What do litigation and disputes mean?

In common parlance, the words "litigation" and "dispute" are sometimes used interchangeably.

However, although they are similar, these two terms cover different legal concepts.

In this article, you will discover the real difference between a dispute and a litigation, as well as tips for companies to properly manage these disagreements.

Litigation: definition

In its official legal definition, a dispute is a disagreement between two or more persons concerning the exercise of a right. The definition of a dispute thus encompasses different types of disagreements, which may arise from a contract, although this is not systematic.

There are different categories of disputes, depending on the status of the parties:

The civil dispute, which opposes two or more individuals
The dispute between one or more individuals and a legal person, i.e. a company or an association.

In their daily lives, many people are confronted with legal disputes in areas such as buying and selling, services, family, real estate, work or banking.

What is litigation?

Litigation is not fundamentally different from litigation. The two notions are indeed linked, since we speak of litigation to designate a legal action aimed at having a dispute decided by a judge.

Based on this definition, not all disputes result in litigation, but litigation is always the result of a dispute. To understand this distinction, it is important to understand that a dispute can be settled in two ways:

Through an amicable procedure, without resorting to the courts
Or, if the amicable procedure fails, by contentious procedure

Within a company, the litigation department is the department in charge of managing disputes between the company and its customers, suppliers and other stakeholders. Composed of lawyers and legal experts, this department responds to the company's major challenges.

What are the major issues for companies regarding litigation and disputes?

Litigation management is at the heart of several key issues for companies. Indeed, a litigation badly managed by an organization can be very costly, both financially and in terms of image.

Hence the key role of the legal department, and the processes put in place internally to prevent and manage disagreements.

Customer disputes are particularly critical. They may concern the quality of the product, contractual specifications (delivery times, product or service characteristics), or invoicing (late payment, error in the drafting of the invoice, etc.).

As they have a direct impact on customer satisfaction, these disputes must be handled quickly and accurately. Indeed, the reputation of the company and its turnover are at stake.

A good management of litigations and disputes allows to preserve the company's relations with all the stakeholders (customers, suppliers, providers).

These relationships are critical, especially when there are many stakeholders. Even the smallest disagreement that is not managed properly can lead to delays, financial losses and reputational impact.

Risks around litigation and disputes have always existed; but their importance has increased over the last decade, with the use of digital technology.

Indeed, nowadays, it only takes a few negative comments on a product sheet or a social network to jeopardize the activity of a company.

Hence the importance of reactivity in managing disputes, particularly in the context of customer satisfaction.

👀 Also read: 7 reasons to adopt a SaaS-based CLM software 🐶

How to manage your litigation files?

Within a company, the management of disputes and litigation requires a very rigorous organization. Indeed, the slightest error in these matters can have significant financial or image repercussions.

Optimal management of disagreements is based on several elements:

Risk anticipation, based on a comprehensive view of stakeholders, as well as a precise analysis of legal and financial risks
Reactivity and efficiency, based on an optimal organization in which files are centralized and easily accessible
Traceability of files, so as not to miss any update on a dispute, to facilitate collaboration, and to better manage all the files in progress

Finally, in order to control risks and progressively reduce disagreements, it is important to have an overview of them. This overview is based on the production and analysis of relevant statistics.

How can a solution like DiliTrust help in the management of disputes?

To facilitate the management of disputes and reduce the risk of error, companies must equip themselves with secure, high-performance and easy-to-use tools. Ideally, they should have a single platform that centralizes all disputes and litigation to facilitate collaboration, information retrieval and case follow-up.

This is what the DiliTrust Governance Suite's litigation and dispute management module offers.

This SaaS-based software centralizes all disputes on a single, fully secure tool, making it easier to find information and work as a team. Thanks to a system of alerts, users do not miss any updates to a file, which allows them to be more reactive and reduce the risk of error. DiliTrust also allows you to produce customized dashboards, to have an overview of the disagreements and their financial impact.

Such a solution makes it possible to gain in efficiency and precision in the management of disputes. By processing cases more quickly, with reduced risk, the company ensures better control of legal and financial risks. It also contributes to the improvement of relations with customers and suppliers.

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