There are many reasons why you would want to prevent legal action from being taken against your business, and that applies even if you already have excellent commercial lawyers at your service. Contesting litigation is not only a process that can prove to be expensive, as it proceeds, the levels of stress for business owners, can be significant.
There is also the negative impact legal action may have on your business being able to run properly. It can mean that important decisions are put on hold, and also that financial planning is compromised due to the potential financial penalties being imposed on it.
Even worse, commercial lawyers say if the details of the legal action become public knowledge, it can cause clients and customers to be more reticent about doing business with you whilst the case is ongoing. Even if your business wins the case, until that point you could see a downturn in sales, and that obviously causes income to be reduced, which is hardly ideal when you might need additional funds to fight the legal action against your business.
Now that we have explained why you want to avoid legal action against your business, the important thing to remember is that there are many ways in which you can prevent it from ever happening, so let us look at some.
Plan For the Worst
This might seem like an extremely negative statement, but there are lots of businesses who subscribed to the mantra ‘the paranoid survive’ and were thankful they followed it. In other words, whilst they absolutely hoped that nothing negative would happen to their business, they took precautions and steps to ensure that if it did, they would be protected.
Compare that to hoping for the best, and then being totally unprepared when the worst happens. Sadly, there are many businesses which are no longer open because they were left completely exposed to litigation and lost, not only the case, but their very existence.
Prevent Issues By Getting The Correct Legal Advice
There are many areas of doing business where having the correct advisors and support is vital. This especially true when it comes to legal matters. Going into a court and saying that your business did what it did, because you did not know the law as it relates to the issue at hand, is not a defence against any legal action.
That is why having an experienced and proven commercial lawyer whom you can ask or refer to whenever an aspect of what you do might be moving into a grey area with regards to business and commercial law, is essential.
No matter what their retention fee might be, it will seem small change compared to the compensation or damages you might be ordered to pay, having lost a legal action which occurred due to your ignorance of the law.
Cover as Much As You Can with Insurance
Whilst it may not necessarily prevent legal action, having insurance most certainly can mitigate the financial damage, should you lose a case, to the extent of saving the business. Just as you should speak to your commercial lawyers about legal matters, you definitely want to be asking your insurance broker for their input.
They advise not only on whether you have a sufficient level of insurance, but in which aspects of your business you could have insurance. These can include negligence, product liability, professional indemnity, and public liability, to name but a few.