Lawsuit and Litigation Basics for Small Businesses

Lawsuit and Litigation Basics for Small Businesses

Lawsuit and Litigation Basics for Small Businesses

Partnering with other businesses can present exciting new opportunities and worthwhile ventures. Joint ventures, mergers and acquisitions and reverse mergers (also known as reverse takeovers) are some of the partnerships that businesses undertake. While these ventures are worthwhile, they can easily sour when one party breaches the business contract or when one party violates the terms and conditions of the partnership in one form or another.

When disagreements occur, it is usually in the best interests of both parties to settle the issue or issues amicably. However, it is not always possible to settle a dispute between partners and sometimes third-party intervention is necessary.

Third-party decision making processes include mediation, arbitration, and litigation. Decisions made during litigation are binding, while mediation and arbitration offer some limitation as to the power, enforceability, and weight of decisions. In addition, mediation and arbitration requires the cooperation of both parties while litigation can be unilateral if one party ignores the lawsuit.

If a financial claim between parties is small- meaning that one party wishes to claim injury or damages for $5,000 or less, that party can file a claim under the Civil Resolution Tribunal (CRT). The CRT was established under the Civil Resolution Tribunal Act. The CRT hears claims that are worth or under $5,000. In addition, claims that are filed in (BC) Small Claims Courts must be processed through the CRT if they are below the $5,000 amount. On April 1, 2019, the CRT will have jurisdiction to hear certain claims up to $50,000. Currently, the Supreme Court of BC hears claims of any amount while Small Claims Courts hear claims up to $35,000.

How Do I file a Lawsuit in the Supreme Court of BC as a Small Business?

Prior to filing a civil suit, you will want to ensure that you have conducted thorough research on the matter including some of the following documents:

• Correspondence (including notes, emails, photographs)
• Receipts
• Financial records and documents
• Telephone records

In addition to the list above, you will want to ensure that you are relying on the most up-to-date case law to support your arguments. Lastly, you will want to keep any limitation periods in mind.

Limitation periods dictate certain periods of time in which you must file your lawsuit. Other actions within a lawsuit carry limitation periods as well.

In the Supreme Court of BC, filing a lawsuit requires filing a Notice of Civil Claim. Once you have filed your Notice of Civil Claim, you must serve it on the party or parties you are suing. Following service of your claim, the party you are suing will either response or ignore to your lawsuit. They can respond with a counterclaim or they can provide their own version of facts in response to your claim. If they choose to ignore the lawsuit, you may be entitled to a default judgment.

If the party responds and the pleading period ends, discovery of documents take place and a trial date is set.

While the above information provides a general overview of litigation for small businesses, it does not provide all information necessary to navigate the litigation process. If you’re a small business requiring legal assistance in Small Claims or the Supreme Court, get in touch with one of our litigation attorneys. Call us at 604-930-9578 or 1-800-930-9986. Our experienced counsel are ready to assist you with your lawsuit.