Traditional and Nontraditional Litigation Paper

Litigation is the process bringing, maintaining, and defending a lawsuit (Cheeseman, 2010). Litigation is time consuming, difficult, and costly process requiring strict rules to be observed. Litigation uses the court system to resolve disputes between parties. Litigators are trial attorneys that represent clients. The plaintiff claims that the actions of the defendant cased harm. The alternative to litigation is nontraditional or alternative dispute resolution (ADR).  Alternative dispute resolution can be used in context of negotiation, mediation, and arbitration. The author will compare and contrast litigation to non traditional forms of alternative dispute resolution. The author will address the risks associated with litigation and how alternative dispute resolution can reduce risks.   


Controversies that are legally authorized and decided by the court of law are called lawsuits. Litigation is when one individual or organization sues another for damages. The reason why an individual or organization enters into a lawsuit is to enforce a right or remedy an injustice. During an ongoing trial respondent, petitioners, applicants, defendants, and plaintiffs are all called litigants.  The litigants can represent themselves or hire legal counsels who are called litigators.  An experienced attorney has the knowledge of the policies, rules, and laws that govern the litigation process.  The litigation process is composed of phases to include: pleading, answer, discovery, motion, and trial. In the pleading phase a petition or complaint is served to the defendant.  The defendant files their answer and requests information regarding the case. In the discovery phase information is exchanged and reviewed. The oral discovery phase or deposition is when both parties ask each other questions that are transcribed by a court reporter. In the motion phase either party may ask for a dismissal or mediation. The last step in the litigation process is the trial when the dispute is resolved by a judge or jury.

Alternative dispute resolution (ADR)

   Alternative dispute resolution enables individuals and organizations attempt to resolve disputes without using court intervention. A negotiation helps two opposing parties to meet and settle disputes. In a negotiation the two parties control the process and the solution to the conflict. An individual or organization can use mediation to help resolve disputes between two parties. Hills (2011) stated, “Mediation involves meeting with a neutral third party who helps the parties to reach an agreement. The role of a mediator is as a facilitator rather than an adjudicator” (p.543). Mediation usually uses a trained negotiator to facilitate the meeting of the two opposing parties. Arbitration is an alternative to litigation and involves an arbitrator instead of a judge or jury. The arbitrator’s decision is final and can’t be appealed unless the arbitrator was proven to be biased. The arbitrator’s decision can be challenged if an individual files a motion to vacate within three months of the arbitrators decision.

Litigation risk

            Litigation proceeding are risky because they could have a negative impact on an individuals or organizations image.  Litigation is a costly process and can have a negative impact on an organizations bottom line. Litigation can also be aggravating and inconvenient. Court orders to produce documentation can drain resources away from an organization more profitability obligations.  The organization may loss time that could have been spent creating more profits. Confidential records may become public record hurting relations between the business and its customers. The organization maybe forced by the court to declare bankruptcy and shut down. The judge and jury may not be sympathetic to the organizations case.

Reduce risk with ADR

            The main reason to use alternative dispute resolution is to reduce risks that are associated with the litigation process. The disputes can be resolved outside of court saving the organization on legal fees. The organization doesn’t have to worry about the organizations image being tarnished through the litigation process.  Alternative dispute resolution usually is shorter than litigation because it involves only the mediator and the parties involved. The author has discussed the litigation process and the risks involved in the process. The author has discussed the alternative dispute resolution process and how it can reduce risk.


Cheeseman, H. R. (2010). Business Law. Legal Environment, Online Commerce, Business Ethics, and international issues. (7th ed.). New York, New York: Pearson Education.

Hills, S. (2011). Civil litigation and alternative dispute resolution. Keeping Good Companies (14447614), 63(9), 541-544.

Legal Forms of Business Paper

When an entrepreneur decides to start a business there are several options that need to be considering before forming an organization.  The entrepreneur needs to look at what liability and risks may the business encounter in the future. The entrepreneur needs to look at personal assets that may be at risk if the company gets sued and how to protect those assets in case of a lawsuit. The author of the paper will create scenarios that establish why an entrepreneur would create a corporation, S corporation, franchise, limited liability company, limited liability partnership, partnership, and sole proprietorship.


An entrepreneur is planning on starting a service company such as a construction company, auto repair, auto detailing, or cleaning service. The potential for lawsuits is very high and any customer can file a lawsuit at any time for a variety of reasons. The entrepreneur is working with a team that is knowledgeable in how to run a service company and business law. The entrepreneur has found individuals that are willing to invest in the company and believe in the entrepreneur’s vision. The entrepreneur needs to protect personal assets of everyone involved in the company.

