(Law) Suit Up? No Thanks!


Hundreds of millions of business lawsuits are filed in court every year. As a rule, a small business can expect to spend 0.2% of their revenue on legal action. Although this doesn’t sound like much, 0.2% of £1 million is £20,000. Of course, every small business would love to avoid these costs and, to do so, they have to prevent lawsuits. But, with 100 million in the USA alone, it is easier to say than to do. Thankfully, it isn’t impossible if you consider the following. These are the hacks which will keep you out of the courts and in the black.

Hire A Legal Team

The best way to avoid a suit is to structure the company properly. That way, all the small print will get accounted for and there should be no nasty surprises. For example, HMRC prosecuting you for tax evasion. Unfortunately, formulating a legitimate company is not a simple process if you don’t have the proper knowledge. The good news is a solicitor and legal experts are on hand to help. By hiring their services, they will be able to take care of everything from the format (sole proprietorship etc.) to employee contracts. However, always remember that one lawyer can’t take care of everything as they specialise in one area.

Codify Policies

The best tip is to be a moral and ethical firm. However, the buck doesn’t stop with you, the boss, because the whole organisation has to act honestly. If there is one chink in the armour, the company could be liable to a suit. To avoid this, it is vital that you write down and publish the codes of conduct for the business. That way, it is easy to disseminate the info to the rest of the office so that they know how to act. Also, if it is on the computer or the wall, it is a reference point in case employees forget.

Keep Good Records

The best defence to an accusation is evidence which shows you are right. Did you know there is a 12% chance an employee could sue the firm? Reasons for this include everything from labour disputes to harassment charges. Sadly, if it is their word versus yours, the odds are not in your favour. However, if you have management software which keeps detailed records, you can fight back. Click here to find out more about CMS. By showing that you paid them on time or that you filed the dispute, it is harder for the accusation to stick.

Don’t Go On The Front Foot

Avoid a lawsuit works both ways. If you feel aggrieved, a suit might seem like the way to go. But, you should practice caution before you pull the trigger. One reason is juries are sympathetic to customers because they are laymen with small resources. The second is the hit on your reputation. Even if you are right, the public won’t like you suing the ‘little guy.’ As a result, they will blacklist the company and its products.

As a rule, a lawsuit is a last resort when all the other avenues are not an option.


Michael Foote

Quote Goat's founder and money-saving enthusiast.

(Law) Suit Up? No Thanks!

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