4 Types of Business Lawsuits That Can Devastate Your Small Business

Home / Blog / Business Litigation / 4 Types of Business Lawsuits That Can Devastate Your Small Business
4 Types of Business Lawsuits That Can Devastate Your Small Business

The financial impact of business lawsuits can be much more damaging to a small business than a large company, which often has in-house legal counsel and a budget solely dedicated to legal defense. The cost of litigation for a small business can range from $3,000 to $150,000, according to the Small Business Association. If it’s on the high end, this could put a lot of small businesses out of business.

Litigation costs U.S. small businesses more than $100 billion every year. In fact, half of all civil lawsuits are filed against small businesses. Some types of litigation are more costly than others, including these four:

Employment. Employee lawsuits are one of the most prevalent sources of business litigation, so taking steps to avoid these types of claims can save you significant time and money. Employees are protected by a number of state and federal workplace laws and can file suit for a number of things, including unlawful termination, discrimination, hostile work environment, wage issues, overtime issues, unemployment compensation, and more.

Contractual. Contracts are an integral part of doing business, but there are times when parties simply do not live up to their responsibilities under a legally binding agreement. Whatever the case may be, breach of contract lawsuits can be complex and may end up in court for resolution. To avoid having to defend yourself in a contract dispute, you need to be sure your contracts are drafted appropriately, that agreements are always put in writing, and that you abide by all the terms of your legal agreements to avoid being sued for failure to perform.

Intellectual property. Violations of intellectual property rights can be extremely costly as you could be held accountable for lost profits as well as damages. If the infringement was found to be willful — when a party exhibits intentional disregard for the owner’s rights and continues to infringe even after notice is served — the court can treble the damages. The best way to avoid this is to have a process in place for training personnel and policing any unauthorized usage of another owner’s intellectual property.

Customers. Consumer lawsuits over defective products, false claims, fraud, or other prohibited activities are serious and could lead to large damages, harming not only a company’s bottom line but its reputation as well. While it is preferable to try to resolve these disputes informally, these matters often result in litigation.

When you are facing any type of business dispute, you need an experienced Arizona trial attorney to obtain the best possible result. Contact Williams Commercial Law Group, L.L.P., at (602) 256-9400 to speak with us about your case.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us, though doing so does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established. Our description of what we believe to be superior technology and how we win cases reflects our typical approach to litigation, which we believe:  (i) gives us a competitive advantage, and (ii) is responsible for any success we have had. But we do not win every case. Other lawyers may have technology or approaches that they believe gives them an advantage. Also, the results that we have obtained in other cases or that are described in our clients’ testimonials do not guarantee, promise, or predict the outcome of your case, which depends on the law, facts, and evidence specific to it.