Taking another company to court

Litigation is often seen by businesses as a waste of time and money, but if you handle it in the right way you can minimise costs and maximise returns. Sarah Murray, an associate at law firm Stevens & Bolton, explains.

Litigation is often seen by businesses as a waste of time and money, but if you handle it in the right way you can minimise costs and maximise returns, writes Sarah Murray, senior associate in the dispute resolution department of law firm Stevens & Bolton.

Here’s a step-by-step guide to managing the process of taking another company to court.

Put someone in charge
Appoint a member of staff to handle the claim early, someone who is well-organised and preferably not directly involved.

Gather evidence quickly
Don’t wait till vital documents are lost or destroyed. Identify, collect and organise all evidence relevant to the claim, including emails. Ask staff not to dispose of any potentially useful documents until the dispute has been resolved.

Prepare summaries of events
Ask all staff involved in the claim to prepare a detailed written summary of events. Claims take time to reach trial, by which time employees may have left the company or forgotten important details.

Obtain advice

Your adviser should identify the weaknesses as well as the strengths of the claim, pinpoint areas to work on and estimate how much investment (both in time and money) will be needed.

Evaluate your opponent’s ability to pay
If your opponent can’t pay, the best claim becomes worthless. Check out credit references and search Land Registry and Companies House data.

Know what is involved

Prepare yourself and your team for the different steps involved in the claim: preparation, disclosure (the exchange of documents relevant to the case), witness statements and the trial. Ensure you can give these steps the time and attention they need.

Stay open to offers

Be open to making and receiving offers of settlement, as well as using methods other than straightforward negotiation (such as mediation) to achieve resolution. It is almost always better to accept a reasonable offer than go all the way to trial.

Communicate regularly on costs

Litigation costs are difficult to predict but receiving regular updates on expenses and informing your solicitor of your constraints will help ensure that there are no surprises. Also consider alternative funding options such as conditional fee arrangements or third-party funding.

Of course, not every dispute will be large or important enough to pursue, but where litigation is considered justifiable the above steps should make the process easier and maximise your returns after costs.