The primary difference between civil litigation and commercial litigation is that civil litigation is a lawsuit between individuals to enforce a legal right in which the plaintiff seeks payment from the defendant, whereas commercial litigation involves businesses or companies.
Despite dealing with different parties, commercial litigation cases are more complex than just filing a lawsuit against someone else. Check out the full similarities and differences.
Similarities of Civil and Commercial Litigation
The similarities of civil and commercial litigation generally include the same processes, including the following:
• Working with a commercial litigation attorney
• Conducting investigations based on facts
• Researching applicable laws
• Sending and receiving demand letters
• Engaging in settlement negotiations
• Filing suit
• Conducting discovery
• Participating in motion practice
• Putting the case before a judge or jury
• Filing post-trial motions
• And more
Commercial and civil litigations differ in their complexity. Instead of dealing with just individuals, businesses involved are typically more specialized, both legally and factually. It’s often that this type of litigation is also filed in federal court and can also be a class action or multi-district litigation.
Commercial litigation can also take unexpected paths and go on for years, compared to civil litigation. This type is also more expensive due to the number details, including cost of forensic experts and discovery (especially e-discovery).
Different Types of Commercial Litigation
All of the following include different types of commercial litigation:
• Bad Faith
• Breach of Fiduciary Duty
• Class Actions
• Employment and Labor
• Insurance Coverage
• LLC Member Disputes
• Product Liability
• Restrictive Covenant
• Securities Litigation
• Tax Disputes
• Trade Secret and Unfair Competition
• Shareholder Disputes and Derivative Actions
• Real Estate, Land Use, and Environmental Litigation
• Privacy, Cybersecurity, and Data Breach
• Partnership Disputes
• Intellectual Property and Patent Infringement
• Fraud and Misrepresentation
• Business Torts
• Breach of Contract
• Aviation Disputes
These certainly don’t include all of the different types of commercial litigation, but they are among the most common that arise during business disputes.
In politics, everything including laws, rules and regulation, political administrations, economy, and business landscapes change. Commercial litigation is no exception. Some areas are ready for change and others already have.
Statistics have shown that the volume of litigation and the time required to solve these cases is increasing. Court statistics show that the number of civil case filings has increased 5% in the fiscal year of 2016. The median time filing to disposition for these civil cases increased to 9.2 months, up from 8.8 in 2015.
All of the following types of commercial litigation cases have increased and are expected to continue growing
1. Cybersecurity and Data Breach Litigation
Due to the increasing frequency and scale of cyber-attacks and data breaches, the number of cybersecurity and data privacy litigation cases is expected to increase dramatically. According to IMB, the average total cost of global data breach has hit $3.62 million and the average cost of each lost or stolen item is $141, factoring in expenditures (like litigation costs).
Despite these numbers, states have passed laws to protect consumer data, providing them with additional relief for data security breaches. Lawsuits have increased as a result.
2. Employment Litigation
These types of disputes are increasing and they are long, expensive, and harmful to the employer’s reputation. Despite this trend, it’s expected to become more common.
According to a study from Hiscox, the average employment claim takes about 275 days to resolve and costs up to $125,000 to do so. For the claims that are not able to be settled, the judgment is about $200,000, in addition to the cost of a defense lawyer. On the other hand, about 25% of employment cases can result in $500,000 or more.
According to the same study, companies based in the U.S. have an 11% chance of having a claim filed against them by an employee. Some states are higher than others, the highest being New Mexico at 66% and the southeast region of the country averaging 25%.
3. Securities Class Actions
According to an Uptick case study, plaintiffs had filed 270 federal securities cases in 2016, up from 44% in 2015. The same report showed that 3.9% of U.S. exchange-listed companies were involved in class action filings in 2016, above the average of 2.8%.
What to Know About Commercial Litigation
For the benefit of all plaintiffs, commercial litigation cases will continue and it’s important for all parties to develop a strategy, keeping their goals in mind. When doing this, every possible outcome must be considered. Of course, a successful outcome will differ for each party and situation as well as the company and its objective.
Work with a Litigation Attorney
When an individual or business faces the threat of a lawsuit, it’s crucial to contact a litigation attorney as soon as possible. They will be able to coordinate and monitor the gathering of evidence, preserving relevant, electronically stored information, and retaining of appropriate experts. If you are in the Schaumburg, IL area and in need of an experienced litigation attorney, contact Allen Gabe Law, P.C.
Allen has years of experience in business litigation and can help in a number of cases, including breach of contract, business and corporate disputes, insurance disputes, landlord tenant disputes, collections, and more. He will walk you through the decision making process between whether to settle or litigate disputes. If you choose to litigate, he will prepare your case for trial and help you decide how and if to settle during the proceedings.