5 Ways Commercial Litigation Differs from Traditional Litigation

We live in a world bounded by laws.

Embezzled funds from your boss? You face a lawsuit. Violated a traffic light? You go to court. Experienced harassment at work? You file a lawsuit. Your restaurant is facing jeopardy because an employee leaked your secret recipe? You take him to court.

No matter how little, any misunderstanding that leads to a legal proceeding can be very stressful and expensive.

What is Litigation?

Litigation is the process of taking legal action to a court of law. It often involves one party accusing another of damages taken, whether physical or emotional, to obtain justice or monetary compensation.

Simply put, it is what happens when you sue somebody.

There are different litigation types, but the term generally falls into two major categories — traditional litigation (also known as civil litigation) and commercial litigation.

What are Their Similarities?

To fully understand the difference between the two, it’s a good idea to know their similarities.

Generally, commercial litigation advances in the same manner as traditional litigation. Both types involve the same procedures, such as:

  • Procuring the aid of an attorney.
  • Filing a complaint.
  • Conducting investigations to secure factual information.
  • Deposition of witnesses and listing of experts.
  • Court motions.
  • Presentation of evidence.
  • Standing before a judge or a jury.
  • Post-trial motions and so on.
Both can stand before a judge or a jury. 

How Do They Differ?

Since they closely resemble each other, the contrast between these two processes is minimal to none. Nevertheless, you can still set them apart.

Here are five ways on how commercial litigation differs from traditional litigation.

1. It Involves Businesses

The main deciding factor that differentiates commercial litigation is that it entails businesses or companies instead of individuals. Common examples include:

  • Contract disputes such as breach of contract.
  • Rights to intellectual property.
  • Leakage of trade secrets.
  • Tortious interference with business operations.
  • Partnership dissolution and business divorce.

Traditional litigation usually involves a person filing a complaint against another person. Since it only affects a small number of people, it is more common and quickly resolved. Most cases consist of:

  • Incidents that lead to personal injury
  • Landlord and tenant disputes.
  • Lawsuits related to divorce.
  • Medical malpractice.
  • Complaints regarding any form of harassment.

2. Type of Court

Because of the broad coverage of parties involved, most companies file commercial litigation cases to a federal court rather than a state court. A state court is better suited for minor and civil matters.

3. More Complex

Settling a commercial disagreement is a long and extensive process. Participating parties must submit financial records and accounting papers that are carefully examined by the court. Additional data, such as insurance coverage, lending, gross income, and tax compliance, also needs to be presented. Sometimes, it is essential to hire financial experts to help analyze these documents.

4. More Expensive

It should be obvious enough that a business dispute will cost you a lot more than a personal complaint. Besides your attorney, you also need to pay for the discovery process, forensic specialists, and accounting experts.

5. Takes Longer

As stated earlier, litigations involving business can be time-consuming. Unlike traditional litigation, which is minor and straightforward, cases often take unexpected twists and turns, prolonging the whole process. These extra detours might take months or even years to conclude.

Court is not always necessary.

To Sum It Up

Commercial litigation costs more, takes a lot of time to settle, and is more complicated than traditional litigation. If you find yourself in such situations, don’t panic. Commercial disputes do not necessarily need to escalate to the court. The first thing you should do is consult a lawyer and seek legal advice.