Before understanding commercial litigation, we must go back to civil litigation. Civil litigation is a lawsuit between two parties where neither is pressing criminal charges. In civil litigation, the person suing is the plaintiff, and the individual they are suing is the defendant.
The purpose of civil litigation is to allow the plaintiff to fight for or defend their legal rights against someone who caused them harm. The plaintiff must prove the person acted wrongfully or neglected to act and that the action or inaction caused the plaintiff to sustain damages. The plaintiff goes through the effort of filing a lawsuit to recover compensation or specific performance. A specific performance can be the fulfillment of a contract. If one or more of the parties involved in a civil litigation case is a business entity, it turns into commercial litigation.
Why is there a specific form of litigation for businesses?
Even though commercial litigation shares similar characteristics with civil litigation, a lawsuit involving a business entity comes with its own set of governing bodies and laws. Commercial litigation specifically tackles business disputes such as the following:
- Shareholder disputes
- Class action or antitrust lawsuits
- Business tax disputes
- Breach of business or commercial contract
- Board of director disputes
- Breach of privacy or data
- Employment or union labor concerns
- Patent, trademark and/or copyright infringement
Businesses amid a legal dispute must know the federal and state regulations applicable to their specific industry and business entity. Whether the business is the party pursuing litigation or defending against it, they must be well-informed of their duties and responsibilities as a product or service provider in their respective field.
Protecting your business from commercial litigation
Any business must protect itself from the onset of business formation, which requires significant legal paperwork. The company may need bylaws, company policies, shareholders’ agreements, employer and employee agreements and intellectual property protection. By understanding the complexities of commercial litigation, you can actively protect your business in the event of any legal action.