Surviving corporate litigation
Article Date: Jan 22 2009
Litigation can be costly and damaging
Business owners are used to stress and conflict, but few relish the tribulations of a legal battle. Here's some tips for making a painful process go as smoothly as possible.
‘It was terrifying. It was an ordeal. It turned my hair white. But if I hadn’t stopped them, I wouldn’t have had a business. So I had to do it.’
Mandy Haberman is the inventor of the Anywayup Cup, a non-spill cup for babies and toddlers. She’s talking about the litigation she had to go through in the early days of her business to protect her product from patent infringements.
Fortunately Haberman’s case has a happy ending. ‘Thank God, we won. [The infringer] was stopped from making their product and our business continued to grow.’
In less fortunate cases, litigation can finish off a company – even if the case, in the end, is successful.
At best, the process is a huge disruption to business, as Jonathan Tardif, a partner at law firm Eversheds, attests: ‘Like all projects, litigation has a beginning, an end and a bumpy middle bit. It will probably go on longer than you expected, and cost more than you budgeted for.’
Haberman, for example, found her legal insurance ‘woefully inadequate’, despite being assured by the broker who sold it to her that it would be enough to cover three cases.
Tardif says that where costs are concerned, it’s no longer enough for lawyers to make remarks along the lines of “how long is a piece of string?”
‘It’s important that you get a budget from a lawyer at the outset that’s broken down into the different stages of expenditure. You’ll be able to see when costs are likely to peak, and time that to correspond with your accounting needs.’
Be prepared
The same detailed planning should go into other aspects of the case, says Tardif,
from collecting evidence to involving staff.
‘Litigation is not a new thing: it’s been done for hundreds of years,’ he says. ‘Lawyers know when the peaks and troughs of activity are likely to be and can plan accordingly.’
Apart from time and money, the other resource the case will consume is the staff. Tardif emphasises the need to determine early on exactly who needs to be involved.
‘It’s not a spectator sport,’ he says. ‘The message has to be that if you are not involved, you should carry on with your job and don’t poke your nose in where it’s not wanted.’
Jonathan Tardif is happy to talk through aspects of the litigation process relevant to your business. He can be contacted on 0845 497 7686 or by email.
