What is the Difference Between Commercial Litigation and Civil Litigation?

what is commercial litigation

There are many different types of litigation. Commercial and civil litigation are two of the most common types.

When two people are involved in a dispute and there is a lawsuit filed to defend a legal right and the plaintiff demands financial compensation, it is civil litigation.

So, what is commercial litigation then?

Commercial litigation is handled very similarly to a civil litigation matter, except there are companies or businesses involved rather than individual people.

Commercial litigation matters are almost always complex, and it’s important to retain a skilled Los Angeles commercial litigation attorney who can help represent your company’s best interests.

Similarities and Differences with Commercial Litigation

There are many similarities between commercial litigation and civil litigation matters.

The process of commercial litigation progresses through relatively the same stages, including:

  • Retaining counsel;
  • Completion of a factual investigation;
  • Preparing motions;
  • Taking the case to trial either by jury or in front of a judge;
  • Filing any necessary post-trial motions; and/or
  • Appeals hearings.

Where commercial litigation differs is primarily the involvement of businesses as parties rather than individuals. Commercial litigation cases tend to be more complex, both in their factual background and legal issues.

It’s not uncommon to have a commercial litigation case filed in federal court instead of a state court. It could also be a multi-district or class-action suit.

Civil cases typically resolve sooner than commercial litigation matters. It’s not unheard of to have a commercial litigation case take years to resolve in the courts.

Because it takes longer, the cost to try it can be more expensive as well. Discovery, especially e-discovery, and the fees paid to forensic experts can add up quickly.

Types of Litigation

There are a number of different types of commercial litigation. Examples of types of commercial litigation can include, but are not limited to:

  • Antitrust Litigation: Antitrust litigation involves allegations that a business’s practices are not in compliance with competition regulations.
  • Breach of Contract: A breach of contract is when one business doesn’t uphold a portion or all of a contract with another company.
  • Intellectual Property Litigation: IP litigation involves allegations of copyright, trademark, or patent infringements.
  • Consumer Class Action Lawsuits: This type of litigation involves a group of consumers who file a lawsuit collectively over causes of action like defective products, privacy violations, product mislabeling, fraud, etc.
  • Regulator Run-Ins: Any business who doesn’t comply with industry regulations will face potential civil and criminal prosecutions. This is sometimes referred to by its industry, like environmental litigation.
  • Tortious Interference: Business torts can be for negligent wrongdoing or intentional wrongdoing involving a business relationship. A common example is non-compete clauses. When an employee has a non-compete clause and violates it by working with another business who is aware of the clause, it can be tortious interference.
  • Corporate and Partnership Disputes: Businesses can face disputes within the corporation, partnership, or LLC. Challenges to mergers and acquisitions also fall under the heading here.
  • Uniform Commercial Code (UCC): The UCC is the code that governs commercial transactions. Some of these include leases, investment securities, sales, fund transfers, etc. Article 2 governs the contracts for the sale of goods.
  • RICO: Rico stands for the Racketeer Influenced and Corrupt Organizations Act (18 U.S.C. §§1961-68) and was passed in 1970 to help fight organized crime. Today, it’s often used against businesses under four different liability sections that make it unlawful for someone to manipulate an enterprise for the purpose of participating in, benefiting from, or concealing racketeering activity.

Use of Alternative Dispute Resolution

Alternative dispute resolution methods are commonly used in commercial litigation cases. These include mediation and arbitration. Some commercial contracts specifically have alternative dispute resolution clauses built into them.

Arbitration is becoming a popular alternative to traditional litigation for a number of reasons. Some of these include:

  • It is less expensive than traditional commercial litigation. Until there is a method to control the high costs of commercial litigation, alternative dispute resolution options will continue to gain momentum.
  • It can offer more control over where disputes can be resolved. This protects a corporation from being subjected to remote jurisdictions where they have no ties or any control and do not believe that justice could be served.
  • Arbitration courts are more private, which means the press cannot be involved. Arbitration can help shield a company from public scrutiny and ensure their reputation stays intact.
  • Another benefit of arbitration is the ability to control who can try a case because they have greater control over the decision makers. Juries may not always understand and appreciate how complex a business dispute can be.

However, it’s important to point out that arbitration has become more complex.

It can involve extensive discovery and multiple motions. This means it’s not always the best choice for every case and should be reviewed on a case-by-case basis.

Retaining a Los Angeles Commercial Litigation Lawyer

If your business needs to file a lawsuit against another business or has been served with one, it’s important to retain a Los Angeles commercial litigation attorney. At Starpoint Law, we help businesses with all their commercial litigation needs. Contact our office today to schedule a consultation.

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