A Business Owner’s Guide to Litigation (2025)

Maybe you’ve just opened your inbox and see the subject line: “Legal Notice.” You scrolled through legal jargon you don’t understand, and one question keeps spinning in your mind—what is litigation, and what does this mean for my business?If you’re here, maybe you’re facing a conflict you didn’t ask for. Maybe a client isn’t paying. Maybe a partner broke a promise. Whatever it is, it feels personal—and messy.But you don’t need to panic! You need to understand the process, get grounded, and take smart, aligned action. Here’s what every business owner needs to know about litigation. 

So, What is Litigation?

Simply put, litigation is the legal process of resolving disputes in court. In business, it usually means one party (the plaintiff) is suing another (the defendant) for a perceived harm that might be tied to: 

• Breach of contract
• Intellectual property disputes
• Employment disputes
• Shareholder disputes
• Partnership disputes
• Contract disputes
• Breach of fiduciary duty
• Discrimination
• Fraud

Litigation falls under civil law, not criminal. It’s about money, contracts, or behavior, not criminal charges. And while it might sound adversarial, 95% of cases settle long before trial. In fact, litigation can be a path to resolution, not just conflict.However, for the other 5% of cases, going to court is the only way to resolve the issue. In that case, you’re going to want a litigation attorney. 

What is a Litigation Attorney?

A litigation attorney represents businesses during legal disputes. That includes: 

• Filing lawsuits
• Responding to claims
• Managing court filings
• Guiding the entire process from start to finish 

But for conscious business owners, it’s about more than legal paperwork. You need someone who sees the full picture. A strong business litigation attorney offers legal advice and helps you understand your options, weigh the risks, and choose a path that aligns with your business, your values, and your long-term goals.

9 Common Types of Litigation Businesses Face 

If you're dealing with a legal dispute, it helps to know what kind of litigation you're facing—and what that means for your business.

#1 - Breach of Contract

This is the most common reason businesses end up in court. A breach of contract happens when one party fails to uphold the terms of a legally binding agreement.Example: A vendor agrees to deliver 5,000 units of product by a certain date but misses the deadline or delivers defective goods. You may be entitled to damages for lost revenue, replacement costs, or reputational harm.Contracts aren’t just formal documents—they’re the backbone of trust in business. When they’re broken, litigation can help enforce your rights or defend your actions.

#2 - Intellectual Property (IP) Disputes

These cases involve unauthorized use of your business's trademarks, copyrights, trade secrets, or patents—or accusations that your company has infringed someone else’s.Example: Another company uses a logo that closely resembles yours, creating confusion in the marketplace. You might need to pursue litigation to protect your brand and stop the infringement.For businesses built on innovation, creativity, or brand equity, IP disputes are high-stakes—and protecting your assets is worth the fight.

#3 - Employment Disputes

Employment-related litigation can arise from allegations of wrongful termination, harassment, unpaid wages, retaliation, or violations of employment agreements.Example: A former employee sues your company for wrongful termination, claiming they were let go in retaliation for reporting discrimination.These cases often involve complex documentation, company policies, and emotions on both sides. They also tend to attract public attention, so handling them with care is essential.

#4 - Shareholder Disputes

Shareholder litigation typically arises when investors believe their rights are being violated, or when there's conflict over the direction of the company.Example: Minority shareholders file a lawsuit claiming the majority owners are mismanaging funds or making decisions that dilute their interests unfairly.These disputes can be deeply personal, especially in smaller or family-run companies, and may threaten both the business’s future and leadership’s credibility.

#5 - Partnership Disputes

Business partnerships don’t always go as planned. When partners disagree on finances, roles, decision-making, or future direction, litigation can follow.Example: One partner accuses the other of diverting company funds for personal use, or making major decisions without agreement.Litigation may be necessary to dissolve the partnership, divide assets, or enforce terms in the original partnership agreement. These cases can get messy fast—especially when the personal relationship is still in play.

#6 - Contract Disputes

Not every contract issue involves a clear breach. Sometimes the dispute is about interpretation—what was promised, how it's being delivered, or whether both parties met their obligations.Example: A service provider argues that they fulfilled the contract’s terms, while the client claims the deliverables weren’t up to standard.These cases hinge on the wording of the agreement and how it’s interpreted. Clear contracts and strong documentation are your best defense.

#7 - Breach of Fiduciary Duty

Certain roles in a company—like executives, board members, or managing partners—have fiduciary duties to act in the best interest of the business or its shareholders. Breaching those duties can trigger litigation.Example: A CEO uses confidential business information to start a competing company, violating their duty of loyalty to the business.These cases can be severe, especially when large financial losses or investor trust are involved. Courts take fiduciary duties seriously—and so should you.

#8 - Discrimination

Businesses can be sued if they’re accused of discriminating against employees, clients, or customers based on protected characteristics like race, gender, age, religion, or disability.Example: An employee files a claim alleging they were passed over for promotion because of their age, even though they were the most qualified candidate.Discrimination lawsuits can damage morale, reputation, and employee trust. Prevention through strong HR practices is key—but so is a well-prepared response if you’re facing one.

