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Business Law and the Legal Environment for a New Century
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Quote of the Day
Facts are ventriloquists’ dummies.
Sitting on a wise man’s knee they may
be made to utter words of wisdom;
elsewhere, they say nothing, or talk
nonsense or indulge in sheer diabolism.”
Aldus Huxley, British Author
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Business Law and the Legal Environment for a New Century
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There is only one good kind
of legal dispute -The one that is prevented!
“You have a chance to go
broke twice in your life; once
when you lose a lawsuit, the
other time, when you win.”
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Business Law and the Legal Environment for a New Century
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Litigation
vs.
Alternative Dispute Resolution

Litigation refers to lawsuits; the process of
filing claims in court, and ultimately going to
trial.

Alternative Dispute Resolution is any other
formal or informal process for settling disputes
without going to trial.
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Business Law and the Legal Environment for a New Century
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Alternative Dispute Resolution
 Negotiation
(most common forms)
• Parties make offers and counter-offers for settlements.
• May be face-to-face or through lawyers.
 Mediation
• Neutral person (mediator) attempts to get parties to
reach a voluntary settlement.
• Mediation may be ordered by a judge.
• Mediator does not render a decision.
 Arbitration
• Neutral person (arbitrator) is involved.
• Arbitrator does render a binding decision.
• Arbitration may be mandatory, if chosen in advance as
the method for dispute resolution.
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Business Law and the Legal Environment for a New Century
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Alternative Dispute Resolution
 Mini-trial
(less common forms)
• Parties stage a short trial to a panel of three “judges.”
• Two of the “judges” are executives of the disputing
corporations; the third is a neutral party.
• Lawyers present shortened cases; “judges” discuss
settlement.
 Summary Jury Trial
• Initiated and supervised by a court.
• Each side summarizes to a mock jury what witnesses
would say if called before a real jury.
• Jury deliberates and tries to reach consensus, but may
vote individually if necessary.
• Allows each side to see how a trial might turn out.
Click here to search the internet for Alternative Dispute Resolution
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Business Law and the Legal Environment for a New Century
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State Court System
Usually 7 Justices;
may refuse to hear a
case; final authority
State Supreme Court
(Highest Appeals Court)
Three judges;
never a jury
Lower Appeals Courts
Click on any box below for a definition of the jurisdiction of that trial court.
General
Civil
Division
General
Criminal
Division
Trial Courts of
General Jurisdiction
One judge; may
have jury
Small
Claims
Division
Juvenile
Division
Municipal
Division
Land
Division
Probate
Division
Domestic
Relations
Division
Trial Courts of Limited (or Specific) Jurisdiction
One judge; may have jury
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Federal Courts -Two kinds of civil lawsuits permitted
 Federal Question Cases
• A claim based on the United States Constitution, a
federal statute, or a federal treaty
 Diversity Cases
• When the plaintiff and defendant are citizens of two
different states, AND
• the amount in dispute is greater than $50,000
Click for an internet intro to past or present Supreme Court Justices
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The Federal Court System
*
United States
Supreme Court
Click here to see a
map of the 12
Circuits of the U.S.
Courts of Appeals.
Three judges hear each
case, brought up from
the District Courts.
Nine Justices; appointed for
life; may refuse to hear a
case; final authority
(Highest Appeals Court)
U.S. Courts of
Appeals (12
Circuits)
Lower
Appeals
Courts
U.S. Court of
Appeals for the
Federal Circuit
Hears appeals
from specialized
trial courts.
Click on any box below for a definition of the jurisdiction of that trial court.
U.S.
District
Courts
Primary
Trial
Court
U.S.
Bankruptcy
Courts
U.S. Court of
International
Trade
U.S. Tax
Courts
Trial Courts of
Limited (Specific)
Jurisdiction
Various
Federal
Agencies
U.S. Claims
Court
U.S. Patent &
Trademark
Office
Trial Courts of Limited
(Specific) Jurisdiction
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Steps in Beginning Litigation
 Pleadings: Papers that begin a lawsuit
1. Complaint -- Short, plain statement of the
allegations and the legal claims.
This is “served” or delivered with a summons.
2. Answer -- A brief reply to the allegations.
3. Counter-Claim -- Sometimes the accused
party will initiate a second
suit in response to the first.
4. Reply -- A brief reply to the counter-claim.
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Possible Variations on Pleadings
 Counter-claim
• If the accused party thinks the accusing party has
contributed to the problem or has wronged them, they
may file a second suit, in reverse of the first.
