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Three [Avoidable] Missteps That Happen in Every Business Dispute

I n some ways, a lawsuit—whether by the contractor or against it—is a bit like a serious personal injury. When it happens, it derails important plans and goals.

It takes money, time and focus to solve the problem and get back to “real” life. This is money, time and focus that the contractor had planned to devote to other efforts. Fortunately, there are ways to get back to business sooner and with less pain. From the perspective of a judge and a business litigator, the courtroom shines a bright, fluorescent light on three (correctable) errors commonly made by businesses dealing with a dispute. In fact, the practices that help a contractor avoid these common pitfalls not only serve well during a dispute, but also in everyday business.

Do Not Put It Off. Evaluate Early And Often

Certain moments can be seen more clearly in hindsight. These are the moments that went by when there was a chance to gather the facts early and take a long hard look at the potential costs, risks and benefits of a lawsuit, and to prevent the dispute from escalating, or, at a minimum, to deal with it better.

Early dispute evaluation will save a contractor money and time, but it requires an upfront investment. It requires gathering enough facts to identify the business’ strengths and weaknesses and the unknowns. It requires action when the contractor is already busy with the mission of its business, and before performing the burdensome tasks required during the ordinary course of a lawsuit.

A critical part of this process is to make sure that the business culture allows people to admit when they are not perfect—that they could have done something better or that they made a mistake. The team must feel comfortable drawing attention to potential problems before they are actual problems. Missteps and mistakes do not stay hidden once a dispute erupts. It is better to find out the truth early, when the natural repercussions that may flow from a misstep can be avoided.

Plus, learning about a misstep is not only a chance to avoid or resolve a dispute, or avoid some of its harm—it is also an opportunity to make changes that might improve future success.

Do Not Wait Until The Doorbell Rings. Keep The House Tidy  

The ability to store massive amounts of documents and information without occupying more than a thumb drive of physical space tempts business owners to never clean out their data closets. Being able to fire off joking emails at the expense of a customer or a joint venture partner may seem like great way to lighten a heavy workload.

Do not succumb to the temptation. A lawsuit often requires a contractor to look for and produce “all documents” or “all emails” about broad sweeping subjects. Be deliberate in communicating with employees about the proper use of email, whether through a policy or otherwise. Develop a document retention policy and follow it. Be a streamlined and well-organized enterprise. It will save money, time and painful moments in the event of a lawsuit.

Do Not Get Mad

Among the wisest admonitions shared by one experienced judge to another is,  “Do not get angry until after you have spent a long time deciding to get angry.”

Of course a person in the midst of a lawsuit is going to get angry. Just don’t write or say anything in the heat of the moment. Don’t decide to send or keep anything until the anger has passed and reread the message when calm.

On top of that, if the other side behaves badly, remember that it is just business. Let the other side violate the “do not get mad” rule without reacting in kind.

Judges and juries can see which side has consistently behaved rationally and well, and which side is pretending to behave well only when they think the decision-maker is watching. Often when the facts are complicated or murky, as in many business disputes, authenticity can be the plainest thing in the room.

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