At Holden Litigation
We Play To Win
At Holden Litigation
We Play To Win
At Holden Litigation
We Play To Win

How can settling a lawsuit damage a company’s reputation?

On Behalf of | Apr 12, 2024 | Energy Litigation, Environmental Litigation

Companies producing and distributing energy derived from renewable and nonrenewable resources understand the environmental impact of certain processes. They invest hundreds and thousands of dollars in innovative and environmentally friendly methods to ensure compliance with all relevant regulations and prevent legal problems. Unfortunately, the larger your company is, the more exposed you are to legal threats and business-related disputes.

Settling a dispute does not inherently destroy a company’s reputation. In fact, settlements can allow a company to avoid negative publicity from lengthy court battles. They enable parties to voluntarily resolve their differences privately and can sometimes result in a more amicable outcome. However, some people may misinterpret your intention to resolve matters peacefully as an attempt to conceal wrongdoing or illegal activities.

Suppose an energy company settles a case that involves serious allegations, such as environmental damage, safety violations or unfair business practices. In that case, the public may misconstrue the settlement as an admission of guilt, even if the settlement agreement explicitly states that the company did not do anything wrong. This can be particularly true if the settlement involves a large financial payment.

Why and when litigation is the best course of action

Litigation may be the optimal option for an energy company when it needs to assert its rights or when a settlement is not possible due to the nature of the dispute. Going to court can also be a strategic move, especially if the company is confident in its legal position and believes that the outcome of a trial will be favorable. Litigation is usually the best course of action under the following circumstances:

  • When other parties are unwilling to engage in fair settlement negotiations
  • When the outcome of the case could have significant implications for industry standards or regulations
  • If the dispute involves a matter of public interest or concern, and the company wants to clear its name or stand by its principles
  • When the company needs to protect its intellectual property or other proprietary information
  • If the potential damages from losing a settlement would be greater than the cost of litigation
  • When the company needs to set a precedent to influence future legal outcomes in the company’s favor

Litigation can also deter future claims by establishing a solid stance against baseless or frivolous lawsuits. It lets people know you stand by your company’s practices and policies, and you are not afraid to fight for them.