 Class Actions
• If the plaintiff has evidence that the wrong in question
has affected a large number of unrelated persons, the
suit may become a class-action suit, with the plaintiff
representing an entire class of plaintiffs.
 Judgment on the Pleadings
• Either party can ask the court for a judgment based on
the initial complaint and answer, but few cases are
dismissed at this point.
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Discovery -next step after pleadings
Discovery allows both sides to uncover evidence, encouraging
a settlement without trial or ensuring few surprises during a
trial.
 Interrogatories -- written questions that the other
party must answer, under oath
 Depositions --
interview (under oath) of other party
or potential witnesses; done by opposing lawyer
 Production of Evidence --
each side may
request to see the other side’s evidence
 Requests for Admission --
each side may
request that undisputed facts be admitted or denied, to
avoid wasting time on them
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Other Steps Before Trial
 Summary Judgment -- a ruling by the court
that no trial is necessary because there are no
essential facts in dispute; may be requested by
either side.
 Final Preparation
-- if the case is to proceed to
trial, both sides make a list of witnesses and
rehearse questions with their own witnesses.
Preparation is allowed, but telling the witnesses
how to answer is not legal or ethical.
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Beginning a Trial
 Jury Selection: Process called voir dire
If both sides agree, they may waive their right to a jury.
1. Questioning -- Each potential juror is questioned, to
uncover biases.
2. Challenges for Cause -- Each side can claim any
juror shows significant bias.
3. Peremptory Challenges -- Each lawyer can dismiss a
limited number of jurors
without stating a reason.
4. Jury Chosen -- 12 jurors and 2 alternates
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Procedural Rules for a Trial
 Burden of Proof
• The plaintiff must convince the jury that its version of
the case is correct.
• In a civil case, the proof needs to be by a
preponderance of evidence (meaning at least
slightly more likely to be true).
• In a criminal case, the proof required is higher; it
must be beyond a reasonable doubt.
 Rules of Evidence
• Lawyers are allowed to ask only questions that are
relevant to the case.
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The Plaintiff’s Case
 First, Opening Arguments
• This is a brief summary, given by each side, of the
facts they hope to demonstrate.
 Plaintiff Calls Witnesses
• Questions to own witnesses is direct examination.
• Lawyer only asks questions with helpful answers.
 Defendant Questions Witnesses
• Questions to opposing witnesses is cross
examination.
• Again, lawyer asks questions with helpful answers.
 Defendant Moves for Directed Verdict
• This is asking the judge to decide that the plaintiff has
no case worth proceeding with.
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The Defendant’s Case
 Opening Arguments
• Defendant’s opening arguments were presented
earlier, before the plaintiff presented its case.
 Defendant Calls Witnesses
• Questions to own witnesses is direct examination.
• Lawyer only asks questions with helpful answers.
 Plaintiff Questions Witnesses
• Questions to opposing witnesses is cross
examination.
• Again, lawyer asks questions with helpful answers.
 Closing Arguments
• Brief summary, by both sides, urging the jury to
believe their side of the case.
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After Both Sides Rest
(Finish)
 Jury Instructions
• The judge instructs the jury to evaluate the case
solely on the facts of the evidence presented.
• If the case is influenced by a certain legal
presumption, the judge will summarize that for the
jury.
 Deliberation and Verdict
• The jury discusses the case for as long as needed
(anywhere from less than an hour to several weeks).
• Sometimes the jury must be unanimous; other times
only a majority (at least 7) or a 10-2 vote is required.
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The Trial is Over… or is it?
 Motions after the Verdict
• The loser might request a judgment n.o.v., asking the
judge to overturn the verdict on a legal technicality or
on a claim that the jury ignored the evidence.
• If the judgment n.o.v. is denied, the losing side may
request a new trial, on the same claims.
 Appeal
• The recourse for the loser is to file an appeal, a
request for a higher court to examine the facts.
• The appeals court may affirm the verdict, modify the
award, reverse and remand (send it back to trial) or
simply reverse (overturn) the lower court’s verdict.
 Settlement
• At any point, either side may offer to settle the case,
even between the verdict and the beginning of an
appeal.
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The process of litigation, with its
potential for errors or biases, may
influence the outcome of a dispute
as strongly as the law itself. That is
all the more reason to prevent
disputes if possible, or to use
alternative methods of dispute
resolution.
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Business Law and the Legal Environment for a New Century
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