Most business people seek to resolve their business disputes before litigating. If litigation becomes necessary or cannot be avoided, they will continue to seek a business solution. Here are the top five reasons to settle your business dispute:
- Control your destiny and contain your risks. When you litigate or arbitrate your case, you put the ultimate resolution of your dispute into the hands of a judge, jury, or arbitrator, all of whom are capable of doing things that surprise you and hurt you. On the other hand, settling your dispute means that you and your opposing party decide by agreement what the outcome will be.
- Settle on a basis that cannot be obtained in court. Courts are limited in the types of disputes they can adjudicate and the types of relief they can award to a prevailing party. In contrast, business owners who settle their disputes are free to use any kind of consideration or inducement in settlement negotiations. For example, settlement agreements can include business terms regarding non-disparagement, confidentiality, dividing items of property that are not involved in the dispute, joint business undertakings, and a host of other items that a judge, jury, or arbitrator may not have the ability to award.
- Devote your time, resources, attention, and emotional energy to your business rather than to your dispute. The litigation process consumes substantial amounts of your time, money, attention, and emotional energy. The judge or arbitrator imposes deadlines, discovery requirements, and other obligations. Moreover, many business owners prefer running their business to the stress of re-living past disputes and preparing to testify and be cross-examined in court. Settlements often come about because the parties realize that the litigation process is preventing them from doing what they do best and what brings them the most satisfaction.
- Protect your privacy. When you go to court, you are often required by discovery rules to reveal sensitive details about your business to your adversary. Moreover, unless court records are sealed by the judge, anybody can look at them. The sooner in the process that you are able to settle your business dispute, the better able you are to protect your sensitive business information.
- Bring finality to your business dispute. Our court system emphasizes due process. But it takes time to give notice to all participants, allow them obtain discovery, consider multiple motions, and conduct a trial. Many judges have thousands of cases on their docket. Even when a winner is declared, the winner must follow post-judgment enforcement procedures. Moreover, appeals may be taken. A well-crafted settlement resolves the business dispute once and for all.