Why Businesses Avoid Lawyers?

Many businesses, especially small and medium enterprises (“SMEs”), tend to avoid choosing legal proceedings as a way to resolve issues if they can help it, fearful of the monetary costs it might involve, as well as issues around public reputation and the time it might take.  Here experienced commercial lawyer Marcus Croskell takes a look at these three issues and considers when hiring a lawyer to deal with a business issue may or may not advisable.

Financial Costs

Businesses are often reluctant to enter into litigation as it brings with it a fear of spiralling costs if case takes a long time and a fear of losing which would mean they have to pay other side's costs and/or damages.  These are not ridiculous ideas and litigation can be expensive.  However, most will not be taking on a Russian oligarch costing millions of pounds as in the Roman Abromovich High Court case against Boris Berezovsky.

The reality is that most cases settle pre-issue or before trial.  Both sides have to consider it on a commercial basis.  Hiring a lawyer to help with this process does not automatically mean it will go to court and trial.  The judicial process encourages parties to talk or mediate at an early stage to save on costs for the parties and the public expense of running a court. 

A lawyer can help you assess whether you have a good case and/or whether the case is commercially viable.  A commercial lawyer such as myself can assist you reaching an agreement and settlement out of court, drafting terms that the parties can agree on to end the dispute, thereby saving money and the stress of going through the litigation.

Reputation

Parties have many reasons for going to court.  In cases of non-payment by customers, the impact on reputation can actually be positive as other customers will get the message that you do not have limitless patience with unpaid invoices and require payment for your goods or services within a reasonable period of time.  In serious cases involve large non-payment of debts, reputation can become secondary to viability of the company due to cash flow problems.

Equally they may have valid reasons to resist entering into a contentious court battle.  I am currently involved in a High Court case in the Mercantile Division before HHJ Bird QC.  I am acting for a partnership that is being sued by a large national chain for six-figure sum.  The Judge warned at the first preliminary pre-trial hearing that the parties should talk and avoid a trial.  He particularly warned the national company that a court battle may lead to some unhelpful press publicity that may damage their brand. Depending on the nature of your clientele, a trial in which you or your opponents ‘dirty laundry’ is aired in public, is unlikely to generate future work.

A lawyer can help your company recover debts without recourse to court appearance by encouraging and facilitating settlement.  That being said, sometimes parties are left with no option but to go to court and defend their reputation.

Time

The legal system is known for taking time to process cases.  Small businesses worry about the time required to attend court, have meetings, plus time taken to gather evidence, prepare etc – which can have costs to the business in lost time.  Business has to weigh up the time involved in taking legal proceedings against the time already spent trying to resolve the issue so far (especially if the issue has already been going on for months or even years).  Furthermore, where large sums are outstanding, business leaders have no option but to press on with litigation as further delay may force them out of business.

Sometimes, a lawyer stepping in can help resolve things without needing to go to court, and save time in the longer run.  I was recently told about a local authority that was reluctant to get lawyers involved in case it cost money.  They proceeded with a public tender process for companies to bid for a contract over 5 years.  Mistakes were made in the process because they failed to get specialist legal advice to save a relatively small amount.  In this instance, it can be put in context when one understands that the contract was for £35,000,000.  The mistakes made because they cut corners saving costs will be well in excess of £100,000.  This example shows it can be commercially sensible to get early and timely legal advice.

Appearing in Court

There are many who fear of speaking and appearing in public.  The Courtroom is no different and depending on your tribunal, there may be a variation in numbers from a jury trial to a hearing before a single judge.  Many people have no experience of speaking and/or appearing in any sort of public context.  The thought of talking is daunting on a personal level.  An experienced lawyer has the benefit of doing this on a regular basis and will make the case for you in a skilled and articulate manner.  Furthermore, in a trial, a lawyer such as a barrister is essential to prepare and undertake the trial process competently and with a view to maximising the chances of success.

A good lawyer will be able to give initial advice about your situation, helping to clarify whether further action is worthwhile and what it might involve.

If you would like your business to have some legal advice, then please contact Marcus Croskell for a free initial legal enquiry on 0843 886 2603 or by email HERE.

Lawyers Suffolk - Contact Marcus Croskell for assistance with your business dispute.