An ounce of prevention, as they say, really is just sound business practice. Litigation can be ruinously expensive, and even “win” can devour the time and energy you need to actually run your business. It also has a nasty way of damaging your most important intangible asset, your business reputation. There is no reason to step away from an unavoidable fight, but the advice all commercial attorneys give clients is to avoid finding themselves there. Here are 10 remarkably simple steps you can take to protect your business from the risks of becoming needlessly embroiled in litigation.

1. 10 Tips to Help Your Business
CALL 1800 770 780
Avoid Litigation
http://www.owenhodge.com.au/

2. INTRODUCTION
1
An ounce of prevention, as they say, really is just sound business practice.
Litigation can be ruinously expensive, and even “win” can devour the time and energy you need to
actually run your business. It also has a nasty way of damaging your most important intangible asset,
your business reputation.
There is no reason to step away from an unavoidable fight, but the advice all commercial attorneys
give clients is to avoid finding themselves there. Following are 10 remarkably simple steps you can
take to protect your business from the risks of becoming needlessly embroiled in litigation.

3. Structure your business to protect important assets.
2
1
Most businesspeople understand that the peril of doing business
as a sole proprietor is that personal assets can be reached by
that is a reasonable risk.
It is important, however, to go a step farther, perhaps structuring
assets, such as intellectual property or real estate from the
greatest sources of risk, whatever they may be.
2
That is the place to spend your legal budget, rather than on
Without laboring the obvious, make sure that you read and
understand all contracts to which you are a party. Ask for
Remember that employment contracts may be appropriate
for key employees. Consider whether nondisclosure or
other party into Australian courts. This is when escrows,
indemnity clauses, liquidated damage agreements and

4. 3
Apropos of which, make sure that your insurance
coverage is appropriate to your business risks.
2
3
It is not just a quesion of amount, but of the kind of coverage
that your business carries.
4 Keep good records
Many disputes can be avoided by being able to quickly produce
the relevant documents. These should include contractual
agreements as well as correspondence and notes taken
contemporaneously to record the substance of conversaions
and telephone calls. This may be a good ime to review your
records retenion policy and to ensure that important
documents exist in both electronic form and hard copy.
5 Train and manage staff.
Do annual or more frequent reviews and be prepared
to terminate the employment of any individual whose
conduct could subject the business to a law suit. Make
sure that you have systems and procedures in place to
help you idenify dishonest conduct.

5. 4
Be proacive
in managing disputes before they escalate into liigaion.
Prompt and effecive communicaion can do a lot to diffuse
a situaion with an unhappy customer or business partner.
If the shoe is on the other foot and the dispute is about a
nonpaying buyer or client, negoiaing a payment schedule is
oten far cheaper and more effecive than a lawsuit.
7
6
8
Choose who you do business with
Especially for new businesses, the temptaion can be to take
any client or embrace any potenial partner who walks
through the door.
Taking the ime to know a litle more about those you
depend on, whether it is a big client, an important vendor or
a co-venturer is usually worthwhile.
Disentangling an unwise business relaionship can be very
troublesome.
Analyze past business disputes.
A periodic retrospecive review of disputes – who they
involved on both sides and what kind of transacions gave
rise to them – may help your business idenify areas for
improvement. For example, you may be able to idenify
problems with the terms of standard contracts, poor i
nternal communicaion or a failure to properly handle
complaints.

6. ,
5
Nothing personal; it’s just business9
It can be difficult for someone who has nurtured a business
from the start to separate the personal from the commercial.
If you find yourself arguing about principle, back down, turn
around and hand the mater off to someone else who can be
objecive.
10 Don’t be a jerk.
This is really a corollary of the previous two rules.
Be honest in evaluaing your own acions because no one has
the luxury of being right all the ime. Try to understand the
dispute from the other side and made adjustments or amends
as necessary.
If you are dealing with a genuinely impossible individual, don’t
be goaded into a fight. You can choose who you do business
with and in some cases, the beter choice may be to politely
decline from addiional orders or jobs.

7. GET THE HELP FROM US
1800 770 780
ohl@owenhodge.com.au
Litigation may, in some circumstances, be a necessary evil, but where your
business has the opportunity to avoid recourse to the courts, it should.
Furthermore, it can, by adopting 10 relatively simple good business practices.
If you have questions about ways to avoid litigation or how to resolve business
disputes, please contact us at Owen Hodge Lawyers to schedule a consultation
by calling 1 800 770 780.

8. INDIVID UAL AND COMMERCIAL LAW SPECIALISTS
Enhancing the lives of our clients by providing
acquisition of wealth, protection and management
of assets and the transfer of wealth throughout
generations.
CALL
1800 770 780
VIEW
www.owenhodge.com.au
VISIT
Level 3, 171 Clarence Street, Sydney NSW 2000
Level 2, 12-14 Ormonde Parade, Hurstville nsw 2220