How to Minimise the Damage Litigation Causes in Your Small Business

There are many costs in litigation and not all are financial. Most litigation lawyers will tell you there is also a cost in time lost, stress and the reputation of the business. If you’ve been unfortunate enough to be sued by an unhappy employee or client, how can you mitigate the loss faced by your business and by you, as the business owner and possibly, the manager?

Financial loss

In fact, this is most likely the easiest one. You need to have enough insurance to pay both the court costs and the payout to the person who sued you. It should also cover the costs inherent in lost time and loss of key staff, if that is an issue – and it often is. Employees take sides and are likely to leave if they side with a fellow worker they perceive as being in the right. No one should ever start a business without the right kind of insurance. If you can’t afford it, you should not be in business.



Reputation loss

While you cannot talk about the court case until it’s over, as soon as you hear about it, you should draft a statement for the media to the effect that your company is doing all it can to work out a solution. Your lawyers can probably handle this, but you can also get people who are professionals in minimising fault and saying just the right thing to reduce tensions and the speculations of the media. They will also tell you what to say when it is the proper time to speak.

Emotional loss

The emotional cost is often one of the hardest things to cope with because it is often hidden. If you don’t want to develop an ulcer, high blood pressure or even just indigestion, it’s a good idea to have counselling. While you can’t talk about the trial publicly, you will be able to talk to the counsellor and expect complete confidentiality. Anyway, they don’t require the details of the case. They can help you get through the stress of it without knowing anything. They’ll also show you how to cope with your relationships so they don’t break down under the stress.

Time loss

Loss of time must be handled to ensure your business can still continue without loss of clients or suppliers. You need to delegate your work to others who can handle it with a bit of advice from you. That will leave you free to attend the court hearings without worrying too much about what is happening to your business. You may need to put on more staff temporarily to take over doing certain things if there are no other people who can handle them.