DTM Legal’s Richard Harris offers his top five tips for avoiding litigation.
At first glance, it might seem contradictory for a litigation lawyer to advise on how to avoid litigation altogether. However, at DTM Legal, our goal is always to secure the best possible outcome for our clients—and this is often achieved at the earliest stages of a dispute, well before positions become entrenched.
Of course, some disputes are unavoidable. But by taking a few simple, proactive steps, you can reduce the likelihood of litigation or at least be in a much stronger position should court proceedings become necessary.
There are many compelling reasons to avoid litigation. Court proceedings are expensive and time-consuming. In some cases, the legal costs can exceed the value of the claim—and there’s no guarantee you’ll recover those costs. Preparing for litigation also diverts key personnel, drains resources, and can negatively impact morale.
Ultimately, litigation distracts from what you do best: running your business and generating profit. Worse still, it can sour relationships and damage your reputation, affecting existing and future business opportunities.
Here are five key steps you can take to help avoid litigation:
1. Always Put It in Writing
Many disputes arise from misunderstandings or vague verbal agreements. As Samuel Goldwyn famously quipped, “A verbal contract isn’t worth the paper it’s written on.”
Whether you’re dealing with employees, clients, contractors, or suppliers, always document agreements in writing—and ideally, have them signed. This helps clarify expectations and provides crucial evidence if a dispute arises.
Even when working with long-standing clients or trusted partners, avoid relying solely on verbal discussions. If conversations take place in person or over the phone, follow up with an email or written confirmation to record what was agreed.
2. Be Cautious with Off-the-Shelf Documents
Online templates may look polished and professional, but if they aren’t tailored to your specific needs, they can leave your business exposed. A standard form contract may fail to address important details—or worse, include clauses that don’t reflect your intentions.
It pays to invest in properly drafted contracts that cover all foreseeable scenarios. If a contract is silent or ambiguous on a key issue, you may end up in court to determine its meaning—an expensive way to fill in the blanks. A well-drafted agreement is a far more cost-effective option in the long run.
3. Take Early Action
Problems rarely resolve themselves—and the longer a dispute is allowed to fester, the more difficult it becomes to resolve. Emotions can cloud judgement and make negotiations harder.
Establish internal procedures to flag potential risks early. Encourage employees to report concerns to management and ensure there’s a process in place to assess and respond to issues promptly. The sooner a problem is identified and addressed, the greater the chance of finding a resolution without court involvement.
4. Consider Mediation
If communication breaks down and a resolution can’t be reached informally, mediation is a valuable next step. This process involves a neutral third party helping the parties work toward a mutually acceptable solution.
Mediation is confidential and conducted on a “without prejudice” basis, meaning that nothing said during the process can be used against either party later in court. This encourages openness and creative thinking.
Even if a settlement isn’t reached on the day, mediation often clarifies the key issues and leads to resolution in the days that follow.
5. Know Who You’re Dealing With
Securing new clients or business partners is vital, but it’s equally important to carry out due diligence before signing any contract. Do they have a history of defaulting on obligations? Are they solvent?
Online tools and credit reference agencies can help you assess a company or individual’s financial standing and spot potential red flags. A little time spent researching a new partner can save you a great deal of trouble later.
Final Thoughts
While litigation is sometimes unavoidable, it should always be a last resort. The best way to protect your business is to take preventative steps now: invest in clear, tailored contracts; act early when issues arise; and approach disputes constructively. By doing so, you’ll not only reduce the risk of litigation, but also position yourself more favourably should court proceedings become necessary.
If you would like support reviewing your current contracts, setting up internal risk procedures, or exploring dispute resolution options, our experienced team at DTM Legal is here to help.
