Civil or Commercial Litigation?
Civil litigation is the generic term used to describe the vast majority of lawsuits that are filed in the Court system (non-criminal). Civil litigation generally involves a dispute between two or more parties, seeking to enforce or defend a legal right. In many of these cases, the plaintiff is seeking compensation in the form of money damages from the defendant, however, some civil lawsuits seek injunctive relief—to force another party to do or refrain from doing a particular act. Many different types of lawsuits fall under the broad umbrella of civil litigation. When civil disputes involve businesses or companies, the lawsuit is generally described as “commercial litigation.”
Types of Commercial Litigation
There are many types of commercial litigation, including the following:
- Aviation Disputes
- Breach of Contract
- Breach of Fiduciary Duty
- Business Torts
- Class Actions
- Employment and Labor
- Fraud and Misrepresentation
- Insurance Coverage
- Intellectual Property and Patent Infringement
- LLC Member Disputes
- Negligence and other torts
- Partnership Disputes
- Privacy, Cybersecurity and Data Breach
- Product Liability
- Real Estate, Land Use and Environmental Litigation
- Restrictive Covenant
- Securities Litigation
- Shareholder Disputes and Derivative Actions
- Tax Disputes
- Trade Secret and Unfair Competition
The above is not an exhaustive list of the types of commercial litigation. Instead, it merely highlights some of the more prevalent types of disputes that can arise in the business context. Commercial disputes among or involving companies arise with increasing frequency in today’s business environment. Because business disputes can quickly escalate, it is important to map out a strategy at the outset of any case, regardless of whether the party involved is a plaintiff or defendant. This involves setting specific goals and managing the party’s realistic expectations. In doing so, it is necessary to understand the different possible outcomes and probabilities of success. The definition of a successful outcome, however, varies from situation to situation and company to company, depending on the company’s particular objectives.
The Commercial Litigation Process
Find a detailed overview of the Commercial Litigation process here.
Alternatives to Litigation
Alternatives to litigation are heralded as saving time and expense, but they may not result in a final resolution of the dispute. The desirability of these alternatives should be evaluated early on, as there are both benefits and detriments.
It is generally wise at the outset of any court proceeding to review the potential for an out-of-court settlement. Indeed, a surprising number of matters settle before reaching the trial stage. Settlement can be discussed by any party at any time during litigation and is often a cost-effective alternative to trial. With certain exceptions, the court does not require the parties to discuss or attempt settlement, however, if the parties are amenable to discussing settlement most courts today have procedures by which a party can request the court’s assistance in a settlement.
Alternative Dispute Resolution
There are two common options for resolving a dispute if a party does not wish to go to court. They are mediation and arbitration.
Mediation is a non-binding process through which parties to a dispute may wish to see if the dispute can be resolved. While the parties may be able to negotiate a settlement without outside help, it is far more common to involve a neutral third party, known as a “mediator.” The mediator’s job is to assist the parties’ settlement efforts. The parties will jointly select the mediator, who meets privately with each party to discuss the strengths and weaknesses of each side’s case. The mediator’s role is, in part, to help the parties identify the risks of the case and encourage them to consider how those risks can affect their goals. The mediator does not have the power to force the parties to agree on a settlement, but may be persuasive in helping them reach a compromise
Unlike mediation, if the parties elect to go to arbitration, the decision will be binding. Arbitration is an adversarial proceeding which more closely resembles a court proceeding. In an arbitration, the parties select a neutral third party, called an “arbitrator,” to resolve their dispute. In arbitration, as in a court proceeding, the parties present evidence and argue the case to the arbitrator, who then decides which party wins. The process is not as lengthy and is less formal than a court proceeding. Arbitration often arises from a private agreement, but many courts also require the parties to smaller disputes to explore arbitration as an alternative. Parties who agree to settle their dispute using binding arbitration often cannot appeal the arbitrator’s ruling to a court.
How Commercial Litigation Differs from Traditional Litigation
Commercial litigation generally progresses the same way that other civil litigation matters do. The commonalities include: retaining an attorney, conducting factual investigations, researching applicable law, sending demand letters, engaging in settlement negotiations, filing suit, conducting discovery, participating in motion practice, trying the case before a judge or jury, filing post-trial motions, and so on.
Commercial litigation is different from most other civil lawsuits by virtue of the involvement of businesses rather than individuals. Because the issues involved can be specialized and typically more complex, both factually and legally, the processes may be different. If jurisdictional thresholds are met, many times, commercial litigation plaintiffs may prefer to file their cases in federal court, rather than state court. Sometimes, these cases may involve class action claims or multi-district litigation. Additionally, commercial litigation can take many twists and turns and may persist far longer as compared to other types of civil litigation. Commercial litigation also can be more expensive due to the costs of discovery, particularly e-discovery, and the costs of forensic experts.
Specialized Counsel for Litigation
When a business faces litigation or the threat of a lawsuit, seeking the advice of an experienced commercial litigation attorney early in the process is critical. Having a commercial litigator coordinate and oversee the gathering of evidence, the retaining of experts (if needed), and the preserving of relevant electronically stored information (“ESI”), among other things, is often the key to a successful outcome. If you would like further information on any type of commercial litigation, please do not hesitate to reach out to any of the litigation attorneys at Barshay Sanders, PLLC.