In the world of business litigation, companies often find themselves in legal proceedings due to various reasons, and mistakes made along the way can further complicate the situation. John B. Quinn, the founder of Quinn Emanuel Urquhart & Sullivan LLP, the world’s largest law firm specializing in business litigation, has shared some common mistakes that litigants make, which can harm their legal positions. One such mistake is careless communication, as anything in writing, including emails, texts, and instant messages, can be discovered and used against the company in litigation.
Another common error that litigants make is attempting to destroy or alter evidence once a dispute arises. Parties are legally obligated to preserve evidence, and any attempts to clean up the record can worsen the situation, leading to fines or unfavorable judgments. Additionally, employers should be cautious when taking adverse actions against potential witnesses, as it can impact the outcome of the trial.
Maintaining attorney-client privilege is crucial in protecting communications between attorneys and clients from discovery, but the privilege can be waived or lost due to mistakes. Companies may jeopardize the privilege when in-house counsel serve dual roles as lawyers and businesspeople, so it is essential to label privileged communications and limit access to necessary individuals. Honesty and transparency with lawyers are also vital, as forming legal strategies based on all facts can lead to better outcomes.
Insurance plays a significant role in managing legal costs, and contacting insurers promptly after receiving notice of legal action can make a difference in coverage. Keeping insurers informed about developments in litigation, obtaining consent for retaining counsel, and involving them in settlement negotiations are essential steps in managing legal costs effectively. Corporate governance and choice of law and dispute resolution provisions are also crucial considerations in litigation, as ignoring corporate formalities and not documenting decisions can increase risks.
Overall, companies should carefully consider whether litigation is the best solution for their problems, as lawsuits can be difficult to end once initiated. Focusing on winning in the marketplace rather than in court may often be a more effective strategy for companies. It is essential to seek legal advice from an attorney regarding specific situations, as the information provided here is not legal advice and should not serve as a substitute for counsel. The Forbes Business Council is a leading organization for business owners and leaders focused on growth and networking.
