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Five Ways to Protect Your Business From Damaging Litigation


For businesspeople, it is clear that being sued can be expensive, time consuming and stressful. Even if you manage to win the case, your business operation can be disrupted and the costs will surely outweigh any gain. If you lose, you may end up needing to pay the winning side a huge sum of money to the other side. For this reason, it is much better for you to avoid being sued. Here are things you should do:

  1. Use professional contact agreements for everything. None of your work can be completed well, if you don’t have a contract. With a good contract, the scope of terms and conditions will be clearly defined. Controversy and misunderstanding may emerge if you have vague details in your contract, which may lead to litigations.
  2. Document and track changes: If changes are poorly documented and tracked, they can be the source of disputes. If any change is detrimental to a group of people, proper documentation will allow you to find better solutions. Because it is essential to document changes meticulously, you may need a person or two who track changes each day and make regular summaries, such as weekly or monthly. In any business operation, you may easily lose track of the changes. These records should have great values in defending against possible legal claims.
  3. Check progress: Business operations are not meant to be perfect. However, you can be free of the possible obligations by checking current progress. Continuous monitoring should allow you to find and correct errors. Your company should have a strong system for discovering and correcting errors. If left unaddressed for too long, these errors could become serious product defects or service malpractice, which increases the risk of litigation by consumer.
  4. Communicate with clients: There are cases of businesses being sued by clients or consumers due to unresolved dissatisfaction and discontent. When communicating with clients, many issues can be discussed, such as lateness to meetings, missing deadlines, failure to return emails, unavailability to telephone and others. In this case, you need to make sure that clients can be informed at all times. Discontent can be a background for any legal problem. If clients and customers are kept happy, there will be little to no risk of litigation.
  5. Recognize potential disputes: Eventually, issues and disputes will arise, because we can’t force people to have identical opinions and decisions. Any potential dispute should be recognized early enough, before they develop into real problems. Managers should always deal with complaints in the most appropriate way. Advices from solicitors who understand about existing laws should be sought, before these issues escalate. Despite your efforts, some issues will eventually arise. Because you are prepared for them, it would be easier to quickly deal with them before they develop into real problems.

No business can achieve perfection, but with common sense and precaution, it’s possible to prevent most, if not all potential legal problems. Even if legal problems do arise, you should be able to minimize their impacts.