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Can you be protected with a litigation shelter?

As a business owner, litigation should be the bane of your existence...if it hasn't been already. No one likes dealing with the proverbial "nuisance" lawsuit, which is essentially a complaint rooted in baseless (yet legally viable) claims with an exorbitant demand, which is likely to be settled for a fraction of the claim's purported value so that it will go away quickly.

These types of claims are akin to a debt collector purchasing a disputable debt for pennies on the dollar, then bringing a lawsuit to collect the full amount, while hoping for a quick settlement that will net a huge profit. 

While it may appear like extortion, this unfortunately happens all the time. And in today's litigious legal climate, it does not appear to be slowing down anytime soon; especially with the economy doing better. With that said, what can a business do to avoid being thrust into these scenarios?

The easy answer is to maintain solid relationships with your clients and suppliers. But even that is easier said than done. However, making sure that you have a litigation budget can be key to protecting oneself. This "litigation shelter" account is helpful in withstanding frivolous demands and being able to pay competent legal counsel on how to mitigate damages once a complaint is filed. The other benefit is that it may be written off as a taxable expense, which could ultimately help your bottom line.

If you have questions about whether you should have a litigation shelter or how much should be in it at a given time, an experienced attorney can help. 

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Burkhalter Kessler Clement & George LLP
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