Just about all successful businesses will find themselves involved in a lawsuit at some point. However, there are many strategies you can employ to help you avoid unnecessary legal disputes and minimize the risks you face. This will help you save money and maintain your focus on your business rather than ongoing litigation.

Here are a few common sense strategies to help you avoid business litigation.

Always follow the golden rule

Whenever you have an interaction with another party that could potentially become hostile, be sure to follow the golden rule (treat others as you wish to be treated). This simple piece of advice can go a long way. You should consider what is objectively correct in the circumstance from a neutral perspective, and empathize with the other party’s situation. By seeking to understand the other party rather than dominate them, you can neutralize some potential arguments and reach agreeable settlements.

Always emphasize outstanding communication

Clear communication from the time a business relationship is formed through the final transaction is absolutely imperative to not just a strong relationship, but also to preventing litigation. You should carefully draft and read all contracts, letters of intent, purchase orders, terms and conditions and general forms of communication such as letters and email. Your business should also keep lines of communication open with the other party at all times so you can clarify issues as they arise. Litigation often occurs as a result of poor communication, so in theory you should be able to avoid it by being a good communicator.

Act as soon as you discover possibly threatening developments

You should aim to cut off business disputes in their early stages—don’t just sit and hope they will resolve themselves. Implementing a clear review procedure can help ensure you allocate the necessary resources to a dispute in its early phases, helping you avoid litigation. Examples of such review procedures could include:

  • Developing reporting procedures for your employees to report possible risks
  • Identifying risk stages and developing plans for risk evaluation
  • Ensuring follow-up after risks are reported
  • Identifying, interviewing and evaluating potential witnesses
  • Identifying and collecting relevant documents and information, as well as disputed and undisputed fact issues that could be an issue in the case

Maintain detailed records

Even just producing crucial documents can help you prevent expensive, time-consuming litigation. Emphasize outstanding record keeping so you can save money and time down the road and prevent litigation from upending your business.

Focus on positive outcomes for both parties

You can avoid a lot of potential litigation risk simply by only entering into agreements that will result in positive outcomes for both parties. If you care just as much about the outcome the other party to the agreement gets as you do the outcome for your company, you’ll almost certainly be able to avoid litigation.

For more information and strategies to help you avoid business disputes, contact our corporate planning attorneys in the U.S. Virgin Islands.

Ravinder S. Nagi is Assistant Managing Attorney of BoltNagi PC, a full service business law firm on St. Thomas, U.S. Virgin Islands.