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A notebook open to “Risk vs. Reward,” a pen, and a coffee cup on a marble surface.

The following article will cover:

  • The common pitfalls business owners make when evaluating risks versus rewards in litigation.
  • The impact of external factors on risk assessment.
  • Alternative dispute resolution (ADR) methods businesses should consider instead of pursuing litigation, such as mediation, and advice for businesses uncertain about pursuing litigation.

What Are The Common Pitfalls Or Mistakes Businesses Make When Evaluating Risks Versus Rewards?

A frequent misconception among business owners is viewing litigation as a binary outcome: total victory or complete defeat. Yet, most cases will settle — upwards of 99% of them. Two main pitfalls are:

  • Believing that their case will never settle.
  • Not taking the litigation seriously from the start.

Starting litigation with seriousness establishes a strong position, compelling the other side to recognize the strength of your case. This, in turn, facilitates better leverage during settlement talks. Conversely, when neither party is trial-ready, litigation becomes a costly endeavor, leading to unnecessary trials.

Are There Any Alternative Dispute Resolution Methods That Business Owners Should Consider Instead Of Pursuing Litigation?

Absolutely. Modern contracts frequently stipulate alternative dispute resolution (ADR) methods over traditional litigation. Mediation is a common ADR method, with options ranging from private mediators to court-ordered programs. If one party, especially in areas like Los Angeles, expresses interest in ADR, it often becomes a mandated approach for both sides. Hence, business owners shouldn't hesitate to consider ADR when appropriate.

What Advice Would You Give Business Owners That Are Uncertain Whether To Pursue Litigation?

The first step you should take if you are uncertain of whether to pursue litigation is to consult a legal expert and explain the complete scenario, inclusive of both positive and negative aspects. This allows the lawyer to provide well-informed advice. Additionally, business owners must manage their expectations regarding the timeline. For example, in places like Los Angeles, lawsuits can span over two years.

Of course, during this time, opportunities for settlement are continuous. As such, it's essential to be prepared for the extended journey, yet simultaneously remain receptive to earlier settlement possibilities. A seasoned lawyer can guide the process, but business owners should be mentally prepared for both swift resolutions and protracted battles. For more information on Risks Vs. Rewards In California Business Litigation, an initial consultation is your next best step.

Manavi Law Group, APLC - Beverly Hills, CA

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(310) 879-5616

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