How to Avoid Litigation

“The first thing we do, let’s kill all the lawyers.” Shakespeare, Henvy VI

Meeting new people at a cocktail party and telling them that I’m a lawyer frequently generates a scowl. The experience that most people have had with lawyers is in connection with their divorce or a lawsuit. In either case, it was rarely pleasant and usually very expensive. I explain that I don’t sue people. In fact, among my primary goals is to help my clients avoid litigation.

Although litigation cannot always be avoided, the following steps may reduce your chances of being involved in litigation:

1. Most importantly, evaluate the company or person with whom you will be dealing. Check his background, reputation, credit and litigation history. The best way to deal with a “problem” person is to avoid dealing with him.
2. Have a clear understanding of the agreement between the two of you, including all material terms. A clear mutual understanding of the deal and managing both parties’ expectations are critical. Once you have arrived at a deal, have all material terms clearly written in a contract. In addition to the obvious deal terms, consider what could go wrong and address what the consequences should be. Provide contingencies for how to proceed if a dispute arises. For example, provide for mediation or arbitration, rather than litigation, to keep down costs and obtain a quicker resolution. Most disputes and litigation arise from misunderstandings, lack of communication and unreasonable expectations.
3. If a dispute arises, don’t immediately get agitated. Think and act logically and reasonably. Review the facts. Don’t take the dispute personally. Put yourself in the other party’s shoes and try to understand his viewpoint. Review the contract to determine whether the contract addresses the facts or issues. You may find that it is you, not the other party, who is not complying with the agreement.
4. Talk with the person with whom you’re having the dispute. Although it is common practice today to communicate by e-mail, there are pros and cons in doing so; sometimes a good result is best achieved by a face-to-face meeting or a telephone call. Prepare for the conversation. Gathering relevant facts and documentation. Outline the issues, your positions and potential solutions. Anticipate the other person’s potential responses, so that you are reasonably prepared to respond to them. Your approach and communication style should generally be cordial, not contentious. You are more likely to achieve a better result through preparation and cooperation.
5. Hopefully the dispute can be resolved by a mutual understanding of the others’ positions and needs and mutual agreement to a win-win solution. Although parties’ starting positions may be in conflict, each party’s actual needs frequently are not in conflict and an amicable win-win resolution can be achieved. Even if the parties’ actual needs are in conflict, a reasonable resolution may be achievable through compromise.
6. If the dispute cannot be resolved amicably, you must decide what your next step is. Your options will vary, depending upon the facts and context. However, it is important to fully consider each of the available options and their practical, political and legal consequences.