In the above scenario the entrepreneur would set up a corporation because the corporation is a separate entity from its owners. The corporation will give the entrepreneur, shareholders, and owner’s protection from loosing personal assets in a lawsuit. In order to maintain the protection of the corporation needs to be run as a separate entity. The corporation needs to be well organized and managed. The organization needs to be maintained with care by everyone in the organization. The corporation needs to operate within the law and not give a court an excuse to pierce the corporate veil. If the corporate veil is pierced by the court the owner’s and shareholders personal assets are vulnerable in a lawsuit. The benefits of a corporation are that it can raise capital through the selling of stocks. The company can benefit from corporate deductions from employee benefits and health plans. The corporation provides the owners with more credibility than other types of organizations. 

S Corporation

The entrepreneur is thinking of starting a bakery and has only ten employees. The entrepreneur is a United States Citizen and is worried about double taxation. The owners due want to have the protection that a corporation provides without having to deal with double taxation. The owners would like to right off the start up cost of starting the business.

In the above scenario the entrepreneur would start an S corporation. The Small business corporation status allows an entrepreneur to start a corporation without having to worry about the corporate tax structure and double taxation. The business taxes pass through to the owner’s individual taxes which allow the owners to avoid double taxation. The owners would be allowed to deduct start up costs on their income taxes. The S corporation would provide protection against liabilities. However, the owners could be held personally responsible for their actions. 


An entrepreneur wants to start a business but doesn’t want to spend the time or the effort in branding the company. The entrepreneur wants to use the reputation of an existing organization that is successful. The entrepreneur wants a successful company to show him how to establish a business with a proven track record. The entrepreneur doesn’t want to reinvent an organization from ground up. The entrepreneur wants to use a system that has been proven to work in the industry.

In the scenario above the entrepreneur would start a franchise. The franchise reduces the risk associated with starting a business. The franchisor would provide the entrepreneur with training needed to be a successful franchisee reducing the learning curve. The franchisor will provide the franchisee a network of resources and update the franchisee on new business strategies.

Limited Liability Company


The entrepreneur wants to start an organization that has liability protection. The entrepreneur wants an organization that has pass through taxation. The owners get taxed because the organization isn’t a separate tax entity.  The owners don’t want to worry about double taxation and want protection for personal assets.

            In the above scenario the entrepreneur would set up a limited liability company. The company would provide protection for personal assets while preventing double taxation. Setting up an LLC varies from state to state and the entrepreneur needs to find the procedure for the entrepreneur’s individual state. In some states certain professions maybe restricted from forming a limited liability company.

Limited Liability Partnership

            An entrepreneur wants to start a business and raise capital through partnerships. The owner wants to maintain control of the company while providing liability protection for the partners. The partners want to invest in the company without being personally liable if the company gets sued. The partners want to share in the profits of the organization but don’t loss more than the partners investment in the organization.

            In the above scenario an entrepreneur would start a limited liability partnership. Cheeseman (2010) stated, “An LLP is created formally by filing articles of partnership with the secretary of state of the state in which the LLP is organized. This is a public document. The LLP is a domestic LLP in the state in which it is organized. The LLP law of the state governs the operation of the LLP” (p.624). The owner would be liable for the operations of the business while the partners would have limited liability in the amount that they invested into the organization.


            An entrepreneur wants to start a business that is simple and inexpensive to set up. The entrepreneur wants to work with family members to start a family business. The entrepreneur and partners are planning to pool resources together in order to take advantage of greater barrowing power. Each partner has specific strengths that can help the business move forward and be successful.

            In the above scenario the entrepreneur would start a partnership.  Hauser (2011) stated, “There needs to be a good fit between the firm and the partner to create the best long-lasting situation. It is similar to a marriage. The firm’s long-term goals and core values should be clearly communicated, easily understood, and regularly practiced–and they should align with your own goals and values. ” (p.15). The partnership need to be cautious because the partners are liable if the company gets sued.

Sole proprietorship

            An entrepreneur wants to get into business with little paper work and start up cost. The entrepreneur doesn’t have a partner and will be running the business alone. The entrepreneur is a handy man and usually spends the day making minor home repairs.

            The entrepreneur would start a sole proprietorship. The entrepreneur is setting up a very basic business structure that can be used to make money. The entrepreneur obtain business license and permits to stay legal with the state. The entrepreneur is personally liable if sued and needs to have insurance to cover expenses if a mishap occurs. The author has addressed different scenarios that an entrepreneur could use to start a business.      




Cheeseman, H. R. (2010). Business Law. Legal Environment, Online Commerce, Business Ethics, and international issues. (7th ed.). New York, New York: Pearson Education.

Hauser, C. (2011). Preparing for Partnership Buy-In: Exploring the Important Questions. Woman Advocate, 17(1), 15-18.

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