How California Court Budget Cuts Could Affect Your Business

California is in the third year of cuts, and the state’s courts are taking a $660 million hit: $350 million in the latest budget cuts and another $310 million originally earmarked for court construction that is being diverted to the State’s General Fund. Complex litigation departments which handle business trials will be closed or cut back, and many cases will marinate as statutory time limits approach 1.

Closed courts and delayed hearings mean a dispute could sit unresolved or even unheard for over 5 years, all the while your business is incurring attorney fees and experiencing business disruption. The current economic climate now forces businesses to evaluate if the stakes are worth the higher legal expense for litigation, possibly take a loss of the stakes in dispute, or investigate new avenues of dispute resolution. What to do when a dispute arrives or faces long process delays:

  1. Evaluate the stakes involved.
  2. Estimate the costs to your organization to resolve in litigation, arbitration, or mediation, including business interruption time. How much does litigation cost?
  3. If the answer to 2. approaches or exceeds 1., contact Just Resolve for a swift, principled, fixed fee dispute resolution alternative that works for both sides.
  4. Pursue whatever dispute resolution method is both rational in that instance and acceptable to all parties.
  5. Capitalize on the opportunity to evaluate your contract management business practices. Could the dispute have been prevented with proactive contract commitment management? Could the dispute have been identified earlier, before it escalated? Is there an alternative resolution process that should be part of all contracts? Does the business have clear steps to take when a dispute does arise?

Developing contract and dispute practices that are sustainable over the long term and not dependent on state budgets, limitations of small claims courts, and adversarial resolution processes, can be the difference between a profitable growing business and one that struggles to maintain desired cash flow, even if business is growing.


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