Business disputes can feel overwhelming, especially when you're facing the prospect of litigation for the first time. The court system operates on its own timeline, with its own rules and procedures. Understanding what to expect—and when—can help you make better decisions, manage costs, and reduce stress throughout the process.
Key Takeaways
- Most business litigation cases take 12-24 months from filing to resolution
- Discovery is typically the longest and most expensive phase
- The vast majority of cases settle before trial
- Early case assessment can significantly impact costs and outcomes
The Phases of Business Litigation
Business litigation generally follows a predictable sequence of phases. While timelines vary based on court congestion, case complexity, and the parties' willingness to negotiate, here's what a typical commercial lawsuit looks like:
Phase 1: Weeks 1-4
Pre-Litigation and Case Assessment
Before any lawsuit is filed, there's typically a period of investigation, demand letters, and strategic planning. This is when you gather documents, assess your claims or defenses, and evaluate whether litigation is the right path.
Phase 2: Weeks 4-12
Pleadings
The lawsuit formally begins when the plaintiff files a complaint. The defendant then has a set time (usually 20-30 days) to respond with an answer or motion to dismiss. There may be amended complaints and additional motions during this phase.
Phase 3: Months 3-12
Discovery
This is typically the longest and most expensive phase. Both sides exchange documents, submit written questions (interrogatories), take depositions, and gather evidence. Complex cases may require expert witnesses and additional discovery.
Phase 4: Months 10-18
Motions and Pre-Trial
After discovery, parties often file dispositive motions like summary judgment. The court will also hold pre-trial conferences to address scheduling, witnesses, and trial logistics.
Phase 5: Months 18-24+
Trial (If Necessary)
If the case doesn't settle, it proceeds to trial. Business trials can last anywhere from a few days to several weeks depending on complexity. After trial, there may be post-trial motions and potential appeals.
Why Most Cases Settle
Despite the formal trial process, the reality is that over 90% of business litigation cases settle before reaching a verdict. There are several reasons for this:
- Cost certainty — Settlement provides a known outcome, while trial results are unpredictable
- Time savings — Trial preparation and the trial itself consume significant resources
- Privacy — Settlements can include confidentiality provisions; trials are generally public
- Control — Parties control settlement terms; a judge or jury controls the verdict
- Business relationships — Settlement may preserve the possibility of future dealings
"The best litigation strategy often involves positioning your case for settlement while being fully prepared for trial. Cases that are well-prepared settle on better terms."
Common Types of Business Disputes
Business litigation encompasses a wide range of disputes. The most common include:
Contract Disputes
Breach of contract claims arise when one party fails to perform their obligations under an agreement. These can involve purchase agreements, service contracts, partnership agreements, employment contracts, and more.
Partnership and Shareholder Disputes
When business relationships break down, disputes often arise over control, distributions, fiduciary duties, and the direction of the company. These cases can become particularly contentious when personal relationships are involved.
Employment Litigation
Claims involving wrongful termination, discrimination, wage and hour violations, non-compete agreements, and trade secret misappropriation fall into this category.
Intellectual Property Disputes
Trademark infringement, copyright violations, patent disputes, and trade secret theft represent a significant portion of business litigation, particularly in technology and creative industries.
The Discovery Phase: What to Expect
Discovery deserves special attention because it's where most of the work—and cost—occurs. During discovery, you may encounter:
- Document requests — Formal demands to produce relevant documents, emails, contracts, and records
- Interrogatories — Written questions that must be answered under oath
- Depositions — In-person questioning of witnesses under oath, recorded by a court reporter
- Requests for admission — Statements that the opposing party must admit or deny
- Expert discovery — Reports and depositions from expert witnesses
Document Preservation Is Critical
Once litigation is reasonably anticipated, you have a legal duty to preserve relevant documents. This includes emails, text messages, electronic files, and physical documents. Failure to preserve evidence can result in severe sanctions.
Cost Considerations
Business litigation can be expensive. Understanding where costs arise helps you budget and make informed decisions:
- Attorney fees — Most business litigation is billed hourly, though alternative arrangements exist
- Expert witnesses — Complex cases often require expensive expert testimony
- E-discovery — Collecting, processing, and reviewing electronic documents can be significant
- Court costs — Filing fees, transcript costs, and other court-related expenses
- Business disruption — Time spent on litigation is time not spent running your business
Alternative Dispute Resolution
Not every business dispute needs to go through full litigation. Alternative dispute resolution (ADR) options include:
Mediation
A neutral mediator helps the parties negotiate a settlement. Mediation is non-binding and can occur at any stage of the dispute. Many courts require mediation before trial.
Arbitration
An arbitrator (or panel) hears evidence and issues a binding decision. Arbitration is typically faster and less formal than court litigation but may limit discovery and appeal rights.
Early Neutral Evaluation
A neutral evaluator reviews each side's case and provides an assessment of likely outcomes. This can help parties calibrate settlement expectations.
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Schedule ConsultationWhen to Involve an Attorney
You don't always need a lawyer for every business disagreement. But you should strongly consider legal counsel if:
- You've received a demand letter or lawsuit
- The amount at stake is significant to your business
- The dispute involves complex legal issues or contracts
- There's potential for the dispute to escalate
- Your reputation or ongoing business relationships are at risk
- Evidence preservation is a concern
Practical Steps for Businesses
Whether you're a plaintiff considering litigation or a defendant responding to claims, these steps will serve you well:
- Preserve all relevant documents — Implement a litigation hold immediately
- Gather your key documents — Contracts, emails, invoices, communications
- Create a timeline — Document the sequence of events while memories are fresh
- Assess your goals — What outcome do you actually want? Money? Performance? Separation?
- Evaluate costs vs. benefits — Is litigation the most efficient path to your goals?
- Consider relationships — Will this litigation impact other business relationships?
Frequently Asked Questions
How long does business litigation take?
Most cases take 12-24 months from filing to resolution. Complex cases can take longer. Cases that settle early may resolve in a few months.
Can I recover my attorney fees if I win?
Generally, each party pays their own fees (the "American Rule"). However, contracts may include fee-shifting provisions, and certain statutes allow fee recovery. Review your agreements carefully.
Should I try to settle early?
It depends on your case. Early settlement saves costs but may not reflect the true value of your claims until discovery clarifies the facts. Sometimes you need more information before you can evaluate settlement offers fairly.
What if I can't afford litigation?
Discuss alternative fee arrangements with your attorney. Options may include contingency fees, hybrid arrangements, or litigation funding. Also consider alternative dispute resolution, which is often less expensive than full litigation.
Disclaimer: This article is for general information only and is not legal advice. Every case is fact-specific. For legal advice regarding your specific situation, consult with a licensed attorney.