#9 - Fraud

Fraud litigation arises when one party accuses another of intentionally deceiving them to gain an unfair or unlawful advantage.Example: A vendor misrepresents their qualifications or capabilities in a proposal to win a contract, then fails to deliver.Fraud claims can lead to not only civil penalties but also criminal investigations. These cases require a careful, facts-first approach to protect your business’s integrity and future.

8 Steps in the Litigation Process

When you know what’s coming, the process feels a lot less overwhelming. Here’s how litigation usually plays out, step by step.

Step #1 - Filing a Complaint

The lawsuit starts when one party files a complaint with the court. This legal document lays out the claims and what the plaintiff wants. The other party—the defendant—gets served and must respond by a specific deadline. This kicks off the formal case.

Step #2 - Jurisdiction

The court must have the legal authority to hear the case. If the parties or subject matter fall outside its reach of jurisdiction, the case can’t move forward there. Getting this part right matters. Otherwise, you waste time and money in the wrong courtroom. 

Step #3 - Settlement

Many cases settle before they reach trial. The parties can negotiate directly, or use attorneys or mediators to reach a resolution. Settling doesn’t mean giving up. It means weighing the risk and cost of the trial against what resolution you can create now.

Step #4 - Discovery

Both sides gather evidence. That includes documents, emails, contracts, and witness statements. Discovery often takes the most time and reveals the most truth. What you find here can make or break your case.

Step #5 - Trial

If no one settles, the case goes to court. Both sides present evidence and question witnesses. Then the judge or jury decides. Trials feel high-stakes, and they are. But with solid prep and strategy, you can walk in with confidence.

Step #6 - Judgment

After the trial, the court issues a judgment. This lays out who wins, what they get, and what must happen next. Sometimes, that includes money. Other times, it means specific actions the losing party must take.

Step #7 - Appeals

If one side believes the court made a legal error, they can file an appeal. This asks a higher court to review the case. Appeals don’t retry facts. They review decisions. And they follow strict deadlines.

Step #8 - Enforcement

Winning a judgment doesn’t always mean you get paid. If the other party doesn’t comply, you may need to enforce it through the courts. That could include wage garnishment, property liens, or other legal tools to collect the amount awarded in the judgment.

Common Misconceptions about Litigation

Most business owners don’t deal with lawsuits daily. That’s why the myths stick around. Let’s clear up a few.

“Litigation means I’ve failed.”

No, it doesn’t. Disputes happen—even when you lead with clarity and compassion. Litigation just means the issue needs a legal container. You can still handle it with intention and integrity.

“I can’t afford to litigate.”

Litigation does cost money, but ignoring problems usually costs more. Letting a contract breach slide or staying silent to avoid confrontation can drain your business energetically and financially.

“Lawsuits always end in trial.”

Most don't. Courts often encourage settlement, and many disputes are resolved through negotiation or mediation. Trial is just one possible path, not the only one.

“It’s out of my control.”

Not true. You choose your legal team, your response, your tone, and your goals. Litigation doesn’t have to be aggressive or chaotic. With the right guidance, it can stay aligned with your values.

“I should avoid conflict at all costs.”

Avoiding conflict isn’t the same as protecting your peace. Sometimes, setting a firm boundary—legally—is the most grounded move you can make. Conscious leadership includes knowing when to speak up.

“Legal action goes against how I do business.”

Taking legal action doesn’t mean abandoning your ethics. It’s possible to honor your intuition, protect your business, and still handle litigation in a way that reflects who you are as a leader.

Alternative Dispute Resolution (without Litigation)

You don’t always need a courtroom to settle a conflict. Most business disputes are resolved without ever going to court. If you want to protect your business and your energy, these two options may serve you better.

Mediation

Mediation brings both parties to the table, with a neutral third party guiding the conversation. The goal is simple: find a resolution you can both live with. Mediation works well when you want to preserve the relationship or when you’re willing to compromise without giving up what matters most. It’s confidential. Less expensive. And much faster than the court. You stay in control of the outcome instead of handing that power to a judge.

Arbitration

Arbitration looks more like a trial, but happens privately. Each side presents its case to an arbitrator (or a panel), who makes the final decision.This process still moves faster than the court, and often costs less. But unlike mediation, the arbitrator's ruling is usually binding. That means no appeals. Some contracts even require arbitration, so check your agreements before assuming you’ll go to court.If staying out of litigation matters to you—and it does for a lot of conscious business owners—both of these options offer structure without the public exposure, stress, or cost of a full lawsuit.

What is Litigation: Frequently Asked Questions

What does ligation mean in law?

Litigation in law refers to the process of resolving legal disputes through the court system. It involves one party filing a lawsuit and the other responding, leading to a resolution by a judge or jury if the case doesn’t settle.

What is the difference between litigate and sue?

To sue means to file a lawsuit. To litigate means to participate in the entire legal process, including filing, responding, discovery, court hearings, and possibly a trial. Suing starts litigation; litigating is the whole journey.

What do litigators do?

Litigators are lawyers who manage legal disputes. They investigate claims, file lawsuits, represent clients in court, handle negotiations, and guide the legal process from start to finish to protect their clients’ interests.

Protect Your Business with Wick Law Offices, LLC

You’ve worked hard to build something real. When conflict threatens that, you don’t need more chaos, you need clarity. Let’s protect what you’ve built—without losing your center in the process!