Litigation Risk

Reflect on the traditional litigation system (such as the lawsuit, answer, discovery, trial, and/or jury). What are the risks that businesses and other organizations encounter when dealing with traditional litigation, and what measures can business managers take to reduce exposure to those risks?

There are many risks associated for businesses and organizations when it comes to the traditional litigation system. Litigation can be expensive, there are strict procedures and timing that has to be followed, you never know who the judge or jury will be and there is judicial enforcement. A less expensive approach to litigation is ADR (Alternative Dispute Resolution) which offers parties alternative means to resolving their differences outside the actual courtroom. There are many different ranges of ADR and some are informal which could include a simple settlement to a more formal approach. You have Arbitration which is one of the oldest forms of ADR and is used commonly today.

There are many different ways that managers can reduce exposure to these types of risks. Personally I like to call them "common sense laws" but sometimes they are often found uncommon. Simple things like discrimination against race, creed, sex, origin and pay are important. Businesses should provide written documentation of their policies and procedures so that not only are employees aware so are the customers. When using the ADR method it gives you flexibility, you select the parties involved, it can sometimes be less expensive and it is usually done much faster than the courts.