What Caused Lawsuits To Be A Business Necessity?

40 million lawsuits are filed in the USA every year. Take a look around the world and the number triples. Lots of suits are personal actions, but the vast majority are business-related. Nowadays, going to court is a legitimate tactic not just to limit the damage but to succeed. Rightly or wrongly, corporations are using the justice system to their advantage. So, what has caused owners and CEOs to jump the gun? The answers lie in the fine print. With that in mind, here are the causes that have made lawsuits a necessity of modern businesses.

They Work

It’s easy to forget that lawsuits work for big businesses. According to stats by Fast Company, only 1% of workers win in court. Even as a conservative number, it means that companies are victorious more than 90% of the time. SEO and social media are essential yet don’t have the same hit rate as a lawsuit. On the whole, the burden of proof is on the claimant to show that there was wrongdoing. As corporations hardly sue their employees, this puts the ball in the CEOs’ court. As a result, businesses are happy to go to trial because they know the odds are in their favour.

Money Vs Expenses

A common suit these days involves a fight between two competitors. Intellectual property, for instance, is a huge deal as it’s potentially lucrative. However, rivals will steal concepts to ensure they don’t lose their market share. Usually, it’s a big firm that is the thief and the SMB that is on the receiving end. Unfortunately, a lawsuit doesn’t help the small and medium-sized companies for one reason: money. Going to court is expensive and SMBs don’t have the capital. Huge corporations do, which is why they use the justice system to bully rivals out of the industry. It’s sad but true.

Media Coverage

As businesses have crept into the public sphere, their reputations have taken a hit. Thanks to social media, criticising a company is straightforward and the consequences instant. Businesses obviously want to limit the damage as much as possible as bad feedback has an impact on profits. So, lots of bosses use defamation of character as a way to prevent libel and slander. There’s no doubt the prospect of facing legal action makes people think before they tweet. Therefore, the number of cases of non-frivolous defamation suits has gone down in recent times.

The System

Ordinary people see the justice system as strict and inflexible, but that isn’t true. For businesses, it can be bendy as well as accommodating. Take the USA and the British courts. In America, it is much harder to win a defamation case because of the system. Britain is a haven for lawsuits, especially from a corporate point of view. Therefore, companies want to file suit in the UK and increase their chances of a victory. And, they can as long as there is a proof of readership or sales in the country. The law can be flexible for the people that know how to use it effectively.

Can you think of any more reasons why lawsuits are used throughout the industry?

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