Litigation and Insurance

3. Suing

If your business suffers loss or damage as a result of somebody else's action, you may need to consider legal action.

3.1 Debt recovery is the most common reason for suing.

• Often there is no contractual dispute. The customer simply refuses to pay or is unable to pay.
• If you sue and the debtor goes bankrupt or into liquidation in the meantime, you will probably end up paying your own legal costs, adding to what you have lost.

3.2 Contractual disputes can become extremely complicated.

• When they refuse to pay, some customers may claim that you have not fulfilled the contract in some way. Whether or not this is true, it makes it harder for you to obtain payment.
• If your business suffers as a result of the failure of another company to meet its contractual obligations, taking legal action may be the only means of redress.

3.3 You may need to appeal against your local authority or other regulatory bodies.

Trade licensing and property regulations are common problem areas. For example:

• A nightclub could be closed down for breaking any one of dozens of regulations.
• A business could be crippled by something as simple as new parking restrictions.