Types of Business Lawsuits
Understand the lawsuits that could involve your company
on September 22, 2022
Updated on January 11, 2023
Many kinds of lawsuits involve businesses and business activities. Business owners may get sued as a defendant or sue others as a plaintiff.
Business owners can take various steps to protect their business from getting sued. For example, they can get a lawyer to draft contracts and other legal documents to ensure there are no legal gaps. They can also implement sound policies and procedures to ensure their company complies with the law.
But regardless of how careful a business owner may be, getting sued may be unavoidable in some instances.
At other times, a business owner may have no choice but to bring a lawsuit to protect their business interests or to recover financially.
Regardless of which side a business owner is on in a dispute, it’s essential to understand the type of lawsuit being brought. This article will cover some of the most common types of business lawsuits and help point to further legal help.
It’s always good to speak with a lawyer about your case to ensure the best outcome for your business’s interests.
What Are the Most Common Types of Lawsuits?
Business law is complex, and many kinds of business disputes could arise.
“The most common [business lawsuit] is probably contract disputes, [when] companies that have contracts with each other end up in a dispute over them,” says Georgia business litigation attorney Benjamin I. Fink.
“There are also statutory disputes,” says Fink. “For example, trade secret disputes [that involve intellectual property laws]. Many other state and federal statutes apply to business relationships and could come into play.”
“Then there’s also common law torts,” says Fink. “For example, tortious interference with business relations,” when a third party illegally interferes with a company’s current or future business relationships.
A list of common types of business litigation includes:
- Breach of contract
- Intellectual property disputes involving trade secrets and patents
- Breach of fiduciary duty
- Personal injury claims, including
- Premises liability claims for injuries to customers on business property
- Products liability for defective products (sometimes as a class action lawsuit
- Employment disputes, including
- Wrongful termination
- Workplace harassment
- Discrimination and hostile work environment
Various parties can bring business lawsuits, depending on the legal issue. For example:
- Shareholders might bring a breach of fiduciary duty lawsuit against board members who have engaged in self-dealing or other practices
- Breach of contract lawsuits are typically brought by one company against another
- Customers or users of a product bring personal injury claims
Regardless of the type of lawsuit or which side a business is on (suing or being sued), “the earlier you get a lawyer involved in any potential or festering dispute, the more likely you are to get advice on how to handle it,” says Fink.
What Is the Difference Between Commercial Litigation and Civil Litigation?
As a business owner, you may have heard the terms “civil litigation” and “commercial litigation.” How are these types of litigation different? Commercial litigation is a type or subset of civil litigation.
In general, civil litigation is a lawsuit between parties involving money or getting a court to enforce some legal right. The “parties” involved in civil litigation may be individuals, companies, or other entities.
Commercial litigation is simply civil litigation that involves companies.
Civil or commercial litigation is separate from criminal law and does not involve criminal charges. However, civil and criminal cases can sometimes be brought for the same underlying actions.
For example, suppose an employee has suffered sexual harassment from a coworker or supervisor. In that case, they can bring a civil anti-discrimination lawsuit against their employer.
If the sexual harassment involved sexual assault or sexual contact, the employee could also bring separate criminal charges against the coworker or supervisor.
Do Businesses Have an Alternative to Litigation?
Yes. Instead of going to court, businesses may use alternative dispute resolution (ADR) to settle their legal disputes.
There are different kinds of ADR. The most common types of ADR for businesses are:
- Arbitration. Businesses in dispute agree on a neutral third party to hear the facts of their argument and then issue a binding decision. Arbitration is similar to a traditional court hearing in that both sides present evidence to a third party who makes a decision which the parties must follow. Arbitration can save time and money for the parties since they don’t have to go through the courts.
- Mediation. Like arbitration in it involves the disputants and a third party. However, in mediation, the third party helps the disputants reach a decision on their own instead of deciding for the parties.
Even though ADR is an alternative to the traditional litigation process, it’s still wise to have a lawyer assess and represent your case.
There are still complex legal issues involved, and the outcome of ADR will have significant consequences for your business, just like traditional litigation. Having a legal expert on your side will ensure the best outcomes for your business.
Questions for a Business Attorney
If you’re a business owner facing any kind of legal action, consider getting advice from a business lawyer as soon as possible.
Many business litigation lawyers provide free consultations. These meetings let you get legal advice and help you decide if the attorney and law firm meet your business needs.
To get the most out of a consultation, ask informed questions such as:
- What are your attorney’s fees and billing options?
- Do you have an area of expertise in business law?
- How can I protect my business from a lawsuit?
- How do I sue another company?
- What are the steps in the litigation process?
- Is alternative dispute resolution preferable to a lawsuit in my case?
- How long does a business litigation case last?
Once you have met with a lawyer and gotten your questions answered, you can begin an attorney-client relationship.
Look for a business litigation attorney in the Super Lawyers directory to find the right lawyer for your business-related legal issues.