Commercial Litigation: What You Need to KnowTeam
Commercial Litigation: Operating your own business can be both rewarding and overwhelming. The realities and risks of the modern business environment make commercial disputes inevitable. It can take different forms, but can include disagreements about:
- Corporate Actions;
- Shareholder Actions;
- Sale and Purchase of Goods;
- Intellectual Property Rights; and
- Fiduciary Duties
Like any other conflict, commercial disputes can escalate to requiring legal action for resolution. If this describes your situation, you might need to start and hire a commercial litigation lawyer to guide you through the process.
You might have some questions, such as:
- What is commercial litigation?
- Steps in commercial litigation?
- Alternatives to commercial litigation for resolving your business-related disputes?
This article answers those questions and explains why you should hire a commercial litigation lawyer to help with the process.
What is Commercial Litigation?
Commercial litigation is a form of civil action meant specifically to resolve business-related disputes. There are many explicit laws regulating business activity and allowing businesses to seek damages and relief.
Some examples of laws forming the basis include the:
- Ontario Business Corporations Act
- Canada Business Corporations Act
- Ontario Partnerships Act
- Ontario Sale of Goods Act
It is also the way to pursue damages and relief for business-related torts, including:
- breach of contract
- intentional interference with economic relations
- breach fiduciary duty
- Confidentiality breach.
- Enforcement of intellectual property rights
- intentional interference with economic relations; and
It is the way businesses can enforce their legal rights and pursue damages against individuals or other businesses. Civil litigation in general is broader and can be between individuals for a variety of reasons but are not business-related.
However, the steps in the commercial litigation process can be the same as most civil litigation.
What Are the Steps in Commercial-Litigation?
Civil litigation in general sets out procedural steps in the Ontario Rules of Civil Procedure. Based on these general rules, the 5 basic steps involved usually:
- Exchange of Pleadings
- Examinations for Discovery
- Mandatory Mediation (Toronto, Ottawa, and Windsor-Essex)
- Pre-Trial Conference
The exchange of pleadings involves one party starting the process by filing, issuing and serving a statement of claim or by application. The other party then serves their defence or response. In some cases, the suing party can also serve and file a reply to address any new facts raised in the defence.
The examinations process is where the parties exchange documents and question each other for admissions relevant to the commercial litigation.
If your commercial litigation takes place in Toronto, Ottawa or the Windsor-Essex court regions, you have 180 days from the first filing of defence to set the matter down for mediation. This is a process where a third-party neutral facilitator tries to help the parties settle their commercial litigation before trial.
After discoveries and mediation, the suing party can file a trial record to set the commercial litigation for trial. After a party files the trial record, the court will then schedule a pre-trial conference. It is like mediation except there is a judge acting as the neutral facilitator. If the parties don’t settle at the pre-trial conference, the court then schedules a trial date.
The final step in commercial litigation is a trial or hearing for resolving the business dispute. The parties prepare their legal arguments, make their submissions, present their evidence, and allow a jury or judge to make their decision. Those decisions may be subject to appeal, but once all appeals are exhausted the decision is final.
Despite how similar commercial litigation can be to standard civil litigation, there can be differences in the process in some cases.
How Is Commercial-Litigation Different from Civil Litigation?
It has a unique advantage that other civil litigation does not – specialized judges and expedited proceedings. The Ontario Superior Court of Justice established a specialized Commercial List in 1991 comprised of specialized judges who can assist with managing complex commercial litigation.
Commercial litigation set down on the Commercial List is subject to specific procedural rules and practice directions aimed toward faster commercial litigation. Some involve significant stakeholder interests requiring prompt and specialized decision making.
Parties can usually volunteer to set their case down on the Commercial List. Despite the availability of the Commercial List and its expedited proceedings, commercial litigation does not always need to be pursued fully to trial.
There are alternatives to commercial litigation that can achieve favourable results quicker.
What Are the Alternatives to Commercial-Litigation?
Commercial litigation is typically used together with negotiation to arrive at a resolution before trial. Parties can settle their matter at any point in the commercial litigation process.
Before going straight into commercial litigation, you can send a demand letter to the other side stating your legal position and propose an offer to settle the commercial dispute. If negotiations fail at this stage, the party making the demand can start commercial litigation while continuing to negotiate.
Most modern commercial contracts specifically allow or require all related disputes to be resolved by alternative dispute resolution processes. Examples include mediation, arbitration or a mix of the two.
Mediations are voluntary negotiations with a neutral facilitator helping the parties resolve their dispute. The mediator is only there to help the parties agree on the terms of the settlement, not to render a binding legal decision.
Arbitration on the other hand is more like a quicker and private court – it is not open for the public to attend like regular court cases are. The parties would submit to the authority of an arbitrator to make a final binding decision. Like a regular trial, the parties would make their case to the arbitrator.
The arbitrator then decides the dispute, subject to limited appeal to the courts.
Deciding on what to do before or during commercial litigation might seem straightforward, but seldom is. Whether you’re negotiating or going through high-stakes commercial litigation, having an expert advocating for your business interests and providing tactical legal advice is key.
Why Hire a Commercial-Litigation Lawyer?
The lawyers have the unique expertise and knowledge needed to maximize your business’ best interests for their commercial litigation. A lawyer understands the substance of the business dispute itself and every procedural step needed to achieve the desired result.
Knowing the law and the legal process is what will help you achieve your desired result in your commercial litigation. The sooner you consult and retain a lawyer, the more opportunity you provide them to help you make strategic decisions. In turn, the lawyer will help you lower your risks and increase your likelihood of success.
So why should you hire a lawyer? Because when you have hundreds of thousands or more on the line, you can’t afford to have a legal expert advocate and navigate the commercial litigation process for you. It’s no different than asking an architect to design a bridge or an accountant to work on your teeth – the cost far outweighs the benefit.
Business-related disputes are almost inevitable in the modern business world. When you need to escalate that dispute to legal action, you can start commercial litigation. This process is similar to the civil process but can be placed on the Commercial List to have it resolved in a prompt and cost-effective manner.
You can also resolve your commercial litigation at the early stages of the dispute, or throughout the process using alternative dispute resolution processes. You can use straightforward negotiation or mediation to help settle your matter, or arbitration to render a binding decision privately instead of trial.
No matter how you look at it, consulting and retaining a lawyer to assist with your high-stakes business disputes lowers your risks and increases the chances you’ll succeed. Our experienced lawyers at Achkar Law regularly help our clients negotiate and navigate the process to achieve their desired results.
If you need assistance with your business dispute our Employement Lawyers at Achkar Law can help. Contact us by phone toll-free at +1 (800) 771-7882 or email us at [email protected] and we will be happy to assist.
If you are a small or medium-sized company looking for full-service support with same day response, visit our CLO Program page for our strategic solutions.