Managing litigation for your business
Good managers can reduce the conflict that leads to costly lawyers and courts
Liquidators in a case against Micheal Fingleton and four former Irish Nationwide directors claim and ’unusual management structure operated in the company.
Businesses that fail to manage conflict and litigation proactively may find themselves embroiled in lengthy, expensive battles with their clients, employees or third parties. They may even fall out with their lawyers.
Long drawn out litigation causes emotional hardship for managers, crippling direct legal costs and destructive indirect costs due to loss of productivity and bad publicity. If it spirals out of control, conflict and litigation may destroy a business entirely.
In order to protect their businesses, managers must be constantly aware of the pitfalls that conflict can present and try to reduce it before it spirals into litigation. If litigation becomes inevitable managers should supervise their cases proactively with the help of lawyers who share their aim of reducing conflict and maximising the economic interests and reputation of their business.
Managers can reduce the conflict that might lead to litigation by careful planning and ongoing monitoring of potential hazards. Before they start trading they must be sure that they have set up an appropriate structure for their business. While they are trading they should have a system for addressing consumer complaints in an efficient, responsive and timely manner.
If conflict does transform into litigation, managers ought to instruct their lawyers to negotiate or use alternative dispute resolution where possible, and actively involve themselves in the management of their cases as they progress through the courts.
Paying attention to the structure of your business is of huge importance. The weaknesses in the structure of the banks in Ireland due to a poor regulatory system, high leveraging and risky lending practices has had a disastrous effect on the business of banking and the Irish economy as a whole.
Recently, the liquidators of the IBRC in a case before the commercial court against Michael Fingleton and four former directors of Irish Nationwide over losses to the company of €6 billion, claim that an “unusual” management structure had operated at the INBS, allowing risky loans to be issued without prior board approval in breach of the building society’s lending policy.
The structural weaknesses in individual banks and building societies have spawned exponential conflict and litigation into the Irish economy and courts system with catastrophic results for the whole country. All managers and businesses can examine the tragedy of the implosion of the Irish banking system and learn valuable lessons from these events and examine and pay attention to their own business structure.
Addressing consumer complaints in an efficient and timely manner is vital. Two programmes on RTÉ’s Liveline last month were concerned with complaints by disgruntled Eventelephant customers. Eventelephant is an online event registration site that allows you to use its software to create your own website to market your event and process payments by credit card. Problems had arisen in relation to the processing of credit card payments by event attendees due to customer confusion over the identity of the host.