What is the definition of commercial litigation?
No entrepreneur desires to become embroiled in a conflict, yet at times, it becomes inevitable. Contract breaches, issues regarding confidentiality, and disagreements among shareholders are just some of the typical conflicts that can emerge in the regular course of conducting business. When attempts at negotiation prove fruitless and every other avenue have been tried, resorting to commercial litigation may be the sole recourse for resolving a business-related argument.
Commercial litigation is a branch of civil litigation focused on settling disputes that arise between business entities, companies, and people participating in commercial relationships. In such scenarios, one party initiates legal action against another to uphold its lawful entitlements regarding a business dealing. Depending on the specifics of the situation, a commercial litigation attorney may appear in either federal or state court.
What is the Process of Commercial Litigation?
Prior to presenting a commercial case to a judge, the involved parties will usually attempt to resolve the issue through non-court means. In certain instances, a contract might stipulate that mediation or arbitration has to be explored before resorting to litigation. Nevertheless, if alternative resolution methods prove unsuccessful, pursuing litigation may become necessary.
Business disputes generally progress through the same stages of litigation as civil cases. To be specific, the following are the phases of commercial litigation:
- Pre-suit investigation — Prior to officially initiating litigation, the plaintiff’s legal representative will scrutinize the business argument and assess the case’s merits. This preliminary investigation aids in crafting a strategic approach to the case.
- Initial pleadings — The commencement of the commercial litigation pipeline occurs when the plaintiff submits the opening pleadings. The documents that initiate the suit are known as the “summons and complaint.” The purpose of the complaint is to outline the allegations in the case and must be served on the opposing party. The purpose of the summons is to notify the opposing party of the lawsuit and the deadline for a response. Subsequently, the defendant has the chance to submit an Answer as well as assert any counterclaims.
- Discovery — This stage of commercial litigation is usually the lengthiest and involves gathering information from the opposition. Various discovery methods may be employed, such as document requests, depositions, and interrogatories. Alongside deposing parties involved in the case, it is also possible to depose non-party witnesses.
- Motion practice — This is a plea to the court for a legal remedy. Motion practice may happen at any juncture during a commercial suit. There exist numerous kinds of motions that may be filed based on the sought-after relief. For example, a popular motion early in a commercial dispute is one for a preliminary injunction. Other kinds of motions in a commercial case may encompass a motion to compel discovery, a motion for summary judgment, and a motion to amend the complaint.
- Trial — The final step of commercial litigation, unless an appeal is lodged, is the trial. For a business argument, a trial can be adjudicated either by a jury or solely by a judge (referred to as a “bench trial”). During the trial, each party has the chance to present arguments and furnish evidence in support of their case.
Parties retain the liberty to arrive at a settlement at any juncture within the commercial litigation pipeline. A settlement can be achieved through alternative dispute resolution methods or through robust negotiations. When a settlement is reached, the parties independently figure out the outcome, rather than leaving it to a jury or judge. In commercial litigation, it is fairly common for parties to reach a settlement shortly before the trial commences.
Possible commercial litigation damages
In order to succeed in a commercial litigation lawsuit, the plaintiff must demonstrate that he or she has suffered harm because of the wrongful actions of the opposite party. The aim of awarding damages in commercial litigation is to restore the party to the place they might have been in if not for the harm they endured. According to the specifics of the case, a vast range of remedies may be granted to a prevailing plaintiff.
The most prevalent form of damages conferred in commercial litigation are compensatory damages. This kind of damages makes up for the financial losses suffered by a business, encompassing lost profits, expenses, and harm to the company’s reputation. In rare instances where it may be proven that the defendant acted with fraud, oppression, or malice, punitive damages might be an option. Punitive damages are not intended to reimburse the plaintiff, but instead to penalize the defendant and prevent the action from happening again.
Equitable relief may also be available to a plaintiff when a monetary remedy would not adequately redress their grievances. For example, equitable relief could be granted, compelling a party to take action or stop doing something. A common type of equitable relief is the rescission of a contract in cases of contract breaches — this kind of remedy nullifies the contract and returns the parties to their original place prior to the execution of the contract.
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