing and failed to act in the best interest of the bank’s clients.
Trade Secret Disputes
Laws that protect a business’s trade secrets protect businesses against the unauthorized commercial use by others of technological and commercial information. The policy in support of trade secret protection encourages research and development by protecting the originator of business information. Additionally, trade secret protection is intended to encourage and maintain proper standards of business ethics. Note that trade secret protections do not grant the trade secret owner an exclusive right to the information. The protections only guard against someone profiting from improper acquisition or use of the information. Others are free to discover your trade secret using any fair means.
When a conflict arises between partners in a partnership, the dispute can threaten the viability of the partnership itself. An experienced business litigator can help the partners resolve the conflict and perhaps salvage the business. If that is not possible, the litigator can make sure the partners comply with the partnership agreement and take the necessary steps to dissolve the partnership without the need for costly litigation.
Alternative Dispute Resolution
Not every business dispute needs to be tried in a court of law. Business litigators know that the least costly way to reach a fair resolution of a dispute is to submit it to mediation or arbitration. In mediation, a neutral third party serves as a “go between” to steer the parties to a settlement. In arbitration, an arbitrator makes a legal judgment after hearing both sides of the dispute. In either method, the neutral third party is often a specialist on the subject matter in dispute, such as securities law, labor and employment, insurance, banking, or construction, to name a few specialty areas.
Malpractice or Professional Negligence
When a professional individual commits malpractice, it could give rise to a malpractice case (in the case of doctors and lawyers) or professional negligence (in the case of businesses such as real estate professionals, licensed contractors, and so forth). Business litigation attorneys occasionally have to defend the individuals or their businesses against claims resulting from damages allegedly caused by their professional errors or malfeasance.
When a business engages in wrongdoing in connection with a consumer product, the business customers may assert a claim against the company. The claim could be based on a breach of a warranty or sale of defective consumer products. If the business violated a law in some way, its customers, competitors, or others injured by the business’s illegal activity might file a lawsuit against the business. The business will need a business litigation attorney to defend it against the claims, pursue any available remedies against other parties, and generally represent the firm’s rights and responsibilities.
Contact Roy Banerjee, Business Litigation Attorney at KPPB LAW for assistance
A business dispute can be complex and costly if not handled correctly. You need an experienced business litigation attorney to help you resolve it in a way that makes business sense. Speak to Roy Banerjee, a seasoned business dispute and litigation attorney at KPPB LAW for more information about your case.