Can’t We All Just Get Along? Settlement and Negotiation

Motorola and Huawei have become the most recent companies to drop their litigation against one another and focus on building a business partnership instead of a legal case. It seems the two companies entered into an agreement over ten years ago. For a while things went well, Motorola sold Huawei products and purchased Huawei technology. Then things went badly, really badly. Motorola sued Huawei and accused them of stealing trade secrets; Huawei sued Motorola and accused them of leaking confidential information. After duking it out in court for months, the companies managed to see eye to eye, dismissed their lawsuits, and continued their relationship as business parties.

This scenario is nothing new. Businesses sue each other every day and, like most lawsuits, they usually settle well before reaching trial. What is unfortunate is that these businesses need to resort to litigation in the first place. Litigation is expensive, it is time consuming, it is often slow, and it is almost always frustrating to the parties involved. Courts have specific procedures that must be followed, papers must be filed with the right size margins and the right font styles. Lawyers have to be paid, experts have to be paid, court reporters have to be paid. And the parties have to spend their time dealing with the conflict instead or growing their businesses.

Instead of spending time and money involved with litigation, the parties could be negotiating a business agreement prior to litigation. If the parties are lucky enough to anticipate conflict arising in the future, a carefully drafted agreement may spell out the rights and responsibilities of the parties and provide a platform for dialog between the parties so that many issues can be worked out before they arise. In the more common scenario of parties recognizing a conflict only after it has arisen, dialog between the parties can be conducted with an eye toward reaching a resolution instead of merely rehashing all of the wrong that has been committed.

This is not to say that litigation is always unnecessary. In fact, quite the opposite. Sometimes filing a lawsuit is the only way to bring a party to the table and make them realize that there is a real problem that needs to be dealt with. Sometimes a lawsuit must be filed so that a party will talk to an attorney and realize that they really did do something wrong.

The point is, initiating a lawsuit is far from the silver bullet of righting a wrong. When presented with a conflict, the parties must determine what they really want. The lawyer’s job is to help them determine how to get it. And litigation should not be the only arrow in an attorney’s quiver. Pre-suit agreements and mediation can be incredibly powerful tools to avoid conflict, save money and keep the focus on growing your business.

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