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Guide To Business Litigation

I have represented a lot of successful businesses and business people in my career. Unfortunately, because of their business success, I occasionally gave them too much credit when it came to legal issues. Things that seemed obvious to me were not always obvious to them. I decided, therefore, to create a list of key things that every business person should understand about litigation. The goal is to help them maximize the chance of a successful outcome if they become involved in litigation.

The entries follow the basic chronology of most litigation.

  • Be aware that every communication and every document you write may be subject to discovery in the future. In the context of litigation, an opposing party is generally entitled to all evidence that is “reasonably calculated to lead to the discovery of admissible evidence.” That can include your e-mails, chat records, and your telephone records, as well as your traditional oral and written communications. The fact that your e-mail communications are made on your personal e-mail account or that it is a web account does not change things. Opposing parties are frequently allowed access to such documents and there are usually ways that they can be retrieved.

  • Consult an attorney before making decisions with legal implications. Litigation is the best example of “an ounce of prevention is worth a pound of cure.” By trying to avoid spending a couple hundred dollars to obtain legal advice before entering into a transaction, many clients end up spending several thousand dollars dealing with the consequences. If you do not have an attorney acquaintance from whom you can get legal advice for a reasonable fee, you should get one.

  • Don’t provide an opposing party with ammunition. In certain types of litigation (like closely held corporation disputes) it is not uncommon for one party to exercise some sort of self-help that is inappropriate. For example, the party controlling the checkbook may stop making payments to others or stop providing information that is otherwise required. For parties who end up in litigation, it is very bad to be the party that acted childishly. That being said, it is almost as bad to respond with behavior that might be seen as equally inappropriate. In the end, any dispute that resembles one between Bart and Lisa Simpson is likely to result in a judge who provides relief to neither party.

  • Be completely honest and candid with your attorney. Many litigants believe that they are doing themselves a service if they can convince their own attorney of the rightness of their position. In fact, the weaknesses in any party’s case are almost always known to the other side and will be brought out at the most inopportune time. If your attorney has no knowledge of those issues, there is nothing that can be done to avoid or anticipate the result.

  • Do not discuss your case with anyone in situations not covered by the attorney-client or other privilege. You may think that you can tell the details of your case to a friend or confidant with complete confidence that your trust will never be betrayed. The problem is that the information will be discoverable regardless of whether the friend ever says anything. At your deposition, you will probably be asked to disclose all of the people with whom you have ever discussed the case. Unless you choose to lie (which is a really bad idea), you will then be forced to disclose that you discussed the facts with a friend in a non-privileged conversation and you will then be forced to disclose the substance of that conversation. As an aside, prefacing your conversation with your friend by saying, “This is privileged, right?” does not make it privileged.

  • Create a separate file for Attorney-Client Communications. At some point, you will be asked to produce all documents relating to your dispute. Sometimes, the easiest way to comply is to turn over large groups of files rather than culling through them for relevant documents. You can obviously pay a law firm to read through every document to locate those that are privileged, but you would be wise to keep those documents separate from the outset. Unintended disclosure of privileged communications can be damaging to your case.

  • Be responsible with respect to deadlines. An attorney should apprise you of the relevant dates in your case and should give you instructions as to the time to comply with various requests. An attorney is not, however, a reminder service. You are responsible for meeting the requirements. Failing to respond or comply on a timely basis can, in itself, be fatal to your case. At best, it results in a situation where your attorney has to seek an accommodation from either the opposing counsel or the court, and both situations put your attorney at a disadvantage.

  • Be thorough when responding to discovery requests. Parties who are defendants to lawsuits are particularly unwilling to spend the time to produce full and accurate responses to discovery requests. The consequences, however, are frequently detrimental. For example, documents that might be helpful to your case may be excluded if not produced on a timely basis. While your attorney may make a strategic decision to restrict discovery as much as possible, that is not a decision for you to make on your own. Furthermore, destroying documents – either before or after litigation is commenced – may result in a finding by the court that such documents did contain negative information, and the inference is frequently worse than the reality.

  • Be aware of courtroom decorum. Going to court is not like going to a meeting. Court usually does not wait for clients to arrive. Furthermore, you do not bring coffee into court, wear baseball caps, or sit in the gallery talking or texting during the proceedings. If your cell phone rings while court is in session, you may as well give up.

  • Hire an attorney you trust and then follow the attorney’s advice. If you needed brain surgery, you would not tell the surgeon how to proceed. People who try to prosecute their own litigation almost always lose.

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